Question 1

Depreciation refers to a decrease in the value of a durable good caused by:​

Accepted Answer

A)  an increase in the price level.
B)  changes in the interest rate.
C)  wear and tear over time.
D)  changes in tax laws.
E)  a decrease in its resale value.F) C) and E)
G) None of the above

Question 2

The GDP price index:​

Accepted Answer

A)  measures the average price of final goods and services produced in an economy.
B)  measures the quality of goods produced in an economy.
C)  is derived using the prices of only imported and exported goods and services.
D)  is derived using the implicit prices of goods and services produced by the government.
E)  measures the value of all intermediate goods and services sold in an economy.F) B) and D)
G) B) and C)

Question 3

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.​

Accepted Answer

A)  $0
B)  $15,000​
C)  $35,000​
D)  $38,000​
E)  $41,000​F) B) and D)
G) C) and D)

Question 4

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.​

Accepted Answer

A)  10
B)  equal to zero​
C)  20​
D)  greater than 100​
E)  negative​F) C) and D)
G) A) and E)

Question 5

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.​

Accepted Answer

A) True 
 B)False

Question 6

A fixed-weight price index uses a process that adjusts the weights continuously year by year.​

Accepted Answer

A) True 
 B)False

Question 7

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP) ?​

Accepted Answer

A)  The money spent on the purchase of stocks
B)  The money spent on the purchase of used furnitures​
C)  The money spent on the purchase of a used car​
D)  The money spent on the purchase of kitchen appliances​
E)  The money spent on the purchase of bonds issued by the government​F) All of the above
G) A) and E)

Question 8

Inventories help manufacturers cope with unexpected changes in the supply of their resources or in the demand for their products.​

Accepted Answer

A) True 
 B)False

Question 9

Net exports equals _____.​

Accepted Answer

A)  the value of exports minus the value of imports
B)  the value of imports minus the value of exports​
C)  the value of imports minus tariffs​
D)  the value of exports minus tariffs​
E)  the value of exports plus the value of imports minus depreciation​F) B) and D)
G) A) and E)

Question 10

If consumption = $5,000; investment = $800,government purchases = $700,exports = $30,imports = $60,and transfer payments = $340,then _____.​

Accepted Answer

A)  GDP = $7,400
B)  GDP = $7,740​
C)  GDP = $3,140​
D)  GDP = $6,470​
E)  GDP = $6,840​F) A) and E)
G) B) and E)

Question 11

Jimmy Earl,a farmer,sells $20 worth of peanuts to a factory that manufactures peanut butter,which sells it for $45.Which of the following is true?​

Accepted Answer

A)  Total value added is $65.
B)  The value of final sales is $65.
C)  The value of final sales is $25.
D)  Total value added is $25.
E)  Total value added is $45.F) C) and D)
G) B) and C)

Question 12

If the consumer price index (CPI) is 160 one year and 175 the next,the annual rate of inflation as measured by the CPI is approximately _____.​

Accepted Answer

A)  4.5 percent
B)  8.6 percent​
C)  9.4 percent​
D)  15 percent​
E)  175 percent​F) All of the above
G) C) and E)

Question 13

If a firm hires labor for $6,000,pays rent of $2,000,buys raw materials for $10,000 from another firm,earns profits of $800,and sells its output for $25,000,the value added by the firm is _____.​

Accepted Answer

A)  $6,200
B)  $9,000
C)  $15,000
D)  $18,000
E)  $18,800F) A) and B)
G) B) and C)

Question 14

Gross domestic product (GDP)is a good measure of social welfare since it includes the value of leisure time.​

Accepted Answer

A) True 
 B)False

Question 15

The gross domestic product (GDP) of an economy for a particular year is likely to increase if _____.​

Accepted Answer

A)  workers go on longer vacations during that year
B)  the length of an average work week decreases​
C)  homeowners hire lawn care services rather than maintaining the lawns themselves​
D)  people cook food at home instead of buying restaurant meals​
E)  the sale of illegal drugs increases​F) All of the above
G) A) and D)

Question 16

Which of the following is true about the consumer price index (CPI) and the GDP price index?​

Accepted Answer

A)  Both measures weigh prices by quantities consumed in some base year.
B)  Both yield identical numbers for price level changes for any two years.
C)  Both CPI and GDP price index underestimate changes in the price level in an economy.
D)  The CPI measures changes in relative prices of goods,while the GDP price index measures changes in the absolute price level of a fixed basket of goods and services.
E)  CPI includes products that are widely used,while GDP price index includes all goods and services.F) None of the above
G) C) and E)

Question 17

If the nominal gross domestic product (GDP) for the year 2000 was $6.2 trillion and the price index was 200,the real gross domestic product (GDP) for 2000 was _____.​

Accepted Answer

A)  $3.1 trillion
B)  $6.2 trillion​
C)  $12.4 trillion​
D)  $18.6 trillion​
E)  $24.3 trillion​F) B) and C)
G) C) and D)

Question 18

Which of the following is an example of a leakage from the circular flow of income and expenditure?​

Accepted Answer

A)  Government purchases of goods and services
B)  Taxes​
C)  Investment​
D)  Exports​
E)  Consumption expenditures​F) B) and D)
G) A) and D)

Question 19

Which of the following is included as government purchases in gross domestic product (GDP) ?​

Accepted Answer

A)  Social Security payments to elderly citizens
B)  Welfare benefits distributed to the poor​
C)  Outright grants from government to recipients​
D)  Payments to clerical workers hired by government​
E)  Unemployment compensation benefits​F) B) and C)
G) C) and E)

Question 20

Which of the following correctly illustrates the leakages-injections approach to GDP?​

Accepted Answer

A)  DI + (NT) = C + I + G + (X ‒ M) 
B)  S + C + NT = DI​
C)  S + C + (NT) = I + G + (X ‒ M) ​
D)  S + (NT) + M = I + G + X​
E)  S + (NT) = I + G + (X ‒ M) ​F) B) and D)
G) A) and B)

Exam 6: Tracking the Useconomy

Inventories help manufacturers cope with unexpected changes in the supply of their resources or in the demand for their products.​

Correct AnswerverifiedShow Answer

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP) ?​

Correct AnswerverifiedShow Answer

Which of the following correctly illustrates the leakages-injections approach to GDP?​

Correct AnswerverifiedShow Answer

Which of the following is an example of a leakage from the circular flow of income and expenditure?​

Correct AnswerverifiedShow Answer

If the consumer price index (CPI) is 160 one year and 175 the next,the annual rate of inflation as measured by the CPI is approximately _____.​

Correct AnswerverifiedShow Answer

A fixed-weight price index uses a process that adjusts the weights continuously year by year.​

Correct AnswerverifiedShow Answer

Jimmy Earl,a farmer,sells $20 worth of peanuts to a factory that manufactures peanut butter,which sells it for $45.Which of the following is true?​

Correct AnswerverifiedShow Answer

Depreciation refers to a decrease in the value of a durable good caused by:​

Correct AnswerverifiedShow Answer

Gross domestic product (GDP)is a good measure of social welfare since it includes the value of leisure time.​

Correct AnswerverifiedShow Answer

Net exports equals _____.​

Correct AnswerverifiedShow Answer

If the nominal gross domestic product (GDP) for the year 2000 was $6.2 trillion and the price index was 200,the real gross domestic product (GDP) for 2000 was _____.​

Correct AnswerverifiedShow Answer

If consumption = $5,000; investment = $800,government purchases = $700,exports = $30,imports = $60,and transfer payments = $340,then _____.​

Correct AnswerverifiedShow Answer

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.​

Correct AnswerverifiedShow Answer

Which of the following is included as government purchases in gross domestic product (GDP) ?​

Correct AnswerverifiedShow Answer

Which of the following is true about the consumer price index (CPI) and the GDP price index?​

Correct AnswerverifiedShow Answer

The gross domestic product (GDP) of an economy for a particular year is likely to increase if _____.​

Correct AnswerverifiedShow Answer

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.​

Correct AnswerverifiedShow Answer

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.​

Correct AnswerverifiedShow Answer

The GDP price index:​

Correct AnswerverifiedShow Answer

If a firm hires labor for $6,000,pays rent of $2,000,buys raw materials for $10,000 from another firm,earns profits of $800,and sells its output for $25,000,the value added by the firm is _____.​

Correct AnswerverifiedShow Answer

Inventories help manufacturers cope with unexpected changes in the supply of their resources or in the demand for their products.

Correct Answer
verified

Which of the following expenditures is included in the consumption component of the gross domestic product (GDP) ?

Correct Answer
verified

Which of the following correctly illustrates the leakages-injections approach to GDP?

Correct Answer
verified

Which of the following is an example of a leakage from the circular flow of income and expenditure?

Correct Answer
verified

If the consumer price index (CPI) is 160 one year and 175 the next,the annual rate of inflation as measured by the CPI is approximately _____.

Correct Answer
verified

A fixed-weight price index uses a process that adjusts the weights continuously year by year.

Correct Answer
verified

Jimmy Earl,a farmer,sells $20 worth of peanuts to a factory that manufactures peanut butter,which sells it for $45.Which of the following is true?

Correct Answer
verified

Depreciation refers to a decrease in the value of a durable good caused by:

Correct Answer
verified

Gross domestic product (GDP)is a good measure of social welfare since it includes the value of leisure time.

Correct Answer
verified

Net exports equals _____.

Correct Answer
verified

If the nominal gross domestic product (GDP) for the year 2000 was $6.2 trillion and the price index was 200,the real gross domestic product (GDP) for 2000 was _____.

Correct Answer
verified

If consumption = $5,000; investment = $800,government purchases = $700,exports = $30,imports = $60,and transfer payments = $340,then _____.

Correct Answer
verified

We can conclude that there has been inflation since the base year if the GDP price index in the current year is _____.

Correct Answer
verified

Which of the following is included as government purchases in gross domestic product (GDP) ?

Correct Answer
verified

Which of the following is true about the consumer price index (CPI) and the GDP price index?

Correct Answer
verified

The gross domestic product (GDP) of an economy for a particular year is likely to increase if _____.

Correct Answer
verified

If the nominal gross domestic product (GDP)is $6 trillion for a particular year,and the real GDP is $3 trillion,then the GDP price index is 167.

Correct Answer
verified

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

Correct Answer
verified

The GDP price index:

Correct Answer
verified

If a firm hires labor for $6,000,pays rent of $2,000,buys raw materials for $10,000 from another firm,earns profits of $800,and sells its output for $25,000,the value added by the firm is _____.

Correct Answer
verified