Question 1

The consumer price index measures the cost of the consumption of a family of four living below the poverty line.

Accepted Answer

A) True 
 B)False

Question 2

The Arcadia Entertainment Co. produced 20,000 DVDs of the movie Thor in 2011. Only 4,000 copies remained unsold at the end of 2011. As a result:

Accepted Answer

A)  only 16,000 DVDs should be included in GDP in 2011 as consumption expenditure.
B)  all 20,000 DVDs will be included in GDP in 2011, 16,000 as consumption expenditure and 4,000 as investment expenditure
C)  only 16,000 DVDs are included in GDP of 2011; the remaining 4,000 are counted in GDP of 2012.
D)  all 20,000 DVDs are initially counted in 2011 GDP as consumption expenditure, but they will be subtracted and added to 2012 GDP as the merchandise gets sold.

Question 3

Use the following to answer questions :
Table: Lemonade and Cookies
 
-(Table: Lemonade and Cookies)  Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. Nominal GDP in 2013 was:

Accepted Answer

A)  $400.
B)  $420.
C)  $445.
D)  $820.

Question 4

In 2011, consumption spending is $7,000, government purchases of goods and services is $2,000, and investment spending is $1,500. If GDP for 2011 is $10,300, exports are _____ and imports are _____.

Accepted Answer

A)  $400; $200
B)  $100; $200
C)  $600; $800
D)  $500; $300

Question 5

The total value of all final goods and services produced in the economy in a given year, calculated with the prices current in the year in which the output is produced, is real GDP.

Accepted Answer

A) True 
 B)False

Question 6

Use the following to answer questions :
Scenario: Good A and Good B
 
-(Scenario: Good A and Good B)  Look at the Scenario Good A and Good B. With 2009 as the base year, real GDP in 2009 was _____ GDP in _____.

Accepted Answer

A)  equal to real; 2010
B)  equal to nominal; 2009
C)  greater than real; 2010
D)  greater than nominal; 2011

Question 7

Use the following to answer questions :
Table: Price and Output Data 
-(Table: Price and Output Data)  Look at the table Price and Output Data. Between years 4 and 5, nominal GDP increased by:

Accepted Answer

A)  33%.
B)  75%.
C)  50%.
D)  13%.

Question 8

The base period for the consumer price index is 1982-1984.

Accepted Answer

A) True 
 B)False

Question 9

Use the following to answer questions :
Table: Pizza Economy III
 
-(Table: Pizza Economy III)  Look at the table Pizza Economy III. Considering 2010 as the base year, given that total population was 1,140 in 2010 and 1,300 in 2011, real GDP per capita in 2010 was:

Accepted Answer

A)  $80.
B)  $53.
C)  $60.
D)  $100.

Question 10

If the cost of the market basket in the base year is $2,000 and in 2014 it is $2,100, the price index for 2014 is:

Accepted Answer

A)  2,100.
B)  105.
C)  100.
D)  95.

Question 11

If real GDP falls while nominal GDP rises, then prices on average have:

Accepted Answer

A)  risen.
B)  fallen.
C)  stayed the same.
D)  Real GDP cannot rise when nominal GDP falls.

Question 12

Which of the following is FALSE? Gross domestic product:

Accepted Answer

A)  is aggregate output.
B)  is the total production of final goods and services.
C)  grows during an expansion.
D)  is the total production of all final and intermediate goods and services.

Question 13

_____ is most widely used to measure inflation in the United States.

Accepted Answer

A)  producer price index
B)  consumer price index
C)  GDP deflator
D)  national income account

Question 14

Spending on inputs is _____ of GDP, and investment spending is _____ of GDP.

Accepted Answer

A)  part; part
B)  not a part; part
C)  part; not a part
D)  not a part; not a part

Question 15

Use the following to answer questions:
Figure: Expanded Circular-Flow Model 
-(Figure: Expanded Circular-Flow Model)  Look at the figure Expanded Circular-Flow Model. How does the government finance its spending?

Accepted Answer

A)  taxes of $150 plus borrowing of $70
B)  foreign borrowing and sales of stock of $110
C)  investment spending of $120
D)  net exports of $80

Question 16

Use the following to answer questions :
Table: Price and Output Data 
-(Table: Price and Output Data)  Look at the table Price and Output Data. Nominal GDP in year 5 is:

Accepted Answer

A)  $1.29.
B)  $16.
C)  $45.
D)  $63.

Question 17

Use the following to answer questions:
Table: Real and Nominal Output 
-(Table: Real and Nominal Output)  Look at the table Real and Nominal Output. Nominal GDP in year 4 is equal to:

Accepted Answer

A)  $40.
B)  $60.
C)  $100.
D)  $280.

Question 18

The underlying principle of the circular-flow diagram is that the flows of money into each sector or market in the economy are equal to those coming out of the sector or market.

Accepted Answer

A) True 
 B)False

Question 19

Use the following to answer questions :
Table: Price and Output Data 
-(Table: Price and Output Data)  Look at the table Price and Output Data. The value of year 4's output in real dollars is:

Accepted Answer

A)  $5.20.
B)  $6.
C)  $30.
D)  $36.

Question 20

Use the following to answer questions :
Table: The Consumer Price Index 
-(Table: The Consumer Price Index)  Look at the table The Consumer Price Index. The approximate rate of inflation in year 2 is:

Accepted Answer

A)  10%.
B)  19%.
C)  20%.
D)  25%.

Exam 7: Gdp and Cpi: Tracking the Macroeconomy

_____ is most widely used to measure inflation in the United States.

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The base period for the consumer price index is 1982-1984.

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Use the following to answer questions : Table: The Consumer Price Index -(Table: The Consumer Price Index) Look at the table The Consumer Price Index. The approximate rate of inflation in year 2 is:

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The total value of all final goods and services produced in the economy in a given year, calculated with the prices current in the year in which the output is produced, is real GDP.

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Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. Between years 4 and 5, nominal GDP increased by:

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If real GDP falls while nominal GDP rises, then prices on average have:

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Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. Nominal GDP in year 5 is:

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Use the following to answer questions : Table: Lemonade and Cookies -(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. Nominal GDP in 2013 was:

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Which of the following is FALSE? Gross domestic product:

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The Arcadia Entertainment Co. produced 20,000 DVDs of the movie Thor in 2011. Only 4,000 copies remained unsold at the end of 2011. As a result:

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Use the following to answer questions : Scenario: Good A and Good B -(Scenario: Good A and Good B) Look at the Scenario Good A and Good B. With 2009 as the base year, real GDP in 2009 was _____ GDP in _____.

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The underlying principle of the circular-flow diagram is that the flows of money into each sector or market in the economy are equal to those coming out of the sector or market.

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Use the following to answer questions : Table: Price and Output Data -(Table: Price and Output Data) Look at the table Price and Output Data. The value of year 4's output in real dollars is:

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The consumer price index measures the cost of the consumption of a family of four living below the poverty line.

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Use the following to answer questions: Table: Real and Nominal Output -(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Nominal GDP in year 4 is equal to:

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Spending on inputs is _____ of GDP, and investment spending is _____ of GDP.

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If the cost of the market basket in the base year is $2,000 and in 2014 it is $2,100, the price index for 2014 is:

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In 2011, consumption spending is $7,000, government purchases of goods and services is $2,000, and investment spending is $1,500. If GDP for 2011 is $10,300, exports are _____ and imports are _____.

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Use the following to answer questions: Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. How does the government finance its spending?

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Use the following to answer questions : Table: Pizza Economy III -(Table: Pizza Economy III) Look at the table Pizza Economy III. Considering 2010 as the base year, given that total population was 1,140 in 2010 and 1,300 in 2011, real GDP per capita in 2010 was:

Correct AnswerverifiedShow Answer

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Use the following to answer questions : Scenario: Good A and Good B -(Scenario: Good A and Good B) Look at the Scenario Good A and Good B. With 2009 as the base year, real GDP in 2009 was _ GDP in _.

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Spending on inputs is _ of GDP, and investment spending is _ of GDP.

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In 2011, consumption spending is $7,000, government purchases of goods and services is $2,000, and investment spending is $1,500. If GDP for 2011 is $10,300, exports are _ and imports are _.

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