Question 1

The difference between nominal GDP and real GDP is:

Accepted Answer

A)   real output growth.
B)   the price level.
C)   nominal output growth.
D)   long-run trend GDP.
E)   average output growth.

Question 2

Company X sells paper to company Y for $100,000. Company Y uses the paper to make textbooks, selling them to consumers for $500,000. The total contribution to GDP is:

Accepted Answer

A)   $500,000.
B)   $400,000.
C)   $600,000.
D)   $550,000.
E)   $450,000.

Question 3

Real GDP is GDP adjusted for changes in:

Accepted Answer

A)   overall employment levels.
B)   overall price levels.
C)   overall output levels.
D)   the level of the interest rate.
E)   the level of unemployment.

Question 4

If nominal GDP is increasing, which of the following is true?

Accepted Answer

A)   More final goods and services are being produced.
B)   Prices on average are rising at a slower rate than the decline in the quantity of final goods and services produced.
C)   Less is being produced, and prices on average are falling.
D)   Production of final goods and services is increasing at a faster rate than prices are falling.
E)   Prices and the amount of final goods and services produced on average are constant.

Question 5

Nominal GDP increased from $15.44 trillion to $15.75 trillion, and the price level increased from 116.5 to 122.3. Which of the following is true?

Accepted Answer

A)   Output grew faster than the price level.
B)   Output grew slower than the price level.
C)   Real GDP grew faster than nominal GDP.
D)   Output grew at the same rate as the price level.
E)   Real GDP grew at the same rate as nominal GDP.

Question 6

Nominal GDP increases if:

Accepted Answer

A)   current prices increase, while current quantities decrease.
B)   current quantities increase, while current prices decrease.
C)   current prices or current quantities increase.
D)   real GDP increases.
E)   real GDP decreases.

Question 7

If nominal GDP changed by 6% and the price level changed by 2%, then real GDP changed by:

Accepted Answer

A)   4%.
B)   3%.
C)   8%.
D)   12%.
E)   6%.

Question 8

Consider the following data to answer the next  questions: 
-Although countries C and D have the same level of GDP, country C has a level of per capita GDP that is ________ times that of country D.

Accepted Answer

A)   two
B)   three
C)   four
D)   five
E)   ten

Question 9

A shortcoming of nominal GDP is that:

Accepted Answer

A)   an increase in nominal GDP can be caused by changes in either price or quantity.
B)   it does not measure changes in employment.
C)   it does not measure changes in price.
D)   it does not include net exports.
E)   it does not include the value obtained through purchases of stocks and bonds.

Question 10

Consider the following data to answer the next  questions: 
-If these are the only five countries in the world, then country B produces _______ of world GDP.

Accepted Answer

A)   50%
B)   25%
C)   20%
D)   62.5%
E)   30%

Question 11

Consumption is approximately ________ of GDP.

Accepted Answer

A)   50%
B)   90%
C)   70%
D)   80%
E)   40%

Question 12

Consider the following data to answer the next  questions: 
-Which two countries have the same average living standard?

Accepted Answer

A)   B and C
B)   C and D
C)   A and B
D)   C and E
E)   A and E

Question 13

To evaluate the change in average living standards over time, it is best to use:

Accepted Answer

A)   the inflation rate.
B)   GDP.
C)   GDP per capita.
D)   real GDP per capita.
E)   real GDP.

Question 14

A company sells 100 boxes of chocolate, yet it only produced 90 boxes of chocolate during the year. Which of the following is true?

Accepted Answer

A)   It is impossible to sell more than is produced.
B)   Inventory investment must be negative.
C)   The price of the chocolate must have gone up.
D)   The firm must have acquired the extra 10 boxes from another company.
E)   The firm sold the chocolate but must have given 10 people an IOU.

Question 15

Does the value of cleaning your house count toward the value of GDP?

Accepted Answer

A)   Yes, this value counts in GDP.
B)   No, cleaning your house is not a market activity.
C)   Yes, if you pay a person or company to clean your house.
D)   No, because people who clean houses for a living do not pay taxes.
E)   No, this is a leisure activity.

Question 16

The investment component of GDP can be broken down into three main categories. Identify these categories and briefly explain what is included in each category.

Accepted Answer

The three categories are business fixed ...

Question 17

The best measure of the average living standards of people in the country is:

Accepted Answer

A)   the dollar value of final goods and services produced.
B)   the dollar value of final goods and services produced per person.
C)   the amount of final goods and services produced.
D)   the amount of final goods and services produced per person.
E)   the average price of final goods and services produced.

Question 18

GDP is most often measured by:

Accepted Answer

A)   the year.
B)   the month.
C)   the week.
D)   the day.
E)   the quarter.

Question 19

Consider the following figure to answer the next  questions: 
-During which year was average income climbing the most rapidly?

Accepted Answer

A)   2000
B)   2001
C)   2004
D)   2005
E)   2008

Question 20

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next  questions: Assume that the base year is 2012. 
-What was the real GDP in 2013?

Accepted Answer

A)   $5,400
B)   $6,300
C)   $6,450
D)   $1,700
E)   $13,600

Exam 6: Introduction to Macroeconomics and Gross Domestic Product

GDP is most often measured by:

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Consumption is approximately ________ of GDP.

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Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the next questions: Assume that the base year is 2012. -What was the real GDP in 2013?

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The difference between nominal GDP and real GDP is:

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Consider the following data to answer the next questions: -If these are the only five countries in the world, then country B produces _______ of world GDP.

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A company sells 100 boxes of chocolate, yet it only produced 90 boxes of chocolate during the year. Which of the following is true?

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The investment component of GDP can be broken down into three main categories. Identify these categories and briefly explain what is included in each category.

Correct AnswerverifiedThe three categories are business fixed ...View AnswerShow Answer

Company X sells paper to company Y for $100,000. Company Y uses the paper to make textbooks, selling them to consumers for $500,000. The total contribution to GDP is:

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Consider the following figure to answer the next questions: -During which year was average income climbing the most rapidly?

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If nominal GDP is increasing, which of the following is true?

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To evaluate the change in average living standards over time, it is best to use:

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Real GDP is GDP adjusted for changes in:

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Consider the following data to answer the next questions: -Which two countries have the same average living standard?

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If nominal GDP changed by 6% and the price level changed by 2%, then real GDP changed by:

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Nominal GDP increased from $15.44 trillion to $15.75 trillion, and the price level increased from 116.5 to 122.3. Which of the following is true?

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Consider the following data to answer the next questions: -Although countries C and D have the same level of GDP, country C has a level of per capita GDP that is ________ times that of country D.

Correct AnswerverifiedShow Answer

The best measure of the average living standards of people in the country is:

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Nominal GDP increases if:

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A shortcoming of nominal GDP is that:

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Does the value of cleaning your house count toward the value of GDP?

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The three categories are business fixed ...
View Answer

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