Question 1

A recession occurs when real GDP decreases for at least 6 months.

Accepted Answer

A) True 
 B)False

Question 2

The low point of economic activity during a business cycle is called the

Accepted Answer

A)   peak.
B)   pits.
C)   trough.
D)   recession.

Question 3

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexico's population was 104 million and GDP was $839 billion. Per GDP person by
Between 2006 and 2007 in Mexico.

Accepted Answer

A)   decreased; 5 percent
B)   decreased; $2013
C)   increased; $1038
D)   increased; 5 percent

Question 4

The presence of creates a difference in the value between the market price and the factor cost of a product.

Accepted Answer

A)   indirect taxes and consumption
B)   indirect taxes and subsidies
C)   subsidies and direct taxes
D)   corporate profits and subsidies

Question 5

All of the following household expenditures are included in consumption expenditure EXCEPT

Accepted Answer

A)   purchase of corporate stock.
B)   purchase of hair styling.
C)   purchase of a new purse.
D)   payment to a dentist for filling a tooth.

Question 6

Which of the following is included in "compensation of employees" part of the income approach to measuring GDP?
I. Wages and salaries.
II. Pension fund contributions.
III. Social security contributions.

Accepted Answer

A)   I and II
B)   I and III
C)   I only
D)   I, II and III

Question 7

The largest component of GDP in the expenditures approach is

Accepted Answer

A)   government expenditure on goods and services.
B)   net exports.
C)   personal consumption expenditures.
D)   gross private domestic investment.

Question 8

By common definition, a recession occurs when

Accepted Answer

A)   the international deficit worsens for at least two successive quarters.
B)   the inflation rate exceeds 3.5 percent.
C)   the government budget deficit exceeds the national debt.
D)   real GDP decreases for at least two successive quarters.

Question 9

Compared to the other sources of spending, net exports is

Accepted Answer

A)   small and negative.
B)   large and negative.
C)   small and positive.
D)   large and positive.

Question 10

Which of the following is true regarding the circular flow diagram?
I. "Aggregate income" is the flow of income earned by firms.
II. Retained earnings are considered income earned by firms rather than part of households' incom
III. The government, households, and firms all operate in the financial market.

Accepted Answer

A)   I only
B)   I and III
C)   I and II
D)   III only

Question 11

By itself, an increase in exports

Accepted Answer

A)   can either increase or decrease GDP, depending on whether the exports are durable or nondurable.
B)   means imports decrease by the same amount.
C)   decreases GDP.
D)   increases GDP.

Question 12

The bottom or low point of a recession just before an expansion begins is called

Accepted Answer

A)   the contraction.
B)   the peak.
C)   the pits.
D)   the trough.

Question 13

gross domestic product is the value of linked back to the prices of a single year.

Accepted Answer

A)   Real; total production
B)   Productivity; the consumer price index
C)   Real; production possibilities
D)   Nominal; total production

Question 14

-Using the information in the table above, calculate gross domestic product.

Accepted Answer

A)   $4,690 billion
B)   $5,130 billion
C)   $5,320 billion
D)   $4,760 billion

Question 15

An indirect tax is exemplified by

Accepted Answer

A)   an income tax.
B)   a subsidy.
C)   a sales tax.
D)   None of the above answers is correct.

Question 16

In the circular flow of income

Accepted Answer

A)   households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms.
B)   households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms.
C)   households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms.
D)   households sell goods and services while firms sell factors.

Question 17

-In the above figure, which point represents an economy which is at the peak part of a business cycle?

Accepted Answer

A)   point K
B)   point G
C)   point I
D)   point F

Question 18

The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes and subtracts subsidies is the

Accepted Answer

A)   income approach.
B)   added cost approach.
C)   expenditure approach.
D)   opportunity cost approach.

Question 19

If the objective were to measure economic welfare, then what adjustments would have to made to GDP to make it a better measure of economic welfare?

Accepted Answer

A)   The effect of pollution on the environment would need to be included.
B)   The amount of leisure time that households have would need to be included.
C)   Household production would need to be included.
D)   All of the above adjustments would need to be made.

Question 20

Depreciation is subtracted from gross domestic product to determine directly

Accepted Answer

A)   national income.
B)   net domestic product.
C)   consumption expenditures plus investment expenditures plus government expenditure plus net exports.
D)   disposable income.

Exam 4: Measuring Gdp and Economic Growth

Correct Answer
verified

A recession occurs when real GDP decreases for at least 6 months.

Correct Answer
verified

All of the following household expenditures are included in consumption expenditure EXCEPT

Correct Answer
verified

By common definition, a recession occurs when

Correct Answer
verified

-In the above figure, which point represents an economy which is at the peak part of a business cycle?

Correct Answer
verified

gross domestic product is the value of linked back to the prices of a single year.

Correct Answer
verified

If the objective were to measure economic welfare, then what adjustments would have to made to GDP to make it a better measure of economic welfare?

Correct Answer
verified

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexico's population was 104 million and GDP was $839 billion. Per GDP person by Between 2006 and 2007 in Mexico.

Correct Answer
verified

The largest component of GDP in the expenditures approach is

Correct Answer
verified

The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes and subtracts subsidies is the

Correct Answer
verified

An indirect tax is exemplified by

Correct Answer
verified

Depreciation is subtracted from gross domestic product to determine directly

Correct Answer
verified

Compared to the other sources of spending, net exports is

Correct Answer
verified

Which of the following is included in "compensation of employees" part of the income approach to measuring GDP? I. Wages and salaries. II. Pension fund contributions. III. Social security contributions.

Correct Answer
verified

-Using the information in the table above, calculate gross domestic product.

Correct Answer
verified

The presence of creates a difference in the value between the market price and the factor cost of a product.

Correct Answer
verified

By itself, an increase in exports

Correct Answer
verified

In the circular flow of income

Correct Answer
verified

The low point of economic activity during a business cycle is called the

Correct Answer
verified

The bottom or low point of a recession just before an expansion begins is called

Correct Answer
verified

Exam 4: Measuring Gdp and Economic Growth

Correct AnswerverifiedShow Answer

A recession occurs when real GDP decreases for at least 6 months.

Correct AnswerverifiedShow Answer

All of the following household expenditures are included in consumption expenditure EXCEPT

Correct AnswerverifiedShow Answer

By common definition, a recession occurs when

Correct AnswerverifiedShow Answer

-In the above figure, which point represents an economy which is at the peak part of a business cycle?

Correct AnswerverifiedShow Answer

gross domestic product is the value of linked back to the prices of a single year.

Correct AnswerverifiedShow Answer

If the objective were to measure economic welfare, then what adjustments would have to made to GDP to make it a better measure of economic welfare?

Correct AnswerverifiedShow Answer

It is estimated that in 2007, Mexico had a population of 110 million and GDP of $1 trillion. In 2006, Mexico's population was 104 million and GDP was $839 billion. Per GDP person by Between 2006 and 2007 in Mexico.

Correct AnswerverifiedShow Answer

The largest component of GDP in the expenditures approach is

Correct AnswerverifiedShow Answer

The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes and subtracts subsidies is the

Correct AnswerverifiedShow Answer

An indirect tax is exemplified by

Correct AnswerverifiedShow Answer

Depreciation is subtracted from gross domestic product to determine directly

Correct AnswerverifiedShow Answer

Compared to the other sources of spending, net exports is

Correct AnswerverifiedShow Answer

Which of the following is included in "compensation of employees" part of the income approach to measuring GDP? I. Wages and salaries. II. Pension fund contributions. III. Social security contributions.

Correct AnswerverifiedShow Answer

-Using the information in the table above, calculate gross domestic product.

Correct AnswerverifiedShow Answer

The presence of creates a difference in the value between the market price and the factor cost of a product.

Correct AnswerverifiedShow Answer

By itself, an increase in exports

Correct AnswerverifiedShow Answer

In the circular flow of income

Correct AnswerverifiedShow Answer

The low point of economic activity during a business cycle is called the

Correct AnswerverifiedShow Answer

The bottom or low point of a recession just before an expansion begins is called

Correct AnswerverifiedShow Answer

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