Question 1

-Assuming that the GDP breakdown shown in Table 2.1 is typical of a given year in the U.S. we can say that ________.

Accepted Answer

A)   federal defense spending is twice that of non-defense spending
B)   federal spending is twice as large as that of the states and local governments
C)   government spending constitutes about 40% of GDP
D)   all of the above
E)   none of the above

Question 2

The real interest rate differs from the nominal rate in that ________.

Accepted Answer

A)   it more accurately represents the true cost of borrowing
B)   it varies negatively with changes in the rate of inflation
C)   it is the better indicator of credit market conditions
D)   all of the above
E)   none of the above D

Question 3

The household and establishment surveys sometimes differ on the labor market conditions. This is probably because ________.

Accepted Answer

A)   the household survey counts a worker who holds two jobs twice and the establishment survey does not
B)   the household survey only counts employees of a company and the establishment survey also counts the self employed
C)   the household survey covers more workers than the establishment survey
D)   all of the above
E)   none of the above

Question 4

To avoid double counting in the calculation of GDP, which types of goods are typically excluded from the calculation?

Accepted Answer

A)   intermediate goods
B)   capital goods
C)   inventory goods
D)   nonmarket goods
E)   value-added goods A

Question 5

There are different interest rates associated with many types of securities. Which of the following statements is correct?

Accepted Answer

A)   they vary depending on the liquidity of the security
B)   they vary depending on the risk associated with the security
C)   except in very unusual times, most interest rates move together
D)   all of the above
E)   none of the above

Question 6

The inflation rate = ________.

Accepted Answer

A)   nominal GDP - real GDP
B)   growth rate in real GDP - growth rate in nominal GDP
C)   growth rate in real GDP + growth rate in nominal GDP
D)   nominal GDP ÷ real GDP
E)   none of the above E

Question 7

The statistic most often used by economists to measure the value of economic activity is ________.

Accepted Answer

A)   GDP
B)   the CPI
C)   labor-force participation rate
D)   the nominal interest rate
E)   the real interest rate

Question 8

The Fisher equation implies that an increase in the nominal rate of interest relative to the real rate indicates that ________.

Accepted Answer

A)   inflation is expected to rise
B)   inflation is expected to decrease
C)   the real cost of borrowing has increased
D)   the real cost of borrowing has decreased
E)   none of the above

Question 9

Real and Nominal GDP
 
-Based on the table "Real and Nominal GDP," if year one is the base year, then the inflation rate in year three is ________.

Accepted Answer

A)   14.6%
B)   9.5%
C)   9.9%
D)   11.5%
E)   16.5%

Question 10

All income, production, and expenditure variables that are measured at current market prices are referred to as ________.

Accepted Answer

A)   real variables
B)   nominal variables
C)   implicit variables
D)   index variables
E)   none of the above

Question 11

Consider a firm whose final output (and sales) in a particular year has a value of $1,200. To produce these goods, the firm used $500 worth of intermediate goods it had purchased in previous years plus $200 worth of newly-purchased intermediate goods. In the subsequent year, this same firm again sells $1,200 worth of final goods, but in this year has purchased $700 worth of intermediate goods, of which $100 is not used in current production but, rather, added to the firm's inventory. For each of these two years, calculate the value added by this firm. For each of these two years, calculate the contribution of this firm to the economy's GDP.

Accepted Answer

Value added in year one equals $1,200 fi...

Question 12

Which of the following is included in the calculation of national income?

Accepted Answer

A)   compensation of employees
B)   rental income
C)   indirect business taxes
D)   all of the above
E)   none of the above

Question 13

Figure 2.5 
-According to Figure 2.5, the United States civilian employment ratio in April 2010 was ________.

Accepted Answer

A)   142.5%
B)   34.8%
C)   58.8%
D)   65.2%
E)   none of the above

Question 14

To compute the CPI, the Bureau of Labor Statistics (BLS)  compiles a "basket of goods" that ________; each price in the index is weighted by ________.

Accepted Answer

A)   are produced in the United States; an expenditure survey
B)   the average farmer produces; how long it takes for the particular good to reach the market
C)   the average urban consumer buys; the quantity of the good that goes into the basket
D)   only members of congress purchase; a "luxury" score
E)   is typical of consumers below the poverty line; the perceived quality of the good

Question 15

Real and Nominal GDP
 
-Based on the table "Real and Nominal GDP," if year one is the base year, then the real GDP in year three, is ________.

Accepted Answer

A)   7200
B)   8250
C)   1050
D)   7500
E)   none of the above

Question 16

The unemployment rate that is typically reported in the media is ________.

Accepted Answer

A)   based on a survey from 150,000 business establishments on weekly earnings, number of workers and hours worked
B)   computed every three months
C)   based on a survey of 60,000 households
D)   reported by the Treasury Department
E)   none of the above

Question 17

An increase in the expected rate of inflation is most likely to cause an increase in ________.

Accepted Answer

A)   the ex post real interest rate
B)   the ex ante real interest rate
C)   the nominal interest rate
D)   the expected real interest rate
E)   none of the above

Question 18

The production approach to measuring GDP requires ________.

Accepted Answer

A)   that the market value of a given good is a reasonable approximation of its economic value
B)   that all goods and services be added up before assigning a market value
C)   that no good or service rendered outside the market be included in GDP
D)   all of the above
E)   none of the above

Question 19

Capital goods are typically purchased to ________. They get included in GDP ________.

Accepted Answer

A)   replace raw materials; in the year they are produced
B)   enable the investor to produce other goods and services; in each year they are utilized
C)   enable the investor to consume less in the current period; as they are used up in the stages of production
D)   enable the investor to produce other goods and services; in the year they are produced
E)   none of the above

Question 20

Who helps calculate GDP in the United States?

Accepted Answer

A)   the Bureau of Economic Analysis
B)   the Census Bureau
C)   the Bureau of Labor Statistics
D)   all of the above
E)   none of the above

Exam 2: Measuring Macroeconomic Data

-Assuming that the GDP breakdown shown in Table 2.1 is typical of a given year in the U.S. we can say that ________.

Correct Answer
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The real interest rate differs from the nominal rate in that ________.

Correct Answer
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D

The household and establishment surveys sometimes differ on the labor market conditions. This is probably because ________.

Correct Answer
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To avoid double counting in the calculation of GDP, which types of goods are typically excluded from the calculation?

Correct Answer
verified
A

There are different interest rates associated with many types of securities. Which of the following statements is correct?

Correct Answer
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The inflation rate = ________.

Correct Answer
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E

The statistic most often used by economists to measure the value of economic activity is ________.

Correct Answer
verified

The Fisher equation implies that an increase in the nominal rate of interest relative to the real rate indicates that ________.

Correct Answer
verified

Real and Nominal GDP -Based on the table "Real and Nominal GDP," if year one is the base year, then the inflation rate in year three is ________.

Correct Answer
verified

All income, production, and expenditure variables that are measured at current market prices are referred to as ________.

Correct Answer
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Correct Answer
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Value added in year one equals $1,200 fi...
View Answer

Which of the following is included in the calculation of national income?

Correct Answer
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Figure 2.5 -According to Figure 2.5, the United States civilian employment ratio in April 2010 was ________.

Correct Answer
verified

To compute the CPI, the Bureau of Labor Statistics (BLS) compiles a "basket of goods" that ; each price in the index is weighted by .

Correct Answer
verified

Real and Nominal GDP -Based on the table "Real and Nominal GDP," if year one is the base year, then the real GDP in year three, is ________.

Correct Answer
verified

The unemployment rate that is typically reported in the media is ________.

Correct Answer
verified

An increase in the expected rate of inflation is most likely to cause an increase in ________.

Correct Answer
verified

The production approach to measuring GDP requires ________.

Correct Answer
verified

Capital goods are typically purchased to . They get included in GDP .

Correct Answer
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Who helps calculate GDP in the United States?

Correct Answer
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Exam 2: Measuring Macroeconomic Data

-Assuming that the GDP breakdown shown in Table 2.1 is typical of a given year in the U.S. we can say that ________.

Correct AnswerverifiedShow Answer

The real interest rate differs from the nominal rate in that ________.

Correct AnswerverifiedD

The household and establishment surveys sometimes differ on the labor market conditions. This is probably because ________.

Correct AnswerverifiedShow Answer

To avoid double counting in the calculation of GDP, which types of goods are typically excluded from the calculation?

Correct AnswerverifiedA

There are different interest rates associated with many types of securities. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The inflation rate = ________.

Correct AnswerverifiedE

The statistic most often used by economists to measure the value of economic activity is ________.

Correct AnswerverifiedShow Answer

The Fisher equation implies that an increase in the nominal rate of interest relative to the real rate indicates that ________.

Correct AnswerverifiedShow Answer

Real and Nominal GDP -Based on the table "Real and Nominal GDP," if year one is the base year, then the inflation rate in year three is ________.

Correct AnswerverifiedShow Answer

All income, production, and expenditure variables that are measured at current market prices are referred to as ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedValue added in year one equals $1,200 fi...View AnswerShow Answer

Which of the following is included in the calculation of national income?

Correct AnswerverifiedShow Answer

Figure 2.5 -According to Figure 2.5, the United States civilian employment ratio in April 2010 was ________.

Correct AnswerverifiedShow Answer

To compute the CPI, the Bureau of Labor Statistics (BLS) compiles a "basket of goods" that ________; each price in the index is weighted by ________.

Correct AnswerverifiedShow Answer

Real and Nominal GDP -Based on the table "Real and Nominal GDP," if year one is the base year, then the real GDP in year three, is ________.

Correct AnswerverifiedShow Answer

The unemployment rate that is typically reported in the media is ________.

Correct AnswerverifiedShow Answer

An increase in the expected rate of inflation is most likely to cause an increase in ________.

Correct AnswerverifiedShow Answer

The production approach to measuring GDP requires ________.

Correct AnswerverifiedShow Answer

Capital goods are typically purchased to ________. They get included in GDP ________.

Correct AnswerverifiedShow Answer

Who helps calculate GDP in the United States?

Correct AnswerverifiedShow Answer

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D

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A

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E

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Correct Answer
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Correct Answer
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Correct Answer
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Value added in year one equals $1,200 fi...
View Answer

Correct Answer
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Correct Answer
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To compute the CPI, the Bureau of Labor Statistics (BLS) compiles a "basket of goods" that ; each price in the index is weighted by .

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Capital goods are typically purchased to . They get included in GDP .

Correct Answer
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Correct Answer
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