MA

Ch_10_MC_Algo

Macroeconomics Overview

  • Macroeconomists Study:

    • a. Individual households & firms

    • b. Interactions between households & firms

    • c. Regulations on firms & unions

    • d. Economy-wide phenomena. (Correct Answer)

Tools of Economic Analysis

  • the bacsic Supply and Demand Tools:

    • a. Only for individual markets

    • b. For overall economy, not individual markets

    • c. Central to microeconomics, seldom for macroeconomics

    • d. Central to both macroeconomic and microeconomic analysis. (Correct Answer)

Economic Well-being Measures

  • Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?

    • a. Stock market index

    • b. Producer price index

    • c. Gross Domestic Product (GDP) (Correct Answer)

    • d. Trade deficit

Understanding GDP

  • GDP Definition Gross domestic product measures

    • a. Measures both income and expenditures.(Correct Answer)

    • b. Measures expenditures only.

    • c. Measures income only.

    • d. Neither income nor expenditures.

  •  Expenditures on a nation's domestic production

    • a. Less than production

    • b. Equal to dosmestic production. (Correct Answer)

    • c. Greater than production

    • d. Could vary

  • For an economy as a whole,

    • a. Wages = profit

    • b. Consumption = income

    • c. Income = expenditure. (Correct Answer)

    • d. Consumption = saving

GDP Accounting Relationship

  • In the GDP accounts production equals

    • a. Income. (Correct Answer)

    • b. Income + saving

    • c. Income - government expenditures

    • d. Income - imports

Transactions and GDP

  • Transaction Impact on GDP:

    • a. More closely associated with income than expenditure. (Correct Answer)

    • b. Every transaction contributes equally

    • c. Firms must equal households in flow

    • d. Profits zero in circular-flows

    • Because every transaction has a buyer and a seller,

    • a. GDP is more closely associated with an economy's income than it is with an economy's expenditure.

    • b. every transaction contributes equally to an economy's income and to its expenditure.( correct answer)

    • c.the number of firms must be equal to the number of households in a simple circular-flow diagram.

    • d.firms' profits are necessarily zero in a simple circular-flow diagram.

  • If an economy's GDP rises, then it must be the case that the economy's

    • a. Rises = income & saving rise

    • b. Falls with market value rise

    • c. Market value falls & income rises

    • d. income and the market value of all production both rise.. (Correct Answer)

Circular-Flow Diagram Insights

  • Total Income & Expenditure in Circular Flow:

    • a. Never equal

    • b. Seldom equal

    • c. Equal only government doesn’t purchase

    • d. Always equal. (Correct Answer)

  • Household Spending in Actual Economy:

    • a. Spend all income.

    • b. Divide among sectors(Correct Answer)

    • c. Buy all goods produced

    • d. Save all income

  • In the actual economy, goods and services are purchased by

    • a. Households only

    • b. Households & firms only

    • c. Households & government, no firms

    • d. Households, firms, and government. (Correct Answer)

GDP Computation from Circular Flow

  •  According to the circular-flow diagram, GDP can be computed as

    • a. either the revenue firms receive from the sales of goods and services or the payments they make to factors of production.(Correct Answer)

    • b. Sales revenue only

    • c. Payments only

    • d. Neither

  • GDP from Market Relationships:

    • Figure 24-1:Refer to Figure 24-1. Which of the following pairs correctly identify W and Y?

      • a. W = Markets for factors, Y = Markets for goods.

      • b. Firms & households(Correct Answer)

      • c. Expenditures & income

      • d. Consumption & investment

Flow of Dollars

  • Correct Flow Identification in Figure 24-1:

    • a. A, L, N, B. (Correct Answer)

  • Identifying X and Z in Figure 24-1:

    • a. Market flows and outputs. (Correct Answer)

Computing GDP

  • GDP as Household Income:

    • a. Income from wages, rent, and profit. (Correct Answer)

    • b. Wages only

    • c. Payments for labor

    • d. Profits only

GDP Definition

  • GDP Defined:

    • a. Value of all goods produced in a country. (Correct Answer)

    • b. By citizens regardless of location

    • c. Final goods only

    • d. Final goods by citizens only

Calculating Aggregate GDP

  • Computation Basis for GDP:

    • a. Market prices. (Correct Answer)

  • Contribution Value Based on Prices:

    • a. Dress is five times as boots contribution

    • b. Boots contribute one-fifth of dress. (Correct Answer)

GDP Components

  • Included in GDP:

    • a. Market value of rental housing only

    • b. Market value of owner-occupied and rental housing. (Correct Answer)

  • Calculating GDP in Purchase Context:

    • a. Tutoring by a resident is included. (Correct Answer)

    • b. Foreign textbook purchase is not

    • c. Supplies by companies are included

    • d. Used textbook purchase excluded

Home Productions & GDP

  • Home Goods Contribution:

    • a. Included in GDP illegally

    • b. Home produced excluded; illegal included. (Correct Answer)

  • Behavioral Changes Impacting GDP:

    • a. Shift from home cooking to eating out increases GDP. (Correct Answer)

  • Correct Statements on Purchases:

    • Only grocery store purchases from Jane. (Correct Answer)

Goods Classification

  • Farmer Goods Classification:

    • a. Final goods

    • b. Intermediate goods. (Correct Answer)

  • Bicycle Company Contribution:

    • b. $230 to GDP. (Correct Answer)

Production Levels & GDP

  • Reduction in Production Indicator:

    • b. GDP likely decreased. (Correct Answer)

  • U.S. Citizen Purchase Abroad:

    • b. Included in Aruba's GDP, not U.S.'s. (Correct Answer)

  • Statistical Discrepancy Understanding:

    • a. Data imperfection causes discrepancies. (Correct Answer)

Income Measures Comparison

  • Order of U.S. Income Measures:

    • c. GNP, NNP, National income, PI, DPI. (Correct Answer)

  • Relation of GDP to GNP:

    • d. GNP = GDP - Income by foreign earned. (Correct Answer)

  • Net Factor Payments Calculation:

    • c. GDP lower than GNP. (Correct Answer)

  • Citizen Working Abroad Income:

    • b. Included in GDP only. (Correct Answer)

Understanding Depreciation

  • Term for Depreciation in Accounts:

    • a. "Consumption of fixed capital." (Correct Answer)

National Income vs. Net Product

  • Difference in National Income:

    • b. Statistical discrepancy factor. (Correct Answer)

Disposable Personal Income

  • Definition of Disposable Personal Income:

    • c. Households post taxes. (Correct Answer)

  • Knowing Disposable Personal Income Definition:

    • d. Total after government obligations. (Correct Answer)

Table Insights

  • GDP for Krugeveaux Calculation:

    • b. $600. (Correct Answer)

  • GNP Calculation for Krugeveaux:

    • c. $594. (Correct Answer)

  • Net National Product Calculation:

    • a. $590. (Correct Answer)

  • Personal Income Calculation:

    • d. $593. (Correct Answer)

  • Disposable Personal Income Calculation:

    • c. $719. (Correct Answer)

Investment Definitions

  • Investment in GDP:

    • c. Capital investments, inventories, structures. (Correct Answer)

  • Household Expenditure Types as Investment:

    • c. New house purchase. (Correct Answer)

Expenditures in GDP

  • Counted in GDP for Growth:

    • c. Spending on services. (Correct Answer)

  • Inventory Value Adjustment in GDP Context:

    • c. Treated as investment. (Correct Answer)

Government Spending Context

  • Government Purchases Definition:

    • c. All government levels. (Correct Answer)

  • Understanding Transfer Payments:

    • d. Excluded as not current production. (Correct Answer)

Inflation and GDP

  • Net Exports Calculation:

    • c. Y - (C + I + G). (Correct Answer)

  • Interpreting Negative Net Exports:

    • d. Imports > exports. (Correct Answer)

  • Impact on GDP from Social Security:

    • b. Increases $220. (Correct Answer)

  • GDP and GNP Relational Equality:

    • b. Domestic production equal to ownership. (Correct Answer)

Activity Reporting

  • Reporting Spending Changes:

    • c. Change in output or prices. (Correct Answer)

  • Real GDP Definition:

    • b. The valuation at constant prices. (Correct Answer)

  • Growth Measurement:

    • d. Percentage change in real GDP. (Correct Answer)

  • GDP Deflator Understanding:

    • c. Nominal to real GDP ratio. (Correct Answer)

Price Changes and GDP

  • Changes in GDP Deflator Reasons:

    • a. Changes in prices only. (Correct Answer)

  • Describing Overall Rise in Prices:

    • b. Inflation. (Correct Answer)

  • Percentage Level Change Calculation:

    • b. Inflation Rate. (Correct Answer)

  • Calculating Real GDP from Nominal:

    • c. $57.1 billion. (Correct Answer)

Historical GDP Analysis

  • Identifying GDP Deflator & Inflation Rate:

    • b. 9.16, -10.3. (Correct Answer)

  • GDP Growth Rate from Previous Years:

    • a. -8.62%. (Correct Answer)

Price Consistency

  • Impact of Constant Prices on Nominal GDP:

    • a. 8.62% decrease. (Correct Answer)

Inflation Rate Computation

  • Inflation Rate Change from 2016 to 2017:

    • b. 23.1%. (Correct Answer)

GDP Measurement Concepts

  • GDP for Lahland Measurement:

    • b. $10,000. (Correct Answer)

  • Recession Definition:

    • c. Decline in real GDP for two quarters. (Correct Answer)

GDP Per Person Understanding

  • Interpretation of GDP per Person:

    • c. Average person in economy. (Correct Answer)

Welfare Measurement

  • Society Value Measures:

    • c. GDP indicates purchasing power for welfare. (Correct Answer)

  • Impact of Production Law Changes:

    • b. GDP increases excluding leisure effect. (Correct Answer)

Nominal vs. Real GDP Growth

  • Evaluation of Nominal GDP Growth:

    • b. Real GDP per person grew less than nominal. (Correct Answer)

Summary of International Data

  • International Data Insights on GDP & Well-being:

    • c. Correlation between GDP and quality of life. (Correct Answer)

  • Quality of Life & GDP Correlation:

    • b. Positive correlation with longer life expectancy. (Correct Answer)