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- 1. Multiple Choice
The circular flow diagram is a simple model of the macroeconomy in which
the flow of money into each market or sector exceeds the flow of money coming out of that market or sector.
the value of stocks equals the value of bonds.
households own the factors of production.
there is only one household and one firm.
goods and services are sold in factor markets.
- 2. Multiple Choice
GDP is equal to
the total value of all goods and services produced in an economy during a given period of time.
C + I + G + Imports
the total value of intermediate goods plus final goods
the total income received by producers of final goods and services
none of the above
- 3. Multiple Choice
Which of the following is included in GDP?
changes to inventories
intermediate goods
used goods
financial assets (stocks and bonds)
non-market activities
- 4. Multiple Choice
Which of the following is removed from GDP?
capital goods such as machinery
imports
the value of domestically produced services
the construction of structures
government purchases of goods and services
- 5. Multiple Choice
Which of the following components makes up the largest percentage of GDP measured by aggregate spending?
consumer spending
investment spending
government spending
exports
imports
- 6. Multiple Choice
Which of the following is true of Real GDP?
I. It is adjusted for changes in prices.
II. It is always equal to Nominal GDP.
III. It increases whenever aggregate output increases.
I only
II only
III only
I and III
I, II, and III
- 7. Multiple Choice
The best measure for comparing a country's aggregate output over time is
Nominal GDP
Real GDP
Nominal GDP per capita
Real GDP per capita
Average GDP per capita
- 8. Multiple Choice
Use the information provided in the table for an economy that produces only apples and oranges. Assume year 1 is the base year.
What was the value of Real GDP in each year?
$1,400 (Year 1); $2,700 (Year 2)
$1,900 (Year 1); $2,700 (Year 2)
$1,400 (Year 1); $2,000 (Year 2)
$1,900 (Year 1); $2,000 (Year 2)
$1,400 (Year 1); $1,900 (Year 2)
- 9. Multiple Choice
Real GDP per capita is an imperfect measure of the quality of life in part because it
includes the value of leisure time.
excludes expenditures on education.
includes expenditures on natural disasters.
excludes expenditures on entertainment.
includes the value of housework.
- 10. Multiple Choice
Which of the following can be determined with the information in the table?
I. Residents of Japan were worse off than residents of the United States or the European Union.
II. The European Union had a higher Nominal GDP than the United States.
III. The European Union had a larger economy than the United States.
I only
II only
III only
II and III
I, II, and III
- 11. Multiple Choice
What is the value of GDP?
$10,000
$11,600
$14,100
$15,100
$18,100
- 12. Multiple Choice
What is the value of net exports?
$3,500
$2,000
$1,500
$500
-$500
- 13. Multiple Choice
What is the value of GDP?
$550
$650
$750
$770
$790
- 14. Multiple Choice
The $750 in wages, profit, interest, and rent shown by the orange arrow pointing into the factor markets box illustrates the calculation of GDP using which approach?
value-added
aggregate spending
expenditure
income
resource
- 15. Multiple Choice
Investment spending includes spending on which of the following?
stocks
physical capital
inputs
services
reductions in inventories
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