You are on page 1of 32

MacroReviewTest

Student: ___________________________________________________________________________

1. The two general types of economic systems that exist today are:
A. market systems and capitalism.
B. socialism and central planning.
C. market systems and command systems.
D. laissez faire systems and pure command systems.

2. Specialization in production is important primarily because it:
A. results in greater total output.
B. allows society to avoid the coincidence-of-wants problem.
C. allows society to trade by barter.
D. allows society to have fewer capital goods.

3. The coordination problem in the centrally planned economies refers to the idea
that:
A. planners had to direct required inputs to each enterprise.
B. the price level and the level of employment were inversely related.
C. the immediate effect of more investment was less consumption.
D. exports had to be equal to imports for a central plan to work.

4. In terms of the circular flow diagram, households make expenditures in the
_____ market and receive income through the _____ market.
A. product; financial
B. resource; product
C. product; resource
D. capital; product

5. In the circular flow model:
A. households sell resources to firms.
B. households receive income through the product market.
C. households spend income in the resource market.
D. businesses neither buy nor sell resources.

6. Households and businesses are:
A. both buyers in the resource market.
B. both sellers in the product market.
C. sellers in the resource and product markets respectively.
D. sellers in the product and resource markets respectively.

7. In a competitive economy prices:
A. influence consumers in their purchases of goods and services.
B. influence businesses in their purchases of economic resources.
C. influence workers in making occupational choices.
D. do all of the above.

8. In a market economy the distribution of output will be determined primarily by:
A. consumer needs and preferences.
B. the quantities and prices of the resources that households supply.
C. government regulations that provide a minimum income for all.
D. a social consensus as to what distribution of income is most equitable.

9. The market system's answer to the fundamental question "Who will get the
goods and services?" is essentially:
A. "Those willing and able to pay for them."
B. "Those who physically produced them."
C. "Those who most need them."
D. "Those who get utility from them."

10. The market system:
A. produces considerable inefficiency in the use of scarce resources.
B. effectively harnesses the incentives of workers and entrepreneurs.
C. is inconsistent with freedom of choice in the long run.
D. has slowly lost ground to emerging command systems.

11. The law of demand states that:
A. price and quantity demanded are inversely related.
B. the larger the number of buyers in a market, the lower will be product price.
C. price and quantity demanded are directly related.
D. consumers will buy more of a product at high prices than at low prices.

12. Economists use the term demand to
A. a particular price-quantity combination on a stable demand curve.
B. the total amount spent on a particular commodity over a stipulated time
period.
C. an upsloping line on a graph that relates consumer purchases and product
price.
D. a schedule of various combinations of market prices and amounts demanded.

13. An increase in the price of a product will reduce the amount of it purchased
because:
A. supply curves are upsloping.
B. the higher price means that real incomes have risen.
C. consumers will substitute other products for the one whose price has risen.
D. consumers substitute relatively high-priced for relatively low-priced products.

This prediction is based on the assumption that: A. C. a rise in consumer incomes will increase the demand for bicycles. C. population growth that causes an expansion in the number of persons consuming A B. 15. . which in turn caused the price of natural gas to rise. complementary goods and the higher price for oil decreased the supply of natural gas. an increase in money income if A is a normal good C. B. B. Which of the following will cause the demand curve for product A to shift to the left? A. C. their consumption of these goods frequently declines. a decrease in the price of complementary product C D. An economist for a bicycle company predicts that. an increase in money income if A is an inferior good 17. 16. substitute goods. College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. there are many goods that are complementary to bicycles. B. D. complementary goods. substitute goods and the higher price for oil increased the demand for natural gas. bicycles are normal goods. there are few goods that are substitutes for bicycles. other things equal. inferior goods.14. D. normal goods. This can best be explained by saying that oil and natural gas are: A. In 2003 the price of oil increased. complementary goods and the higher price for oil increased the demand for natural gas. When they finish school and start their careers. D. there are many goods that are substitutes for bicycles. substitute goods and the higher price for oil decreased the supply of natural gas. This suggests that ramen noodles and boxed macaroni and cheese are: A.

B. D. An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the: A. supply curve for cigarettes rightward. $3. substitute goods. demand curve for cigarettes rightward. $2. Cameras and film are: A. Equilibrium price will be: A. D. $4. C. Refer to the above data. B. . supply curve for cigarettes leftward. inferior goods. $1. C. expectations about the future price of the product C. the number of firms producing this good B. the price of the product for which the supply curve is relevant 20. In moving along a stable supply curve which of the following is not held constant? A. independent goods. techniques used in producing this product D. complementary goods. B. D. C. 19. Answer the next question(s) on the basis of the given supply and demand data for wheat: 21.18. demand curve for cigarettes leftward.

B. D. decrease the quantity of coffee consumed. price is below the equilibrium level. the demand and supply curves fail to intersect. 23. C. D. An unusually large crop of coffee beans might: A. If the price in this market was $4: A.22. if the amount producers want to sell is equal to the amount consumers want to buy. Refer to the above data. There will be a surplus of a product when: A. increase the supply of coffee. the supply curve is downward sloping and the demand curve is upward sloping. quantity demanded would equal quantity supplied. whenever the demand curve is downsloping and the supply curve is upsloping. provided there is no surplus of the product. B. C. C. C. increase the price of coffee. 24. . D. D. consumers want to buy less than producers offer for sale. there would be a shortage of wheat. A market is in equilibrium: A. 25. buyers would want to purchase more wheat than is currently being supplied. increase the price of tea. the market would clear. B. at all prices above that shown by the intersection of the supply and demand curves. B. farmers would not be able to sell all their wheat.

D. government is imposing a maximum legal price that is typically below the equilibrium price. sellers are artificially restricting supply to raise price. Price ceilings and price floors: A. 27. a surplus of 21 units would arise. national income minus all nonincome charges against output. monetary value of all economic resources used in producing a year's output. A price floor means that: A. regardless of where they are living. inflation is severe in this particular market. A nation's gross domestic product (GDP): A. produced in a specific year. The GDP is the: A. make the rationing function of free markets more efficient. 29.26. . cause surpluses and shortages respectively. C. D. 30. D. D. B. a shortage of 21 units would arise. C. is always some amount less than its C + Ig + G + Xn. B. D. B. is the dollar value of the total output produced by its citizens. neither a shortage nor a surplus would arise. interfere with the rationing function of prices. government is imposing a minimum legal price that is typically above the equilibrium price. B. monetary value of all final goods and services produced within a nation in a particular year. monetary value of all goods and services. shift demand and supply curves and therefore have no effect on the rationing function of prices. C. If government set a maximum price of $45 in the above market: A. C. final and intermediate. can be found by summing C + In + S + Xn. is the dollar value of the total output produced within the borders of the nation. a surplus of 40 units would arise. B. 28. C.

private investment minus public investment. C. Gross investment refers to: A. be determining the market value of all resources used in the production process. Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. and net exports. C. Net exports are negative when: A. C. 34. D. obtain a sum substantially larger than the GDP. exports. consumption. D. depreciation exceeds domestic investment. $180 billion. and rents. and imports. B. C. net investment plus net exports. 35. government purchases. consumption. GDP in year 2 is: A. 33. consumption. B. government purchases. $210 billion. net investment after it has been "inflated" for changes in the price level. be determining value added for the economy. $190 billion. B. a nation's exports exceed its imports. B. By summing the dollar value of all market transactions in the economy we would: A. D. a nation's imports exceed its exports. be measuring GDP. D. net investment plus replacement investment. B. the economy's stock of capital goods is declining. consumption.31. 32. government purchases. . investment. wages. D. GDP can be calculated by summing: A. investment. $200 billion. and imports. investment. C. investment.

D.36. public capital goods only. 39. B. 37. we can conclude that: A. Government purchases include government spending on: A. C. government consumption goods only. D. nominal GDP is rising but real GDP is declining. GDP excludes: A. . C. D. C. included when calculating GDP because they are a category of investment spending. C. D. net investment is negative. included when calculating GDP because they increase the spending of recipients. the economy is importing more than it exports. the economy's production capacity is expanding. government consumption goods and public capital goods. the production of nondurable goods. B. B. the production of services. Transfer payments are: A. public capital goods. excluded when calculating GDP because they do not reflect current production. positive changes in inventories. the market value of unpaid work in the home. government consumption goods. excluded when calculating GDP because they only reflect inflation. B. and transfer payments. 38. If depreciation (consumption of fixed capital) exceeds domestic investment.

$392. $467. 40. Refer to the above data. E. Answer the next question(s) on the basis of the following data. 42. D. $390. D. 41. C. B. $402. $512. B. $447. Refer to the above data. D. $402. C. $417. NDP is: A. $362. $372. C. B. Refer to the above data. . $422. GDP is: A. $370. $492. All figures are in billions of dollars. NI is: A.

$408. B.S. $274. Refer to the above data.S. nominal GDP increased but U. 46. the price level rose by more than nominal GDP. $314. D. $437. We can conclude that: A. B. nominal income declined by more than personal income. current output at current prices. exchange rates. $284. B. the GDP price index. 47. current output at base year prices. Nominal GDP is adjusted for price changes through the use of: A. C. Real GDP measures: A. C. B. D. the price level fell by more than real GDP. real GDP declined. C. D. D. . real wages declined by more than real GDP. $402.43. D. C. PI is: A. Refer to the above data. $329. base year output at current prices. $346. U. B. DI is: A. the Consumer Price Index (CPI). C. 45. 44. the Producer Price Index (PPI). base year output at current exchange rates. In the second quarter (3-month period) of 2001.

C. C. B. they do not take into account the adverse effects of economic activity on the environment. D. the GDP price index for that year is: A. C. 49. none of the above. B. 100. they do not take into account all changes in product quality. Assume that the size of the underground economy increases both absolutely and relatively over time. D. As a result: A. 240. Environmental pollution is accounted for in: A. 200. .48. the accuracy of GDP will be unaffected through time. B. 50. GDP data are criticized as being inaccurate measures of economic welfare because: A. of all of the above considerations. GDP will tend to increasingly understate the level of output through time. 300. B. real GDP will rise more rapidly than nominal GDP. D. GDP. GDP will tend to increasingly overstate the level of output through time. C. they do not take into account changes in the amount of leisure. 51. D. If real GDP in a particular year is $80 billion and nominal GDP is $240 billion. PI. DI.

market systems and command systems.Chapter 02 #1 Micro: 29 Topic: 1 Type: Fact 2. socialism and central planning. The two general types of economic systems that exist today are: a. Specialization in production is important primarily because it: A. d. results in greater total output. laissez faire systems and pure command systems. Econ: 29 Learning Objective: 2-1 Macro: 29 McConnell . b. allows society to have fewer capital goods. b. d. c. market systems and capitalism. allows society to trade by barter.MacroReviewTest Key 1. Econ: 32 Learning Objective: 2-2 Macro: 32 McConnell . allows society to avoid the coincidence-of-wants problem.Chapter 02 #20 Micro: 32 Status: New Topic: 2 Type: Definition . C.

Chapter 02 #66 Micro: 38 Status: New Topic: 5 Type: Application of a Concept 4. capital. households sell resources to firms. c. d. c. product C. In the circular flow model: A. In terms of the circular flow diagram. a. d. Econ: 38 Learning Objective: 2-1 Macro: 38 McConnell . Econ: 39 Learning Objective: 2-5 Macro: 39 McConnell . planners had to direct required inputs to each enterprise. households make expenditures in the _____ market and receive income through the _____ market. product. households receive income through the product market. financial b. the price level and the level of employment were inversely related. businesses neither buy nor sell resources.Chapter 02 #89 Micro: 39 Topic: 6 Type: Definition . The coordination problem in the centrally planned economies refers to the idea that: A. b. exports had to be equal to imports for a central plan to work.Chapter 02 #86 Micro: 39 Topic: 6 Type: Definition 5. households spend income in the resource market. b.3. resource. resource d. the immediate effect of more investment was less consumption. product Econ: 39 Learning Objective: 2-5 Macro: 39 McConnell . product.

d. D. Econ: 35 Learning Objective: 2-3 Macro: 35 McConnell .Chapter 02 #40 Micro: 34 Status: New Topic: 3 Type: Application of a Concept 8. c. both buyers in the resource market.6. B. influence workers in making occupational choices. c.Chapter 02 #44 Micro: 35 Status: New Topic: 3 Type: Application of a Concept . b. government regulations that provide a minimum income for all. sellers in the resource and product markets respectively. C. Econ: 34 Learning Objective: 2-3 Macro: 34 McConnell . the quantities and prices of the resources that households supply. d. b. a social consensus as to what distribution of income is most equitable. both sellers in the product market. influence businesses in their purchases of economic resources. do all of the above. sellers in the product and resource markets respectively. Econ: 39 Learning Objective: 2-5 Macro: 39 McConnell . In a competitive economy prices: a.Chapter 02 #88 Micro: 39 Topic: 6 Type: Definition 7. In a market economy the distribution of output will be determined primarily by: a. influence consumers in their purchases of goods and services. Households and businesses are: a. consumer needs and preferences.

B. price and quantity demanded are directly related.Chapter 03 #3 Micro: 46 Topic: 1 Type: Definition .Chapter 02 #54 Micro: 35 Status: New Topic: 3 Type: Application of a Concept 10. the larger the number of buyers in a market." b." c. b. produces considerable inefficiency in the use of scarce resources. c. Econ: 37 Learning Objective: 2-3 Macro: 37 McConnell .9. consumers will buy more of a product at high prices than at low prices." Econ: 35 Learning Objective: 2-3 Macro: 35 McConnell . effectively harnesses the incentives of workers and entrepreneurs. is inconsistent with freedom of choice in the long run. "Those who most need them." d. price and quantity demanded are inversely related. the lower will be product price. d.Chapter 02 #65 Micro: 37 Status: New Topic: 4 Type: Application of a Concept 11. Econ: 46 Learning Objective: 3-1 Macro: 46 McConnell . has slowly lost ground to emerging command systems. c. The market system: a. d. "Those willing and able to pay for them. The law of demand states that: A. "Those who physically produced them. "Those who get utility from them. The market system's answer to the fundamental question "Who will get the goods and services?" is essentially: A.

Econ: 45 Learning Objective: 3-1 Macro: 45 McConnell .Chapter 03 #11 Micro: 46 Topic: 1 Type: Definition .12. Econ: 46 Learning Objective: 3-1 Macro: 46 McConnell . C. supply curves are upsloping. c. d. b. a schedule of various combinations of market prices and amounts demanded. consumers will substitute other products for the one whose price has risen. b. consumers substitute relatively high-priced for relatively low-priced products. An increase in the price of a product will reduce the amount of it purchased because: a. the total amount spent on a particular commodity over a stipulated time period. D. an upsloping line on a graph that relates consumer purchases and product price. the higher price means that real incomes have risen. a particular price-quantity combination on a stable demand curve. Economists use the term demand to a.Chapter 03 #6 Micro: 45 Topic: 1 Type: Definition 13.

there are many goods that are complementary to bicycles.Chapter 03 #23 Micro: 49 Topic: 2 Type: Application of Concept 15. b. In 2003 the price of oil increased. This can best be explained by saying that oil and natural gas are: a. c. d. substitute goods and the higher price for oil increased the demand for natural gas. complementary goods and the higher price for oil increased the demand for natural gas. An economist for a bicycle company predicts that. Econ: 49 Learning Objective: 3-1 Macro: 49 McConnell . This prediction is based on the assumption that: a. a rise in consumer incomes will increase the demand for bicycles. there are many goods that are substitutes for bicycles. D.Chapter 03 #24 Micro: 48 Topic: 2 Type: Application of Concept .14. Econ: 48 Learning Objective: 3-1 Macro: 48 McConnell . other things equal. c. B. which in turn caused the price of natural gas to rise. bicycles are normal goods. complementary goods and the higher price for oil decreased the supply of natural gas. there are few goods that are substitutes for bicycles. substitute goods and the higher price for oil decreased the supply of natural gas.

b.Chapter 03 #38 Micro: 48 Status: New Topic: 2 Type: Application of Concept . This suggests that ramen noodles and boxed macaroni and cheese are: A.Chapter 03 #35 Micro: 48 Topic: 2 Type: Application of Concept 17. normal goods. Econ: 48 Learning Objective: 3-1 Macro: 48 McConnell . population growth that causes an expansion in the number of persons consuming A b. an increase in money income if A is an inferior good Econ: 48 Learning Objective: 3-1 Macro: 48 McConnell . complementary goods. their consumption of these goods frequently declines. inferior goods. an increase in money income if A is a normal good c.16. substitute goods. c. When they finish school and start their careers. Which of the following will cause the demand curve for product A to shift to the left? a. College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. d. a decrease in the price of complementary product C D.

the price of the product for which the supply curve is relevant Econ: 53 Learning Objective: 3-2 Macro: 53 McConnell . Cameras and film are: a. c. expectations about the future price of the product c. demand curve for cigarettes rightward. supply curve for cigarettes rightward. d. Econ: 49 Learning Objective: 3-1 Macro: 49 McConnell .Chapter 03 #90 Micro: 52 Status: New Topic: 5 Type: Application of Concept .18. Econ: 52 Learning Objective: 3-2 Macro: 52 McConnell . complementary goods. inferior goods. techniques used in producing this product D. B. b. demand curve for cigarettes leftward. the number of firms producing this good b.Chapter 03 #44 Micro: 49 Topic: 2 Type: Application of Concept 19.Chapter 03 #83 Micro: 53 Topic: 5 Type: Application of Concept 20. independent goods. An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the: a. substitute goods. In moving along a stable supply curve which of the following is not held constant? a. supply curve for cigarettes leftward. D. c.

$2. farmers would not be able to sell all their wheat. the market would clear.Chapter 03 #100 Micro: 53 Topic: 6 Type: Table . $4.Chapter 03 21.Chapter 03 #99 Micro: 53 Topic: 6 Type: Table 22. Refer to the above data. d. there would be a shortage of wheat. quantity demanded would equal quantity supplied.Answer the next question(s) on the basis of the given supply and demand data for wheat: McConnell . buyers would want to purchase more wheat than is currently being supplied. Econ: 53 Learning Objective: 3-3 Macro: 53 McConnell . d. $3. C. b. C. Refer to the above data. $1. Equilibrium price will be: a. Econ: 53 Learning Objective: 3-3 Macro: 53 McConnell . b. If the price in this market was $4: a.

An unusually large crop of coffee beans might: A. There will be a surplus of a product when: a. if the amount producers want to sell is equal to the amount consumers want to buy. the supply curve is downward sloping and the demand curve is upward sloping. b. consumers want to buy less than producers offer for sale. b. Econ: 53 Learning Objective: 3-2 Macro: 53 McConnell . C. b.23. whenever the demand curve is downsloping and the supply curve is upsloping. c. Econ: 53 Learning Objective: 3-3 Macro: 53 McConnell . A market is in equilibrium: a. c. increase the supply of coffee. the demand and supply curves fail to intersect. d.Chapter 03 #126 Micro: 54 Topic: 6 Type: Definition 25. d.Chapter 03 #106 Micro: 53 Topic: 6 Type: Definition 24. at all prices above that shown by the intersection of the supply and demand curves. Econ: 54 Learning Objective: 3-3 Macro: 54 McConnell . increase the price of coffee. provided there is no surplus of the product.Chapter 03 #153 Micro: 53 Topic: 7 Type: Application of Concept . D. decrease the quantity of coffee consumed. increase the price of tea. price is below the equilibrium level.

Chapter 03 26. Econ: 58 Learning Objective: 3-5 Macro: 58 McConnell . b. a shortage of 21 units would arise. c. neither a shortage nor a surplus would arise. Econ: 59 Learning Objective: 3-5 Macro: 59 McConnell . a surplus of 21 units would arise.Chapter 03 #185 Micro: 58 Topic: 8 Type: Table 27. inflation is severe in this particular market. b. A price floor means that: a. c.Chapter 03 #192 Micro: 59 Status: New Topic: 8 Type: Definition . If government set a maximum price of $45 in the above market: a.McConnell . sellers are artificially restricting supply to raise price. a surplus of 40 units would arise. D. government is imposing a maximum legal price that is typically below the equilibrium price. D. government is imposing a minimum legal price that is typically above the equilibrium price.

Econ: 106 Learning Objective: 6-1 Macro: 106 McConnell . A nation's gross domestic product (GDP): A. interfere with the rationing function of prices.Chapter 03 #196 Micro: 60 Topic: 8 Type: Application of Concept 29. b. final and intermediate. monetary value of all goods and services. national income minus all nonincome charges against output. d. The GDP is the: A. b.Chapter 06 #3 Topic: 1 Type: Definition . C. Econ: 60 Learning Objective: 3-5 Macro: 60 McConnell . d. is the dollar value of the total output produced by its citizens. monetary value of all economic resources used in producing a year's output. b. regardless of where they are living. can be found by summing C + In + S + Xn. Price ceilings and price floors: a. is always some amount less than its C + Ig + G + Xn. produced in a specific year. Econ: 106 Learning Objective: 6-1 Macro: 106 McConnell . cause surpluses and shortages respectively. is the dollar value of the total output produced within the borders of the nation. monetary value of all final goods and services produced within a nation in a particular year. shift demand and supply curves and therefore have no effect on the rationing function of prices.28.Chapter 06 #1 Topic: 1 Type: Definition 30. d. c. make the rationing function of free markets more efficient. c.

be measuring GDP. Econ: 106 Learning Objective: 6-1 Macro: 106 McConnell . the economy's stock of capital goods is declining.Chapter 06 #16 Topic: 2 Type: Application of Concept 33. and net exports. wages. investment. By summing the dollar value of all market transactions in the economy we would: a.Chapter 06 #9 Topic: 1 Type: Application of Concept 32. c. investment. d. Net exports are negative when: A. d. and imports. be determining the market value of all resources used in the production process. c. depreciation exceeds domestic investment.31. obtain a sum substantially larger than the GDP. B. consumption.Chapter 06 #21 Topic: 2 Type: Application of Concept . be determining value added for the economy. and imports. a nation's imports exceed its exports. GDP can be calculated by summing: a. consumption. investment. government purchases. investment. a nation's exports exceed its imports. B. consumption. government purchases. exports. c. Econ: 108 Learning Objective: 6-1 Macro: 108 McConnell . consumption. government purchases. d. Econ: 110 Learning Objective: 6-1 Macro: 110 McConnell . b. and rents.

c. GDP in year 2 is: a. public capital goods only. d. d. government consumption goods and public capital goods. b. net investment plus net exports. Econ: 109 Learning Objective: 6-1 Macro: 109 McConnell . Gross investment refers to: a. $200 billion. $190 billion. B. Econ: 109 Learning Objective: 6-1 Macro: 109 McConnell . Government purchases include government spending on: A. net investment after it has been "inflated" for changes in the price level. Econ: 108 Learning Objective: 6-1 Macro: 108 McConnell . Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. b. $210 billion. net investment plus replacement investment.Chapter 06 #20 Topic: 2 Type: Definition 35. government consumption goods only. and transfer payments. c. government consumption goods. c.34. public capital goods.Chapter 06 #35 Topic: 2 Type: Definition . D.Chapter 06 #29 Topic: 2 Type: Complex Analysis 36. private investment minus public investment. $180 billion.

Chapter 06 #37 Topic: 2 Type: Application of Concept 38. the market value of unpaid work in the home. B. c. the production of nondurable goods. b. included when calculating GDP because they are a category of investment spending. If depreciation (consumption of fixed capital) exceeds domestic investment.Chapter 06 #57 Topic: 3 Type: Application of Concept . net investment is negative. Econ: 109 Learning Objective: 6-2 Macro: 109 McConnell . c. the production of services. B. d. the economy is importing more than it exports. c. excluded when calculating GDP because they only reflect inflation. Econ: 118 Learning Objective: 6-1 Macro: 118 McConnell . the economy's production capacity is expanding. d. excluded when calculating GDP because they do not reflect current production. included when calculating GDP because they increase the spending of recipients. positive changes in inventories. nominal GDP is rising but real GDP is declining. Transfer payments are: a.Chapter 06 #47 Topic: 3 Type: Application of Concept 39.37. Econ: 110 Learning Objective: 6-1 Macro: 110 McConnell . we can conclude that: a. GDP excludes: A. d.

$492. Econ: 110 Learning Objective: 6-1 Macro: 110 McConnell . d. Refer to the above data.Chapter 06 40. c. McConnell . Answer the next question(s) on the basis of the following data. $417. $422. All figures are in billions of dollars. B. $390. $512. e. GDP is: a.Chapter 06 #60 Topic: 4 Type: Table .

$314. c. c.41. $402. PI is: A. $447. Refer to the above data. b. d. $402. Econ: 113 Learning Objective: 6-2 Macro: 113 McConnell . b. d.Chapter 06 #62 Status: New Topic: 4 Type: Table 43. $392. $437. Refer to the above data. Econ: 113 Learning Objective: 6-2 Macro: 113 McConnell . $370. $362.Chapter 06 #61 Topic: 4 Type: Table 42. Econ: 113 Learning Objective: 6-2 Macro: 113 McConnell . D. $467. $372. b.Chapter 06 #63 Status: New Topic: 4 Type: Table . C. NI is: a. Refer to the above data. $346. NDP is: a. $408.

C. the Consumer Price Index (CPI). Real GDP measures: a. Nominal GDP is adjusted for price changes through the use of: a. exchange rates.Chapter 06 #109 Topic: 7 Type: Definition . current output at current prices. $284. d. $329. base year output at current prices. b. the GDP price index. Refer to the above data. b. c. current output at base year prices.Chapter 06 #64 Status: New Topic: 4 Type: Table 45. base year output at current exchange rates. d. $274. Econ: 116 Learning Objective: 6-3 Learning Objective: 6-4 Macro: 116 McConnell . the Producer Price Index (PPI). d.Chapter 06 #108 Topic: 7 Type: Definition 46. B. $402. Econ: 116 Learning Objective: 6-4 Macro: 116 McConnell . DI is: a. C.44. Econ: 114 Learning Objective: 6-2 Macro: 114 McConnell .

c. 240. 100. As a result: a. the accuracy of GDP will be unaffected through time. B. nominal income declined by more than personal income. 200. In the second quarter (3-month period) of 2001. d.Chapter 06 #110 Topic: 7 Type: Application of Concept 48. 300.Chapter 06 #118 Topic: 7 Type: Application of Concept 49. U. Econ: 119 Learning Objective: 6-5 Macro: 119 McConnell .S. nominal GDP increased but U. the GDP price index for that year is: a. Econ: 117 Learning Objective: 6-3 Learning Objective: 6-4 Macro: 127 McConnell .47. the price level fell by more than real GDP. Econ: 116 Learning Objective: 6-4 Macro: 116 McConnell . real GDP declined.Chapter 06 #161 Topic: 8 Type: Application of Concept . GDP will tend to increasingly overstate the level of output through time. d. We can conclude that: a. real GDP will rise more rapidly than nominal GDP. b. Assume that the size of the underground economy increases both absolutely and relatively over time. the price level rose by more than nominal GDP. GDP will tend to increasingly understate the level of output through time. B. D. c. If real GDP in a particular year is $80 billion and nominal GDP is $240 billion.S. real wages declined by more than real GDP. c.

Econ: 119 Learning Objective: 6-5 Macro: 119 McConnell . c. Environmental pollution is accounted for in: a. c. of all of the above considerations. GDP data are criticized as being inaccurate measures of economic welfare because: a.Chapter 06 #160 Topic: 8 Type: Application of Concept 51. none of the above.50. DI. . b. PI. GDP. D. they do not take into account changes in the amount of leisure. they do not take into account all changes in product quality. b. D. they do not take into account the adverse effects of economic activity on the environment.