Macroeconomics Policy and Practice 2nd Edition Mishkin Test Bank

Macroeconomics Policy and Practice

2nd Edition Mishkin Test Bank
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ishkin-test-bank/

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Macroeconomics Policy and Practice 2nd Edition Mishkin Test Bank

Macroeconomics: Policy and Practice, 2e (Mishkin)

Chapter 2 Measuring Macroeconomic Data

2.1 Measuring Economic Activity: National Income Accounting

1) The fundamental identity of national income accounting implies ________.

A) Expenditure = Production + Income
B) Expenditure = Production = Income
C) Income = Expenditure - Production
D) Income = Expenditure / Production
E) None of the above
Answer: B
Topic: 2.1 Measuring Economic Activity: National Income Accounting

2) Who helps calculate GDP in the United States?

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
Answer: D
Topic: 2.1 Measuring Economic Activity: National Income Accounting

3) Which government entity calculates GDP in the United States on a quarterly basis?
A) the Treasury Department
B) the Commerce Department
C) the Federal Reserve
D) all of the above
E) none of the above
Answer: B
Topic: 2.1 Measuring Economic Activity: National Income Accounting

4) The statistic most often used by economists to measure the value of economic activity is
________.
A) GDP
B) the CPI
C) labor-force participation rate
D) the nominal interest rate
E) the real interest rate
Answer: A
Topic: 2.1 Measuring Economic Activity: National Income Accounting

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2.2 Measuring GDP: The Production Approach

1) The production approach to measuring GDP requires ________.

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
Answer: A
Topic: 2.2 Measuring GDP: The Production Approach
AACSB: Reflective Thinking

2) Which of the following is typically not counted in GDP?

A) any nonmarket good and services
B) income generated from apartment rentals
C) illegal drug sales
D) all of the above
E) none of the above
Answer: C
Topic: 2.2 Measuring GDP: The Production Approach

3) The reason only newly produced goods and services are counted in GDP is that ________.
A) it is very difficult to impute a value to used goods
B) most expenditures on used goods and services take place outside the market
C) it does not help economists make better economic predictions because second-hand goods
rarely have any residual value
D) it allows economists to avoid double counting the production of goods and services
E) none of the above
Answer: D
Topic: 2.2 Measuring GDP: The Production Approach
AACSB: Analytical Thinking

4) To avoid double counting in the calculation of GDP, which types of goods are typically
excluded from the calculation?
A) intermediate goods
B) capital goods
C) inventory goods
D) nonmarket goods
E) value-added goods
Answer: A
Topic: 2.2 Measuring GDP: The Production Approach

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Copyright © 2015 Pearson Education, Inc.
5) Capital goods are typically purchased to ________. They get included in GDP ________.
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
Answer: D
Topic: 2.2 Measuring GDP: The Production Approach
AACSB: Analytical Thinking

6) The difference between inventories and inventory investment is that typically ________.
A) the first one is a stock of unfinished or unsold goods; the second one is a flow that indicates
productive activity
B) the first one denotes the change in holdings of capital; the second one includes most final
goods
C) the first one is measured at the beginning of the year; the second one is measured at the end of
the year
D) all of the above
E) none of the above
Answer: A
Topic: 2.2 Measuring GDP: The Production Approach
AACSB: Analytical Thinking

7) In a two-good economy, the price of video games is $40 and the price of energy drinks is $2.
If the annual output of this economy is 100 video games and 500 drinks, the GDP is ________.
A) $50,080
B) $25,200
C) $5,000
D) $20,200
E) none of the above
Answer: C
Topic: 2.2 Measuring GDP: The Production Approach
AACSB: Analytical Thinking

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