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Macroeconomics 1

Total questions: 70

Worksheet time: 57mins

Name
Class
Date
1.
Which is a final product in a bakery?
a)
Cake
b)
Flour
c)
Eggs
d)
Sugar
2.
Cars, TVs, computers belong in which part of the GDP formula?
GDP = C+I+G+(X-M)
a)
Consumption Expenditures
b)
Investment Expenditures
c)
Government Expenditures
d)
Net Imports
3.
An airline buying a plane belong in which part of the GDP formula?
GDP = C+I+G+(X-M)
a)
Consumption Expenditures
b)
Investment Expenditures
c)
Government Expenditures
d)
Net Imports
4.
Tanks and roads belong in which part of the GDP formula?
GDP = C+I+G+(X-M)
a)
Consumption Expenditures
b)
Investment Expenditures
c)
Government Expenditures
d)
Net Imports
5.
What does X represent in calculating net imports?
X-M
a)
Imports
b)
Exports
c)
Expenditures
d)
None of the Above
6.
What does M represent in calculating net imports?
X-M
a)
Imports
b)
Exports
c)
Taxes
d)
None of the Above
7.

The U.S. Government hired 10 Chinese-language experts, from a Chinese company based in China, to train U.S. Workers.

a)

GDP increases

b)

GDP decreases

c)

No change

8.
What type of GDP is calculated with the current year's prices?
a)
Nominal GDP
b)
Real GDP
c)
GDP per capita
9.

Expectant parents buy supplies for the nursery. Would this be included in GDP?

a)

Yes - Consumer Spending

b)

Yes - Investment

c)

No - Intermediate goods

d)

No - Non-market activity

10.

The trade in exotic animals being illegally sold as pets is a multi-billion-dollar-a-year industry. Is this included in GDP?

a)

Yes - Consumer spending

b)

Yes - Government Spending

c)

No - Underground Economy

d)

No - Non-market activity

11.
GDP is calculated by
a)
adding up the cost of goods used in producing the item
b)
subtracting all costs from total revenue
c)
adding consumption + investment +government spending+ (exports sold - imports bought)
12.
What does Per Capita Mean?
a)
Per Household
b)
Per Object
c)
Per Worker
d)
Per Person
13.

GDP per capita is found by dividing a country's GDP by it's

a)

population.

b)

average birth rates.

c)

number of households.

14.

A higher GDP generally correlates to a(n) ___________ standard of living.

a)

higher

b)

lower

c)

unrelated

15.

To be certain that a country is producing more from year to year, economists look to see that ________________ has _________________.

a)

GDP; decreased

b)

GDP; increased

c)

Real GDP; decreased

d)

Real GDP; increased

16.

Is this counted in the GDP of the US?

Cars made by a Japanese company in California.

a)

Yes

b)

No

17.

Is this counted in the GDP of the US?

Cars made by a US company in South Korea.

a)

Yes

b)

No

18.

Is this counted in the GDP of the US?

A new home that was recently built.

a)

Yes

b)

No

19.

Is this counted in the GDP of the US?

A farmer's purchase of a new tractor.

a)

Yes

b)

No

20.

In which part of the GDP calculation does this fit?

You spend $15 at AMC to see the latest Avengers movie.

a)

Consumer spending

b)

Government spending

c)

Investment spending

d)

Net exports

21.

In which part of the GDP calculation does this fit?

The local taxi service purchases new vehicles for the

company.

a)

Consumer spending

b)

Government spending

c)

Investment spending

d)

Net exports

22.
High levels of GDP per capita indicate...
a)
Higher levels of happiness 
b)
Higher standard of living
c)
Equal levels of wealth 
d)
Self-sufficient communities
23.
How does investment in capital goods by companies help a country increase its GDP?
a)
The GDP of a country goes down when companies make more money
b)
Companies that invest in capital goods are able to provide a better place for their workers to work
c)
Highly trained workers help the company be more profitable by finding ways to help the company work better.
d)
When a company invests in capital, it can produce more goods at a better price and increase the profit that it makes.
24.
Which is an example of investment in human capital?
a)
trucks
b)
factories
c)
education
d)
highways
25.
Mark always changes his own oil.  Is this effort counted in GDP?
a)
No - Black Market
b)
No - Non-market Activity
c)
No - Unreported Income
d)
No - Purely financial transaction 
26.
The Income Approach of Calculating GDP includes...
a)
All spending on final products in the year.
b)
All Income made from selling all final goods.
c)
All costs on all products.
d)
The ammount of people involved in production.
27.

North Face is a popular U.S. brand of adventure equipment, clothing, and accessories. Most of its apparel is produced in China. In which category would the value of these items appear?

a)

US GDP

b)

China's GDP

c)

U.S GNP

d)

In both U.S. GNP and China GDP

28.

The expenditures approach to calculating GDP uses the following equation:

a)

C + N + X = Y

b)

C + N + X = GDP

c)

C + I + G + NX = Y

d)

C + I + G + X = Y

29.

American consumers spend more of their money on

a)

durable goods

b)

non-durable goods

c)

services

30.

What is GDP?

a)

Gross Domestic Product

b)

Get Duties Prior

c)

Gross Department Power

d)

Gross Duties Peer

31.

A general rule of thumb says that a country has experienced a recession if:

a)

Real GDP has declined.

b)

GDP has declined.

c)

Nominal GDP has declined for at least two consecutive quarters.

d)

Real GDP has declined for at least two consecutive quarters.

32.

GDP measures the:

a)

Total market value of intermediate goods and services produced by the citizens of a country in a given year.

b)

Total market value of all final goods and services produced in an economy in a given year.

c)

Change in total employment at U.S. owned firms over the course of a given year.

d)

Change in production levels at U.S. owned firms measured quarterly.

33.

Which of the following is likely the best indicator of economic health?

a)

Real GDP is $18 trillion.

b)

Real GDP grew by 3 percent this year.

c)

Nominal GDP is $18 trillion.

d)

Nominal GDP grew by 3 percent this year.

34.

Real GDP is:

a)

GDP adjusted for changes in output.

b)

Nominal GDP adjusted for inflation.

c)

GDP adjusted for standard of living.

d)

Nominal GDP adjusted for population.

35.

Which of the following would not be counted in GDP?

a)

A widget produced in Missouri by a Canadian company.

b)

A widget produced in Germany by a U.S. company.

c)

A widget produced in Arkansas by a Chinese company.

d)

A widget produced in Tennessee by a U.S. company.

36.

Which causes United States GDP to increase?

a)

Japan buys government securities.

b)

The United States sells more goods to Japan.

c)

Japan sells Japanese securities to the U.S.

d)

The United States buys more Japanese goods.

37.

According to the CIA World Factbook, the GDP of the United States is approximately

a)

$47 billion

b)

$3 trillion

c)

$8 trillion

d)

$19 trillion

e)

$27 trillion

38.

According to the CIA World Factbook, which of the following nations have a GDP exceeding the United States?

a)

Spain

b)

Turkey

c)

Italy

d)

Mexico

e)

None of the above

39.
Which is NOT included in Gross Domestic Product (GDP) as a measure of the economy?
a)
Final goods and services
b)
Work done at home such as house renovations
c)
Dollars
d)
Government spending
40.
How do we measure economic growth?
a)
Increases in the price level, as indicated by the GDP chain price index
b)
Increases in fictional GDP
c)
Increases in real GDP
d)
Increases in the labor force
41.

In the GDP equation, what does the 'I' stand for?

a)

Intelligent spending

b)

Investor spending

c)

Incredible spending

d)

Investment spending

42.

The study of large-scale economic factors dealing with the economy of a nation, region, or of the world as a whole is called:

a)

Microeconomics

b)

Macroeconomics

c)

GDP

d)

Supply & demand

43.

No single economic measure is sufficient to diagnose the health of an economy:

a)

True

b)

False

44.

The GDP of the United States is the __________ in the entire world at ~$19.4 trillion.

a)

highest

b)

lowest

c)

dumbest

d)

best smelling

45.
Which of the following would NOT increase a nation’s Potential GDP?
a)
A better educated and trained labor force
b)
The discovery of new natural resources
c)
A plague that reduces the population
d)
Investment in capital resources
46.
If Real GDP is $300 million and the population is 10 million, what is the Real GDP per capita?
a)
$3,000 
b)
$300 
c)
$30 
d)
$5 
47.
Lauren coaches softball and gets paid in cash each week.  Is this included in GDP?
a)
Yes - Consumer Spending
b)
Yes - Investment 
c)
No - Underground Economy
d)
No - Purely financial transaction 
48.

select all of the following that are excluded from GDP.

a)

non-market goods and services

b)

used goods

c)

environmental quality

d)

final goods and services

49.

If US exports = 100$ and US imports = 200$, then Net Exports =

a)

100$

b)

300$

c)

-100$

d)

-300$

50.
Which of the following goods is included in GDP?
a)
Dresses
b)
Screws used in a cruise missile
c)
Flour for making bread
d)
Cloth for making dresses
51.

The Nation of Nardrupia has a very high GDP. If that is the case, which of the following concerning life in the country is true?

a)

People have a great standard of living.

b)

Everyone in the country is wealthy.

c)

The country has a market economy.

d)

A high GDP tells you nothing about life in the country.

52.

Has a GDP Per Capita of $59,800

a)

Canada

b)

United States

53.
Why doesn't GDP count intermediate goods?
a)
the intermediate value may have different stages
b)
intermediate value cannot be calculated
c)
intermediate value is calculated into GNP
d)
intermediate value is included in the value of the final good
54.
The Expenditures Approach of Calculating GDP includes...
a)
All spending on final products in the year.
b)
All Income made from selling all final goods.
c)
All costs on all products.
d)
The ammount of people involved in production.
55.
What type of economy is the USA?
a)
Market
b)
Command
c)
Mixed
56.
What type of economy is North Korea?
a)
Command
b)
Mixed
c)
Market
57.
Represents business activity conducted without the knowledge of the government.
a)
under economy
b)
underground economy
c)
red economy
d)
hidden economy
58.
workers of a business or country including their education, training, skills, and health
a)
physical capital
b)
GDP
c)
human capital
d)
opportunity cost
59.
Which of the following would not affect the size of real GDP?
a)
Consumer purchase of a new car for personal use.
b)
Government purchase of a new car for the military
c)
Consumer purchase of a rare renaissance painting. 
d)
Business purchase of a new car for a delivery vehicle.
60.
In a typical circular flow model describing the interaction of businesses and households, which of the following is/are true?
I. Households buy factors of production and goods
II. Firms buy factors of production and goods
III. Households buy factors of production
IV. Firms buy factors of production
V. Firms buy goods VI. Households buy goods
a)
I only
b)
II only
c)
III and IV only
d)
IV and VI only
61.

Using the following figures, please find GDP. C = 11.2 billion I = 2.5 billion G = 3.1 billion X = 2.2 billion M = 2.7 billion.

a)

$16.8 billion

b)

$15.8 billion

c)

$21.7 billion

d)

$16.3 billion

62.
The expenditure approach to measuring GDP is done by using data on only
a)
consumption expenditure and investment.
b)
consumption expenditure, investment, government expenditures on goods and services, and net exports of goods and services.
c)
consumption expenditure, investment, and government expenditures.
d)
wages, rent, interest, and profit.
63.

A macroeconomist would study...

a)

Economic growth, price stability, and full employment in a country

b)

a single product

c)

the buying decisions of a single individual.

d)

dating tips to increase happiness

64.

The business cycle is

a)

a bicycle ridden by an economist.

b)

a regular and predictable pattern of economic activity.

c)

the alternating increases and decreases in economic activity.

d)

not a problem in modern, regulated economies.

65.
 Governments use tax revenue from individuals and businesses to provide —
a)
profits to buy more resources
b)
income to purchase products
c)
for business expansion and increased consumption
d)
public goods and services
66.
If Y = 200, C =100, I =30, G=40 and M =30, what is the value of exports?
a)
60
b)
40
c)
90
d)
50
67.
If consumption spending totals $40 million, investment is $30 million, tax revenue totals $15 million, government spending is $10 million, exports are $3 million and imports are $5 million, GDP is...
a)
$103 million
b)
$80 million
c)
$93 million
d)
$78 million
68.

A period of economic growth is called

a)

trough

b)

stagflation

c)

expansion

d)

business cycle

69.
Illegal goods and services that are produced are...
a)
included as an estimate in GDP
b)
included in GDP when the authorities can prove the amount
c)
included in the consumption category of GDP
d)
not counted in GDP
70.

Why is it beneficial for a country to have an abundance of natural resources?

a)

countries that have a lot of natural resources are able to use them to produce goods and services cheaper than a country that has to import them. Therefore, a country with a lot of natural resources usually has a greater GDP than a country with little natural resources.

b)

countries with a lot of natural resources are usually taken over by other countries and don't have to worry about paying for anything

c)

they cannot become communist

d)

there is no advantage since most natural resources are worthless

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