Macroeconomics Machine-graded Assessment Items Module: Macroeconomic Measures of Performance

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  are data or statistics used to judge the current or future health of the economy*
  
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  are largely collected and released by government or non-profit groups*
  
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  enable analysis of economic performance*
  
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  permit determination of business cycles*
  

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  Leading, coincident, lagging indicators*
  
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  Future, current, past indicators
  
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  Forecast, performance, resultant indicators
  

it is divided by four.

it is multiplied by four so that it can be reported at an annual rate.*

there are projections made of future trends based upon the past.

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Inflation.

falling property values.

falling number new federal unemployment claims.*

rising price for precious metals.

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6.1.0.2 The economic indicators used to determine how the economy is doing are:

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  measures of aggregate production*
  
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  measures of employment and unemployment*
  
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  measures of inflation*
  

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  GDP*
  
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  Inflation*
  
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  Dow Jones industrial average
  

consumer durables.*

business investment in capital goods.*

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The interest that you get from that loan you made*

Your income*

Your wealth

The value of your home

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Which of the following measures is a macroeconomic flow?

consumer wealth

total export sales*

total import spending*

business inventories

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The macro economy includes:

all buying and selling

all production

all consumption

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  Bureau of Employment
  
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  U.S. Department of Labor / Bureau of Labor Statistics*
  
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  US. Commerce Department
  

When a pair of jeans is sold to the end user, it:

adds to consumer spending.*

detracts from business inventories.*

represents investment.

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6.1.a.1 In the US, the Index of Leading economic Indicators is calculated and published by

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  Bureau of Employment
  
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  U.S. Department of Commerce*
  
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  US. Department of Labor / Bureau of labor Statistics
  

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  Personal Income*
  
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  Gross Domestic Product*
  
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  Home Sales*
  
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  Home Construction*
  
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  Inventories*
  
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  Business Sales*
  
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  Rental Vacancy Rates*
  
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  Home Ownership*
  
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  Unemployment Rates
  
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  Employment Rates
  
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  Tax Rates
  
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  Tariff Rates
  

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  Consumer Price Index*
  
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  Producer Price Index*
  
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  Consumer Expenditures*
  
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  Unemployment*
  
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  Employment*
  
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  National Compensation*
  
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  Wages*
  
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  Productivity*
  
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  Home Ownership
  
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  Personal Income
  
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  Rental Vacancy Rates
  

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inventory added to the warehouse.

spending on capital goods.

spending to maintain the value of existing capital goods, including housing.

spending on consumer durable goods.*

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When the amount that other nations spend on American output is less than the amount that Americans spend on foreign output,:

a trade surplus exists.

a trade deficit exists.*

net exports are positive.

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C + I + G

C + I + G + M

C + I + G + (X – M)*

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6.2.0.2 Which of the following is most likely to contribute to economic growth as measured by GDP per capita?

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  the imposition of tariffs and quotas on imported goods
  
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  increased capital formation*
  
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  rapid population growth*
  
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  an increase in marginal tax rates
  

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durable goods spending.

depreciation of fixed capital.

value added to final goods.*

purchases out of inventories.

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6.2.0.3 Final goods or services used to compute GDP refer to:

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  the sum of all wages paid to laborers.
  
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  the factors of production used to produce output.
  
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  goods and services purchased by the ultimate users.*
  
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  the value of outstanding shares of stock of manufacturing firms.
  

The purchase of your grandfather’s old car by a neighbor.

The purchase of a snow plough by the city of Minneapolis.*

The unsold additions to inventory at an appliances store.*

The purchase of a loaf of bread by a consumer*

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6.2.0.5 Two major components of the GDP in terms of value in the US are consumer goods and ____?

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  agricultural goods
  
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  durable goods
  
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  investment expenditures*
  

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durables*

business investment spending*

non-durables

exports

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  buying stocks
  
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  building bridges*
  
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  military spending
  

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Immediate satisfaction of wants.

Improving productivity.*

The production of capital goods.*

Depleting inventories.

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6.2.0.7 Which of the following is included in GDP?

The payments for a chiropractor’s services.*

Cash paid to a babysitter that is not reported to the tax authorities.

Your friend changes your brake pads for free.

The fees for legal services rendered by your lawyer.*

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Cash received from a yard sale.

eBay’s commission for selling your used iPhone.*

The university tuition paid to enroll in a course.*

The milk that is purchased by Ben & Jerry’s in order to make their ice cream.

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6.2.0.9 Which of the following is included in GDP?

Revenue from the sale of a three-year old car.

The fees charged for a stockbroker’s services.*

The tickets to a football game that were bought but never used.*

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  the value of goods produced domestically and sold abroad.
  
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  the value of intermediate goods sold during a period.*
  
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  the value of services rendered during a period.
  
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  the value of final goods and services produced, but not sold, during a period.
  

the amount spent on new factories and machinery.*

the amount spent on stocks and bonds.

the amount spent on consumer durable goods

the amount spent maintaining the nation’s stock of capital equipment*

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6.2.0.12 Fill in the blanks. GDP is a _____ measure of societal well-being, because it ________.

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  good : takes into account employment, production, and income levels
  
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  good : omits the cost of keeping the environment clean
  
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  bad : omits the cost of keeping the environment clean*
  
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  bad : takes into account employment, production, and income levels
  

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spending on public goods.*

returns to factors of production.*

spending on used goods.

income for those engaged only in the underground economy.

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6.2.0.13 Fill in the blanks. The expenditure approach to measuring GDP is the sum of _______ and the income approach captures ___________.

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  consumption, investment, government, and net exports : personal disposable income, rent, interest, and profit
  
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  wages, rent, interest, and profit : consumption, investment, government, and net exports
  
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  consumption, investment, government, and net exports : wages, rent, interest, and profit*
  

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6.2.0.14 A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle (in sequential order) are:

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  trough, peak, expansion, recession
  
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  contraction, recession, expansion, boom
  
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  expansion, peak, recession, trough*
  

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spending on the American economy is greater than what it can produce.

spending by American households, businesses, and government is greater than GDP.*

spending on the American economy is less that what it can produce.

imports are greater than exports.*

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6.2.a.0 Explain the expenditure approach to calculating GDP

Short Title: Expenditure Approach to Calculating GDP
6.2.a.1 When calculating the GDP using the expenditure approach, what must happen to exports of a nation?

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  They must be ignored, because they are not bought in the domestic market.
  
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  They must be added to the other components of GDP.*
  
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  They must be subtracted, because they are included in the consumption of a foreign country.
  
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  They must be subtracted if foreign firms buy the exports for investment purposes.
  

purchases of consumer durables.*

savings.

government transfer payments.

government purchases of labor, goods, and services.*

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6.2.a.2 Which of the following would be included in the computation of GDP in a particular year?

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  Government expenditure on public schools*
  
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  Social security payments to retirees
  
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  An increase in inventories*
  

Spending on capital goods*

Tax payments

Foreign spending on American output*

Purchases of public goods and services*

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Which of the following components of GDP has the largest immediate impact on GDP. Changes in

1. government spending

1. consumption spending*

1. business investment

1. services provision

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  Durable goods
  
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  Services*
  
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  Nondurable goods
  
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  Structures
  

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durable goods

services*

nondurable goods

structures

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6.2.b.2 The labor component of the national income approach to calculating GDP includes:

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  Salaries*
  
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  Wages*
  
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  Health benefits*
  
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  Retirement benefits*
  
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  Unemployment Insurance*
  
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  Hours worked
  
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  Productivity
  
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  Per capital labor data
  

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financial investment always involves the creation of new capital.

financial investment involves risk; private investment does not.

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6.2.b.3 Proponents of supply side approaches to economic growth will likely make the following statements?

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  Tax reductions for consumers allow them to spend and save more, thereby increasing business investment.
  
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  Favorable taxes for innovations by business owners decrease worker productivity and elevate citizen reliance on government support.
  
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  Tax breaks to businesses increase employment and the production of more goods and services. Newly hired workers earn high incomes, and increase spending thereby benefitting other workers.*
  
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  Government spending translates into higher levels of employment, production, incomes, and spending.
  

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domestic

export

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6.3.0.0 Describe the relationships among GDP, net domestic product, national income, personal income, and disposable income

Short Title: GDP and Income
6.3.0.1 Which of the following best describes economic growth?

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  An increase in real personal income*
  
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  A reduction in real personal income
  
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  A decrease in real GDP over time
  
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  An increase in nominal GDP over time
  

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  Consumption and savings*
  
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  Income minus net taxes*
  
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  Entertainment, spending, and consumption
  
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  Credit card debt service and housing
  

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add income receipts from rest of the world.*

add income payments to the rest of world.
subtract income payments to rest of the world.*

subtract depreciation.*

add depreciation.

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6.3.0.3 If depreciation equals $36 billion, GDP equals $240 billion, and national income is $225 billion, then what is the Net National Product?

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  $204 billion*
  
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  $189 billion
  
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  $276 billion
  
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  $361 billion
  

$80 million on maintenance and also purchase a new ship.

$80 million on maintenance, but will not add to its capital stock.

less than $80 million on maintenance, perhaps deactivating some ships.*

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