Eco372 principles of macroeconomic week 2 macro quiz answer key

 

 

THIS IS AN INDIVIDUAL ASSIGNMENT.  It is a violation of the academic code of conduct to solicit or accept help from any outside source, including a tutor, online assistance, or any other resource.  Evidence of cheating on the quiz will be met with very dire consequences. You may use your textbook, video lessons, and class discussion.  Clearly mark your answers by changing the color of your choices, using highlighting, or bold. 

 

Section One:  Multiple Choice – select the best response; each response is worth 1 point

 

1.         Gross Domestic Product measures the:

a.         total market value of all final goods and services produced within the U.S.

            b.         total market value of all final goods and services produced by U.S. citizens.

            c.         market value of all intermediate goods plus the market value of all final goods

                        produced in the U.S.

            d.         nation’s well-being.

 

 

Use the information in the table below to answer the next three questions.

 

            Consumption Spending. . . . . .. . . . . . . . . .       6,576.0 billion

            Investment Spending     . . . . . . . . . . . . . . . .     1,589.6 billion

            Government Purchases. . . . . .  . . . . . . . . .       1,712.8 billion

            Net Exports      . . . . . . . . . . . . . . . . . . . . . .       -488.6 billion

            Depreciation     . . . . . . . . . . . . . . . . . . . . . .     1,022.3 billion

 

2.         Gross domestic product is:

            a.         $9,389.8 billion.

            b.         $9,878.4 billion.

            c.         $10,367 billion.

            d.         $8,367.5 billion.

 

3.         Net domestic product is:

            a.         $9,389.8 billion.

            b.         $9,878.4 billion.

            c.         $10,367 billion.

            d.         $8,367.5 billion.

                                   

4.         Net investment is equal to:

            a.         $7,345.2 billion.

            b.         $1,589.6 billion.

            c.         $1,022.3 billion.

            d.         $567.3 billion.

5.         If 2012 is the base year, then real GDP in 2013 is a measure of:

a.         the market value of goods and services produced in 2012, assuming no change

            in the price level between 2012 and 2013.

b.         the market value of goods and services produced in 2013, assuming no change

            in the price level between 2012 and 2013.

c.         the current market value of goods and services produced in 2012.

d.         the current market value of goods and services produced in 2013.

 

6.         Suppose expenditure on the market basket of products used for the CPI rose from $1,200 in the base year to $1,500 in the current year.  Then, the value of the CPI is _____, indicating that prices rose _____ percent from the base year to the current year.

            a.         300; 300

            b.         25; 25

            c.         125; 25

            d.         25; 125

 

7.         Inflation occurs when:

            a.         the average price level rises.

            b.         the price of a good or service rises.

            c.         consumer incomes increase.

            d.         some prices change faster than other prices.

 

8.         The purchasing power of the dollar:

            a.         is unaffected by inflation.

            b.         decreases during inflationary periods.

            c.         increases during inflationary periods.

            d.         cannot be predicted during inflationary periods.

 

Use the information in the table below to answer the next two questions.

 

                        Year                 Nominal Income           CPI                  Real Income

 

                        2000                     $40,000                  172.2               $23,228.80

                        2001                     $42,000                  177.1               $23,715.42

                        2002                     $43,000                  179.8               $23,915.46

 

9.         This person’s real income in 2002 was _______ which was __________ his/her real     income in 2001.

            a.         $23,915; greater than

            b.         $24,970; greater than

            c.         $23,915; less than

            d.         $24,970; less than

 

10.       The inflation rate from 2000 to 2001 was approximately:

            a.         1.5%.                                      

            b.         2.8%.

            c.         4.9%.                                      

            d.         1.7%.