1.Macroeconomics is primarily concerned with: A.the individual markets within an economy, such as the lobster industry in Maine. B.the behavior and health of a nation's economy as a whole. C.the behavior and health of the entire world's economy as a whole. D.why businesses fail.

2. Macroeconomics is concerned with the measurement and behavior of three aggregates. Which of the following is not one of the three aggregates? A. profit B. employment C. price level D. production

3. Which set of prominent economic thinkers contains A) the economist who wrote The Wealth of Nations and B) the economist who is considered the father or modern macroeconomics and wrote a book titled The General Theory in the 1930s, respectively?

A. Smith, Keynes B. Freidman, Keynes C. Smith, Freidman D. Marx, Keynes

4.Gross Domestic Product (GDP) is: A.the monetary value of all goods and services (final, intermediate, and non-market) produced in a given year. B.total resource income less taxes, saving, and spending on exports. C.the economic value of all economic resources used in the production of a year's output, less depreciation. D.the market (monetary) value of all final goods and services produced within a nation in a specific year.

Answer question 5 using the following data for Nation K which produces 3 final goods: Cars, Computers, and Shirts.

Good Units Produced Price/unit

Cars 4,000 $20,000

Computers 3,000 $1,000

Shirts 100,000 $20

5.GDP for Nation K is: A. $85,000,000 B. $56,000 C. $6,400,000 D. $21,020

6.Which of the following is a final good (or service)? A. a new Harley Davidson motorcycle purchased by a recent college graduate B.steel purchased by a wind turbine manufacturer C.motorcycle tires purchased by the Harley Davidson company for use in a new motorcycle D.cotton purchased by a sweater manufacturer

7.GDP in an economy is $12,000 billion. Personal consumption (consumer) expenditures are $7,000 billion, government purchases are $3,000 billion, and gross investment is $1,500 billion. Net exports are therefore: A.+ $500 billion B.- $500 billion C.+ $1,000 billion D.-$1,000 billion

8.In national income accounting, personal consumption expenditures include purchases of: A.new residential construction (houses) B.social capital like new interstate highways C.purchases of new machinery by business D.durable goods, like a new kitchen stove

9.Which would be considered an investment according to economists? A.A software company buys Google shares of stock

B. A software company buys new servers and computers for its headquarters in Silicon Valley, CA C.A software company buys a holiday dinner for its employees D.A software company hires a new programmer.

10.Suppose that inventories were $130 billion in 2010 and $100 billion in 2011. In 2011, government accountants would: A.add $60 billion to other elements of investment in calculating total investment. B.subtract $30 billion from other elements of investments in calculating total investment. C.add $30 billion to other elements of investment in calculating total investment. D.subtract $130 billion from other elements of investment in calculating total investment.

11.Using the expenditure approach, GDP is equal to: A.C - I + G - X_n. B.C + I + G - M. C.C + I + G + X_n. D.C + I - G - X_n.

12.Government expenditures include government spending on goods and services (like ammunition for the military and salaries for Federal judges) and ____________________. A.private capital goods like paper making machines. B.social capital goods like new court houses. C.transfer payments like unemployment insurance payments. D.used private capital goods like used paper machines.

13.Which of the following is an example of a transfer payment? A.$3,000 in food stamp assistance received by a low income family from the U.S. Government. B.$500,000 paid by a local government to a paving company for paving a road C.$6,000 paid by a state government to an oil company for fuel oil

D.$4,200 paid by a state government agency to a company that provides it with 10 tons of road salt

14.Consider the calculation of the U.S. GDP. The value of U.S. imports is: A.added to exports when calculating GDP because imports reflect spending by Americans. B.subtracted from exports when calculating GDP because imports do not constitute spending by Americans. C.subtracted from exports when calculating GDP because imports do not constitute production in the United States. D.added when calculating GDP because imports do not constitute production in the United States.

15.In given year, if depreciation (capital consumption allowance) is less than gross investment: A.the economy's stock of capital may be either growing or shrinking. B.the economy's stock of capital is shrinking. C.the economy's stock of capital is growing.

Answer question 16 & 17 using selected national income data values below for an economy. All figures are in billions of dollars. Consumption of Fixed Capital $25 Government Purchases 315 US Imports 260 Personal Taxes 45 Transfer Payments 247 US Exports 249 Personal Consumption Expenditures 475 Net Foreign Factor Income 5 Gross Private Domestic Investment 300 Taxes on Production and Imports 245 Undistributed Corporate Profits 60 Social Security Contributions 240 Corporate Income Taxes 65 Statistical Discrepancy 40 16. Refer to the above data. Gross domestic product is: A. $1,049 billion B. $1,079 billion C. $1,090 billion D. $1,101 billion 17. Refer to the above data. Net domestic product is: A. $1,039 billion B. $1,044 billion C. $1,054 billion D. $1,076 billionNominal GDP Real GDP Nominal and Real GDP ($) 2000 Time 23. Which of the following statements is correct on the basis of the diagram above? A. Nominal GDP must be deflated (adjusted downward) in each year before 2000 to determine RGDP B. Real GDP is greater than nominal GDP in the year 2000. C. Inflation in each year after 2000 was greater than 0%. D. The year 2000 is not the base year.Use the following table for a hypothetical single-product economy for questions 25 - 27. Price Price Units of of bagel index Year Output per unit (year 1 = 100) 1 10 $10 100 12 20 200 15 30 300 a W 20 40 400 25. Refer to the above data. Real GDP in year 1 is: A. $200 B. $150 C. $120 D. $100 26. Refer to the above data. Real GDP in year 2 is: A. $200. B. $150. C. $120 D. $100. 27. Refer to your answers for 25 & 26. The rate of RGDP growth between year 1 and year 2 is: A. 10%. B. 20%. C. 30%. D. 40%.Use the following descriptions of the four phases of the business cycle to answer questions 37- 40. A: High unemployment, low prices, littleo investment & bank lending, low/zero profits, little consumer/business optimism B: Rising prices, profits improving, increased consumer & business optimism, more investment & bank lending, falling unemployment, rising RGDP C: Falling prices (deflation), rising unemployment, falling profits, reduced investment & less bank lending, increased pessimism by consumers and business, declining RGDP D: High prices (inflation), little unemployment, high profits but profit margins declining, speculation (sometimes) 37. The recessionary phase of the business cycle is described by description A. A B. B C. C D. D 38. The expansionary phase of the business cycle is described by description A. A B. B C. C D. D 39. The peak phase of the business cycle is described by description A. A B. B C. C D. D 40. The trough phase of the business cycle is described by description A. A B. B C. C D. DAnswer questions 42-44 on the basis of the following information about the hypothetical nation of Lina. All figures are in millions. -Total Population 480 -Persons under 16 years old 120 -Institutional population ( Prisons, hospitals, etc. ) 10 -Discouraged Workers 14 -Full-Time Students > 16 8 -Retired Persons 48 -Persons over age 16 actively seeking work and available for employment but not employed 28 42. Refer to the above information. The labor force in Lina is: A. 280 million B. 360 million. C. 260 million. D. 305 million 43. Refer to the above information. The number of unemployed persons in the labor force is: A. 100 million B. 26 million C. 260 million D. 28 million 44. Refer to the above information. The unemployment rate in Lina is about: A. 26.0 percent. B. 5.7 percent. C. 8.3 percent D. 10.0 percent.67. Figure A Figure B Price Price D1 Di Quantity Quantity Refer to the above figures. As the economy moves from the short run to the very long run, we would expect: A. the representation of the economy to move from Figure A to Figure B. B. the representation of the economy to move from Figure B to Figure A. C. demand shocks to be eliminated. D. the economy to gravitate to P1