• The expenditure approach to GDP is shown by which of the following equations?

A.

GDP = C + I - G - EX - IM

B.

GDP = C + I + G + EX - IM

C.

GDP = C + I + G + IM - EX

D.

GDP = C - I - G - EX + IM

• Mary has won $2,000 from the lottery. Mary has put her money in a saving account so that she could spend it when she goes on a trip to the Caribbean in September 2019. This is an example of money serving as a(n)

A.

medium of exchange.

B.

store of value.

C.

unit of account.

D.

investment good.

• If the MPC is 0.75, the tax multiplier is

A.

-4.

B.

-3.

C.

-2.5.

D.

-5.

• When the prices of goods and services rise

A.

the value of money rises.

B.

exports increase.

C.

the value of money falls

D.

imports decrease.

• A decrease in the overall price level is known as

A.

recession.

B.

economic growth.

C.

deflation.

D.

inflation.

• If the GDP deflator is less than 100, then

A.

prices decreased by more than half between the current and the base years.

B.

nominal GDP is lower than real GDP.

C.

nominal GDP is greater than real GDP.

D.

nominal GDP equals real GDP.

• As the MPS increases, the spending multiplier will

A.

either increase or decrease depending on the size of the change in investment.

B.

remain constant.

C.

increase.

D.

decrease.

• Suppose that you purchased a ticket to the symphony for $40 from an online ticket broker. Once you arrived at the symphony, you discovered that parking costs you an additional $10. In this situation, the additional $10 you pay for parking is an example of

A.

marginal cost.

B.

an economic loss.

C.

an inefficient cost.

D.

opportunity cost.

• An individual who cannot find a job because his or her job skills have become obsolete is an example o

A.

cyclical unemployment.

B.

seasonal unemployment.

C.

structural unemployment.

D.

frictional unemployment.

• Which of the following is an opportunity cost of attending college?

A.

the income you could have earned if you didn't attend college

B.

the cost of the food that you consume while you are attending college

C.

the education you gain from attending college

D.

the cost of your apartment or dorm