The total value of all final goods and services produced in the economy during a given year, measured in current dollars, is

Question 1 options:

aggregate demand

economic growth

gross domestic product

net national income

gross national product

Which one of the following would be counted in the US gross domestic product?

Question 2 options:

a book produced by a U.S.-owned company in London, England

a book produced by a U.S.-owned company in Halifax, Nova Scotia, Canada

a book produced by a Canadian-owned company in Davenport, Iowa

an American doctor providing health care to the elderly in Paris, France

a Japanese doctor providing health care to the elderly in Tokyo, Japan

Gross domestic product (GDP)

Question 3 options:

increases only if output of goods and services increase

increases only if prices increase because the goods and services are measured in current prices

increases with either an increase in prices or an increase in output, or a combination of both

increases only if either prices increase or output increases, but not a combination of both

always increases

Consider Country Timbuktu whose economy produces only three items: Tomatoes, Tofu and Tacos. The base year is arbitrarily chosen as 2004.

Good Quantity (2004) Price 2004 Quantity 2005 Price 2005

Tomatoes 1000 1.00 1200 1.50

Tofu 2000 3.00 1800 4.00

Tacos 600 5.00 500 6.00

What is the percentage change in real GDP from 2004 to 2005?

23%

-9%

none of the above

2%

-15%

John buys a used car for $5,400 and spends $600 on new parts, made in the U.S., to fix the car. The end result of these two transactions is

Question 5 options:

U.S. consumption purchases increase by $6,000 and U.S. GDP increases by $6,000.

U.S. consumption purchases increase by $5,400 and U.S. GDP increases by $5,400.

U.S. consumption purchases increase by $600 and U.S. GDP increases by $600.

U.S. consumption purchases increase by $600 and U.S. GDP increases by $6,000.

Goods used up to produce other goods are known as

Question 6 options:

nondurable goods

intermediate goods

services

transitional goods

durable goods

Which of the following transactions would be included in GDP for 2011?

Question 7 options:

Bonita purchases a brand new 2011 Honda Civic car on March 10, 2011.

Daniel buys a used desk from Craigslist.com on May 9, 2011.

On January 5, 2011, Maya sold 100 shares of stock in IBM Corporation.

Levi purchases a 75-year-old penthouse on Lake Shore Drive in Chicago, Illinois, on June 23, 2011.

ersonal consumption expenditures include

Question 8 options:

all goods that business firms buy

the purchase prices paid for stocks and bonds by individual households

all goods and services bought by households

the corrected value of housewives' services

the construction of residential housing

The best example of a nondurable good is

Question 9 options:

a television

a pair of childrens shoes

carpeting

a washing machine

The best example of a durable good is

Question 10 options:

food

clothing

cup of coffee

pizza

gasoline

Last month 2,000 people decided to quit their jobs in order to seek better employment opportunities. These people are

Question 12 options:

frictionally employed

frictionally unemployed

cyclically unemployed

structurally unemployed

discouraged workers

Cyclical unemployment

Question 13 options:

occurs because of downturns (recessions) in the business cycle

is a matter of not seriously trying to find a job

occurs because of technological innovations in production

only occurs with a zero inflation rate

recurs over and over among certain people in the economy

Unemployment that occurs from fundamental technological changes in production, or from the substitution of new goods for customary ones, is known as

Question 14 options:

structural unemployment

structuralemployment

seasonalunemployment

frictional unemployment

underemployment