AP ECON AP Macro CH 24 QUIZ IV

Transcription

1 AP ECON AP Macro CH 24 QUIZ IV Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Suppose Smith pays $100 to Jones. A) We need more information to determine whether GDP has changed. B) We can say with certainty that the GDP has increased, but we cannot determine the amount. C) We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased. D) We can say with certainty that the GDP has increased by $100. 2) Answer the question on the basis of the following data. All figures are in billions of dollars. 1) 2) The economy characterized by the data is: A) in a depression because personal income exceeds disposable income. B) experiencing expanding production capacity because net private domestic investment is positive. C) experiencing declining production capacity because net investment is negative. D) experiencing inflation because disposable income exceeds personal income. 3) Which of the following is an intermediate good? A) The purchase of a pizza by a college student. B) The purchase of gasoline for a ski trip to Colorado. C) The purchase of baseball uniforms by a professional baseball team. D) The purchase of jogging shoes by a professor. 3) 1

2 4) Which of the following best defines disposable income? A) The market value of the annual output net of consumption of fixed capital. B) Income received by households less personal taxes. C) All income earned by resource suppliers for their current contributions to production. D) The before-tax income received by households. 5) Answer the question on the basis of the following information: 4) 5) The economy above has experienced a: A) rising real GDP. B) rising price level. C) declining nominal GDP. D) declining real GDP. 6) Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete. It sells 10,000 cubic yards of concrete at $30 a cubic yard. The value added by Setup Corporation is: A) $200,000. B) $300,000. C) zero dollars. D) $100,000. 7) Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories fell by $10 billion. GDP in year 2 is: A) $180 billion. B) $200 billion. C) $210 billion. D) $190 billion. 8) Suppose a nation's 2010 nominal GDP was $972 billion and the general price index was 90. To make the 2010 GDP comparable with the base year GDP, the 2010 GDP must be: A) deflated to $896 billion. B) deflated to $1,080 billion. C) inflated to $1,080 billion. D) deflated to $678 billion. 9) Environmental pollution is accounted for in: A) GDP. B) DI. C) PI. D) none of these. 6) 7) 8) 9) 2

3 10) Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the question on the basis of these data. 10) Refer to the data. If year 2 is chosen as the base year, the price index for year 1 is: A) 80. B) 100. C) 20. D) ) Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are as follows. Answer the question on the basis of these data. 11) Refer to the data. If year 3 is chosen as the base year, the price index for year 1 is: A) 167. B) 140. C) 40. D) ) A large underground economy results in an: A) understated GDP price index. B) overstated GDP price index. C) understated GDP. D) overstated GDP. 13) In the second quarter (three-month period) of 2001, U.S. nominal GDP increased but U.S. real GDP declined. We can conclude that: A) nominal income declined by more than personal income. B) real wages declined by more than real GDP. C) the price level rose by more than nominal GDP. D) the price level fell by more than real GDP. 12) 13) 3

4 14) Answer the question on the basis of the following data. All figures are in billions of dollars. 14) Refer to the data. PI is: A) $314. B) $408. C) $437. D) $ ) Use the following table for a hypothetical single-product economy. 15) Refer to the data. Nominal GDP in year 4 is: A) $800. B) $450. C) $320. D) $225. 4

5 Answer Key Testname: AP MACRO CH ) A 2) C 3) C 4) B 5) A 6) A 7) D 8) C 9) D 10) B 11) D 12) C 13) C 14) A 15) A 5