macro hw 4 - hw4 Multiple Choice Identify the choice that...

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hw4 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Which of the following statistics is usually regarded as the best single measure of a society’s economic well- being? a. the unemployment rate b. the inflation rate c. gross domestic product d. the trade deficit 2. For an economy as a whole, a. income is greater than expenditure b. expenditure is greater than income. c. income is equal to expenditure. d. GDP measures income more precisely than it measures expenditure. 3. In a simple circular-flow diagram total income and total expenditure are a. never equal because total income always exceeds total expenditure. b. seldom equal because of the ongoing changes in an economy’s unemployment rate. c. equal only when one dollar is spent on goods for every dollar that is spent on services. d. always equal because every transaction has a buyer and a seller. 4. GDP is defined as a. the market value of all goods and services produced within a country in a given period of time. b. the market value of all goods and services produced by the citizens of a country, regardless of where they are living in a given period of time. c. the market value of all final goods and services produced within a country in a given period of time. d. the market value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time. 5. In computing GDP, market prices are used to value final goods and services because a. market prices reflect the values of goods and services. b. market prices do not change much over time, so it is easy to make comparisons between years. c. if market prices are out of line with how people value goods, the government sets price ceilings and price floors. d. None of the above is correct; market prices are not used in computing GDP. 6. Which of the following is not included in GDP? a. unpaid cleaning and maintenance of houses b. services such as those provided by lawyers and hair stylists c. the estimated rental value of owner-occupied housing d. production of foreign citizens living in the United States 7. Which of the following transactions adds to U.S. GDP for 2006? a. In 2006, Ashley sells a car that she bought in 2002 to William for $5,000. b. An American management consultant works in Mexico during the summer of 2006 and earns the equivalent of $30,000 during that time. c. When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2006 and they bought a house that, according to reliable estimates, could be rented for $1,600 per month. d. None of the above transactions adds to GDP for 2006. 8. The value of the housing services provided by the economy's owner-occupied houses is
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This note was uploaded on 04/02/2008 for the course ECONOMICS 103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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macro hw 4 - hw4 Multiple Choice Identify the choice that...

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