Macro Midterm

Macro Midterm - ECN 222- Macroeconomics Midterm Multiple...

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ECN 222- Macroeconomics Midterm Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Gross Domestic Product is equal to the market value of all final goods and services a. manufactured and sold oversees during a period. b. produced domestically during a period. c. produced by the citizens of all nations during a period. d. produced domestically during a period minus the depreciation of productive assets. ____ 2. GDP during a period can be calculated by summing either a. the purchases of domestically produced final goods and services or the cost incurred in the production of those goods. b. the amount received by business firms for consumer goods and service or the spending of business firms on investment goods and services. c. all household expenditures on final goods and services or all business purchases of factors of production. d. sales of goods and services to foreigners or the purchase of goods and services from for- eigners ____ 3. A price index is designed to measure a. changes in the general level of employment across time periods. b. changes in the quantity of output produced across time periods. c. the market value of output produced during the current period with the value of output produced during an earlier time period. d. the cost of purchasing a market basket of goods at a point in time relative to the cost of purchasing the identical market basket during an earlier reference period. e. Both b and c are true. ____ 4. An increase in the Consumer Price Index indicates that a. the real income of households is increasing. b. the purchasing power of the dollar is increasing. c. the cost of purchasing the typical bundle of goods consumed by households is increasing. d. the cost of purchasing the typical bundle of goods purchased by consumers is increasing. e. Both c and d are correct. ____ 5. In contrast with nominal GDP, real GDP refers to nominal GDP
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a. minus exports. b. minus personal income taxes. c. corrected for price changes. d. corrected for depreciation. ____ 6. Over time, GDP may increase as the result of either (i) expansion in the quantities of goods produced or (ii) high- er prices. Which of the following is true? a. (i.) will generally increase living standards, but (ii) will not. b. (ii) will generally increase living standards, but (i) will not. c. Both (i) and (ii) will generally increase living standards. d. Neither (i) nor (ii) will generally increase living standards. ____ 7. The consumer price index (CPI) is calculated a. using a fixed basket of goods and therefore will tend to understate inflation. b. using a fixed basket of goods and therefore will tend to overstate inflation. c.
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Macro Midterm - ECN 222- Macroeconomics Midterm Multiple...

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