REAL GROSS DOMESTIC PRODUCT

20 Jul REAL GROSS DOMESTIC PRODUCT

1) The largest source of household income in the U.S. isobtained from

A. stock dividends

B. wages and salaries

C. interest earnings

D. rental income

2) The market where business sell goods and services to householdsand the government is called the

A. goods market

B. factor market

C. capital market

D. money market

3) Real gross domestic product is best defined as

A. the market value of intermediate goods and services produced inan economy, including exports

B. all goods and services produced in an economy, stated in theprices of a given year and multiplied by quantity

C. the market value of all final goods and services produced in aneconomy, stated in the prices of a given year

D. the market value of goods and services produced in an economy,stated in current-year prices

4) Underemployment includes people

A. who work “off-the-books” to avoid tax liabilities

B. who are working part time, or not using all their skills at afull-time job

C. who are tired of looking for a job, so they quit looking, butstill want one

D. whose skills are not in demand anymore

5) The Bureau of Economic Analysis is responsible for which of thefollowing?

A. Setting interest rates

B. Managing the money supply

C. Calculating U.S. gross domestic product]

D. Paying unemployment benefits

6) The Federal Reserve provides which of the following data?

A. Federal funds rate

B. Stock price of GE

C. Bond yields of corporations

D. Debt to GDP of Ireland

7) Consider if the government instituted a 10 percent income taxsurcharge. In terms of the AS/AD model, this change should have

A. shifted the AD curve to the left

B. shifted the AD curve to the right

C. made the AD curve flatter

D. made the AD curve steeper

8) If the depreciation of a country’s currency increases itsaggregate expenditures by 20, the AD curve will

A. shift right by more than 20

B. shift right by less than 20

C. shift right by exactly 20

D. not shift at all

9) Aggregate demand management policies are designed most directlyto

A. minimize unemployment

B. minimize inflation

C. control the aggregate level of spending in the economy

D. prevent budget deficits or surpluses

10) Suppose that consumer spending is expected to decrease in thenear future. If output is at potential output, which of thefollowing policies is most appropriate according to the AS/ADmodel?

A. An increase in government spending

B. An increase in taxes

C. A reduction in government spending

D. No change in taxes or government spending

11) According to Keynes, market economies

A. never experience significant declines in aggregate demand

B. quickly recover after they experience a significant decline inaggregate demand

C. may recover slowly after they experience a significant declinein aggregate demand

D. are constantly experiencing significant declines in aggregatedemand

12) The laissez-faire policy prescription to eliminate unemploymentwas to