Question 1

If there is a current account surplus in the U.S. balance of payments, then

Accepted Answer

A)   there will necessarily be a surplus in the financial account.
B)   the sum of deficit accounts exceeds the sum of surplus accounts in the current account.
C)   the sum of surplus accounts in the current account exceeds the sum of deficit accounts in the financial account.
D)   the net balance of the balance of payments will equal zero.
E)   the United States is a net debtor to the rest of the world.F) A) and D)
G) A) and C)

Question 2

The balance of payments is

Accepted Answer

A)   the difference between the dollar value of exports and the dollar value of imports.
B)   the same as the sum of the merchandise and services accounts.
C)   a record of a country's trade in goods, services, and financial assets with the rest of the world.
D)   a summary statement of the merchandise, services, and unilateral transfers accounts.
E)   a record of the amount of U.S. dollars held abroad.F) A) and B)
G) B) and D)

Question 3

GDP can only be calculated according to two different approaches: GDP as output and GDP as income.

Accepted Answer

A) True 
 B)False

Question 4

It is beyond the capability of government officials to count every transaction that takes place in a modern economy.

Accepted Answer

A) True 
 B)False

Question 5

-According to Table 10.1, the contribution to GDP from the production of one loaf of bread is

Accepted Answer

A)   $1.95.
B)   $1.20.
C)   $0.75.
D)   $0.65.
E)   $0.10.F) B) and C)
G) A) and E)

Question 6

What is a COLA?

Accepted Answer

A)   A measure of the quality of living
B)   A consumer price adjustment
C)   An increase in wages to match consumer price increases
D)   Another name for a price index
E)   The brand name of a soft drinkF) B) and C)
G) C) and D)

Question 7

GDP can be calculated as

Accepted Answer

A)   output.
B)   expenditures.
C)   income.
D)   output and income only.
E)   output, expenditures, and income.F) D) and E)
G) B) and D)

Question 8

World GDP is ____ World GNP.

Accepted Answer

A)   more than
B)   less than
C)   equal to
D)   sometimes more than and sometimes less than
E)   cannot be calculatedF) C) and D)
G) A) and B)

Question 9

Which of the following is not a form of foreign exchange?

Accepted Answer

A)   Foreign bank notes
B)   Bank deposits denominated in foreign currency
C)   Domestic currency
D)   Checking accounts denominated in foreign currency
E)   None - all of these are a form of foreign exchangeF) A) and B)
G) A) and E)

Question 10

Which of the following is included in figuring GDP as income?

Accepted Answer

A)   Consumption
B)   Profits
C)   Investment
D)   Government spending
E)   ImportsF) A) and B)
G) B) and D)

Question 11

The difference between gross investment and net investment is defined as

Accepted Answer

A)   net national product.
B)   net exports.
C)   capital consumption allowance.
D)   indirect business taxes.
E)   national income.F) None of the above
G) A) and B)

Question 12

A net surplus in a country's current account indicates that the country is a net borrower from the rest of the world.

Accepted Answer

A) True 
 B)False

Question 13

When imports exceed exports, the balance of trade shows a surplus.

Accepted Answer

A) True 
 B)False

Question 14

-According to Table 10.1, the value added by the grocer is

Accepted Answer

A)   $.10.
B)   $.15.
C)   $.30.
D)   $.65.
E)   $.75.F) A) and B)
G) D) and E)

Question 15

National income accounting refers to a system of accounts that measures macroeconomic activity.

Accepted Answer

A) True 
 B)False

Question 16

A ____ in the value of a currency is called an appreciation of the currency; a ____ in the value of a currency is called a depreciation of the currency.

Accepted Answer

A)   rise; rise
B)   rise; fall
C)   fall; fall
D)   fall; rise
E)   The answer cannot be determined from the information given.F) A) and E)
G) A) and D)

Question 17

If 1 U.S. dollar = 11.76 shillings, then one schilling equals

Accepted Answer

A)   $11.76.
B)   $3.92.
C)   $0.008.
D)   $0.085.
E)   $.111.F) B) and D)
G) A) and E)

Question 18

If the prices of all goods and services never changed, nominal and real GDP would always be the same.

Accepted Answer

A) True 
 B)False

Question 19

The summary measure of a country's current and financial account is referred to as the balance of trade account.

Accepted Answer

A) True 
 B)False

Question 20

What is a consumer price index?

Accepted Answer

A)   A measure of the price at which consumers sell their resources
B)   A measure of the average price level of goods and services purchased by consumers
C)   A measure of the average prices received by producers
D)   A measure of the average price at which consumers sell their resources
E)   A measure of the prices of goods and services included in the gross domestic productF) A) and E)
G) None of the above

Exam 10: Macroeconomic Measures

A ____ in the value of a currency is called an appreciation of the currency; a ____ in the value of a currency is called a depreciation of the currency.

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-According to Table 10.1, the value added by the grocer is

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What is a COLA?

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-According to Table 10.1, the contribution to GDP from the production of one loaf of bread is

Correct AnswerverifiedShow Answer

If there is a current account surplus in the U.S. balance of payments, then

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When imports exceed exports, the balance of trade shows a surplus.

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National income accounting refers to a system of accounts that measures macroeconomic activity.

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If 1 U.S. dollar = 11.76 shillings, then one schilling equals

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The summary measure of a country's current and financial account is referred to as the balance of trade account.

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Which of the following is included in figuring GDP as income?

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World GDP is ____ World GNP.

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The difference between gross investment and net investment is defined as

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What is a consumer price index?

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A net surplus in a country's current account indicates that the country is a net borrower from the rest of the world.

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It is beyond the capability of government officials to count every transaction that takes place in a modern economy.

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GDP can only be calculated according to two different approaches: GDP as output and GDP as income.

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Which of the following is not a form of foreign exchange?

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The balance of payments is

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GDP can be calculated as

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If the prices of all goods and services never changed, nominal and real GDP would always be the same.

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A in the value of a currency is called an appreciation of the currency; a in the value of a currency is called a depreciation of the currency.

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