Title: Economic Indicators
Course: TEST Course

Q: Which of the following describes the macroeconomy?
- The oil and gas sector in Texas has seen the largest job gains in 2017.
- The online retail business has been growing at the expense of traditional retail stores.
- The US inflation rate has been under 2% annually over the last 7 years.
A: The US inflation rate has been under 2% annually over the last 7 years.

Q: Of the following statements, which describes macroeconomy?
- The technology sector in San Francisco has seen the largest job gains in 2017.
- Retail stores have been in decline due to the online retail business growth.
- The US inflation rate has been under 3% annually over the last 5 years.
A: The US inflation rate has been under 3% annually over the last 5 years.

Q: A macroeconomist would study
- the impact of regulations in the banking sector in Florida.
- household spending patterns in lower income groups.
- economic policies designed to stimulate the country’s economy out of a recession.
A: economic policies designed to stimulate the country’s economy out of a recession.

Q: If an individual was studying the economic policies designed to stimulate the country’s economy out of a recession they would be a
- microeconomist.
- business manager.
- macroeconomist.
A: macroeconomist.

Q: A macroeconomic externality occurs when
- cost is passed onto third parties by producers in certain markets.
- economic activity that is external to a country’s economy is added such as investment of US firms overseas.
- outcomes at the macroeconomic level are different from the outcomes at the microeconomic level.
A: outcomes at the macroeconomic level are different from the outcomes at the microeconomic level.

Q: When an outcome at the macroeconomic level is different from the outcome at the microeconomic level it is know as a(n)
- Cost production
- microeconomic externality.
- macroeconomic externality.
A: macroeconomic externality.

Q: The macroeconomy
- focuses on firms and the production of goods and services.
- primarily studies government economic policies.
- regroups the activity of all households, firms and government in a country.
A: regroups the activity of all households, firms and government in a country.

Q: An example of a macroeconomy is when it
- focuses on firms and the production of goods and services.
- primarily studies government economic policies.
- regroups the activity of all households, firms and government in a country.
A: regroups the activity of all households, firms and government in a country.

Q: An economic indicator is:
- one of a series of laws that was passed in the 1990s to help reduce the trade deficit.
- a variable that describes how the economy fluctuates every four years due to presidential elections.
- a statistic that helps us understand how the economy is doing.
A: a statistic that helps us understand how the economy is doing.

Q: Economic indicators can help give us
- a direction in which economists can push the economy at the macro level.
- insight into which way the stock market is going to move over the coming year.
- an understanding of the state of the economy.
A: an understanding of the state of the economy.

Q: After getting her degree in Economics, Jeanine went to work for the Bureau of Labor Statistics. She compiles data on the unemployment rate, which serves as an economic indicator. What does this data help Jeanine to understand?
- How many new employees the Bureau of Labor Statistics should hire this year.
- Whether or not the banking industry is going to require federal assistance.
- How the economy is doing at a macro level.
A: How the economy is doing at a macro level.

Q: Assume that you are an economist looking at economic indicators for both the United States as well as several European countries. What do these economic indicators enable you to do?
- Determine whether the European countries have received financial assistance from the United States.
- Compare tax systems between the U.S. and Europe.
- Compare how well the U.S. economy is doing relative to the European countries.
A: Compare how well the U.S. economy is doing relative to the European countries.

Q: In his Macroeconomics class, Louis is working on a project for which he needs to understand the state of the U.S. economy. Which of the following is an economic indicator that Louis could use to help him with this task?
- the number of businesses that failed in the last quarter
- the number of financial laws that were passed in the last year
- the unemployment rate
A: the unemployment rate

Q: Carla just started her new job working at the Department of Commerce. In order to see whether Carla “knows her stuff,” her boss asks her to put together a presentation on the current state of the economy. What is one of the economic indicators Carla could look at?
- stock market trends over the past few months
- cost of housing
- the inflation rate
A: the inflation rate

Q: You have just started your new job in Washington D.C. at the Bureau of Economic Analysis department. Your first task if to calculate economic indicators from 2017 to assess the macroeconomic state of the country. Which answer fits what you need?
- Total profit and loss statistics from the city of Washington D.C. for 2017.
- The housing trends for the Western United States for 2017.
- The quantitative measurements of the nation’s economic activity for 2017.
A: The quantitative measurements of the nation’s economic activity for 2017.

Q: The Department of Commerce in Washington D.C. is developing the macroeconomic report for the nations’ previous economic quarter. You are tasked with calculating that economic report. You start your calculations by assessing the
- total profit and loss statistics from the city of Washington D.C. for the last quarter.
- housing trends for the Western United States from the last quarter.
- quantitative measurements of the nation’s economic activity from last quarter.
A: quantitative measurements of the nation’s economic activity from last quarter.

Q: Gross Domestic Product (GDP) is designed to measure:
- a nation’s total consumption of final goods and services.
- a nation’s total imports of final goods and services
- a nation’s total production of final goods and services.
A: a nation’s total production of final goods and services.

Q: What is the Gross Domestic Product (GDP) designed to measure?
- A nation’s total consumption of final goods and services.
- A nation’s total imports of final goods and services
- A nation’s total production of final goods and services.
A: A nation’s total production of final goods and services.

Q: Which of the following is counted as part of GDP?
- The purchase of your grandfather’s old car by a neighbor.
- The predicted inventory for next year.
- The purchase of a snow plough by the city of Minneapolis.
A: The purchase of a snow plough by the city of Minneapolis.

Q: Which of the following is left out of being counted as part of GDP?
- The purchase of a new snow plough by the city of Minneapolis.
- The unsold additions to inventory at an appliances store.
- The purchase of your next door neighbor’s house.
A: The purchase of your next door neighbor’s house.

Q: Final goods or services used to compute GDP refer to:
- the factors of production used to produce output.
- the value of outstanding shares of stock of manufacturing firms.
- goods and services purchased by the ultimate users.
A: goods and services purchased by the ultimate users.

Q: GDP includes
- intermediate and final goods to count all goods and services produced.
- final goods and inventories of imported intermediate goods.
- only final goods to avoid double counting when including intermediate goods.
A: only final goods to avoid double counting when including intermediate goods.

Q: Which of the following is included in GDP?
- Cash paid to a babysitter that is not reported to the tax authorities.
- Your friend changes your brake pads for free.
- The payments for a chiropractor’s services.
A: The payments for a chiropractor’s services.

Q: Which of the following is included in GDP calculations?
- Cash received from a yard sale.
- The milk that is purchased by Ben & Jerry’s and used in the ice cream they sell.
- The university tuition paid to enroll in a course.
A: The university tuition paid to enroll in a course.

Q: Which of the following is included in GDP?
- Revenue from the sale of a three-year old car.
- The cost of eggs for a baker who sells donuts and cakes.
- The tickets to a football game that were bought but never used.
A: The tickets to a football game that were bought but never used.

Q: Which one of these answers is included in GDP for 2017?
- Revenue from the sale of a five-year old boat in 2017.
- The cost of flour for a manufacturer who makes tortillas in 2017.
- The tickets to a Janet Jackson concert purchase and used in 2017.
A: The tickets to a Janet Jackson concert purchase and used in 2017.

Q: Which of the following would fall in the investment component of GDP?
- The amount spent on stocks and bonds.
- The amount spent on consumer durable goods.
- The amount spent on new factories.
A: The amount spent on new factories.

Q: The purchase of new capital goods by a business would fall under which component of GDP?
- consumption
- government
- investment
A: investment

Q: Which of the following captures all the components of GDP?
- C + I + G
- C + I + G + M
- C + I + G + (X – M)
A: C + I + G + (X – M)

Q: Which of the following is NOT a major component of GDP as measured by the expenditure approach?
- consumption
- investment
- taxation
A: taxation

Q: Which of the following is included in a measure of GDP?
- spending on used goods
- spending on non-market transactions like painting your house
- spending on public infrastructure
A: spending on public infrastructure

Q: In measuring GDP as the sum of all incomes earned in production, we should include
- purchases of used goods.
- American purchases of foreign output.
- wages and salaries.
A: wages and salaries.

Q: The United States will have a trade deficit in which of the following scenarios?
- Spending by American households, businesses, and government is less than U.S. GDP.
- Spending on the American goods and services is less than U.S. GDP.
- U.S. imports are greater than U.S. exports.
A: U.S. imports are greater than U.S. exports.

Q: Last year, in calculating the GDP of the United States imports were found to be greater than U.S. export. This is known as a
- trade imbalance.
- trade surplus.
- trade deficit.
A: trade deficit.

Q: GDP includes
- purchases of U.S. made products by the federal government, consumers and private businesses in the U.S. only.
- all purchases of products from the federal government, consumers in the U.S. and around the world.
- purchases of U.S. made products by consumers, private businesses and the government sector.
A: purchases of U.S. made products by consumers, private businesses and the government sector.

Q: Consumption describes
- purchases of all final goods and services by consumers.
- purchases of all goods and services by consumers and businesses.
- purchases of final goods and services by consumers except new housing.
A: purchases of final goods and services by consumers except new housing.

Q: When calculating GDP as the sum total of all spending, which of the following should be included?
- savings
- government transfer payments
- government purchases of labor, goods, and services
A: government purchases of labor, goods, and services

Q: Which of the following is included in GDP?
- savings
- government transfer payments
- government purchases of labor, goods, and services
A: government purchases of labor, goods, and services

Q: Which of the following is included in the computation of GDP in a particular year?
- social security payments to retirees
- total value of imports
- government expenditure on public schools
A: government expenditure on public schools

Q: Which of the following would be included in the computation of GDP in a particular year?
- distribution of food stamps to recipients
- an increase in imported goods
- government expenditure on national defense
A: government expenditure on national defense

Q: Over the past 50 years, which component of spending has steadily gained as a percentage of the total?
- durable goods
- nondurable goods
- services
A: services

Q: Which component of spending has steadily gained over the past fifty years?
- nondurable goods
- structures
- services
A: services

Q: When calculating GDP, investment refers to the
- purchase of stocks, bonds, or other financial assets.
- amount of new capital goods sold in a given year.
- purchase of new capital goods like equipment and inventories.
A: purchase of new capital goods like equipment and inventories.

Q: Investment, when calculating GDP, refers to the
- purchase of stocks and bonds and trading financial assets.
- amount of new capital goods sold in a given year.
- purchase of new capital goods like real estate, equipment, and inventories.
A: purchase of new capital goods like real estate, equipment, and inventories.

Q: Fred is reading through a news article about the nation’s GDP. The article mentions as part of its calculations, consumption expenditures. What is included in the GDP calculation of consumption?
- exported goods
- purchase of new manufacturing facilities
- nondurable and durable goods
A: nondurable and durable goods

Q: Zander read a report about the nation’s GDP from last year. The report talks about the investment expenditures. What is included in the GDP calculation of investment?
- total value of capital stock
- purchase of new private housing
- additions to inventories
A: additions to inventories

Q: In calculating GDP, which component of spending must be subtracted from total spending to account for the fact that not all private or public spending by U.S. households is directed to U.S. businesses?
- domestic
- export
- import
A: import

Q: In calculating GDP, which component of spending must be subtracted from total spending?
- depreciation
- export
- import
A: import

Q: If depreciation equals $36 billion, GNP equals $240 billion, and national income is $225 billion, then what is the Net National Product?
- $276 billion
- $361 billion
- $204 billion
A: $204 billion

Q: If depreciation equals $32 billion, GNP equals $230 billion, and national income is $215 billion, then what is the Net National Product?
- $189 billion
- $273 billion
- $198 billion
A: $198 billion

Q: Which of the following would be included in Gross National Product?
- A bottle of Tequila made in Mexico sold by Spec’s Liquor in Texas.
- Maple syrup produced by a Canadian firm in New York state.
- A dresser made in Mexico by USA furniture direct inc.
A: A dresser made in Mexico by USA furniture direct inc.

Q: Gross national product would include
- final goods and services produced in the United States.
- final goods and services produced in the United States by US firms.
- final goods and services produced by American resources.
A: final goods and services produced by American resources.

Q: Use the figures in the table for the calculation. What is the NNP?

Government Purchases | $158 billion
Depreciation | $28 billion
Consumption | $427 billion
Investment | $43 billion
Exports | $87 billion
Imports | $103 billion
Income receipts from rest of the world | $7 billion
Income payments to rest of the world | $5 billion
- $612 billion
- $858 billion
- $586 billion
A: $586 billion

Q: Calculate the NNP using the figures in the table. What is the NNP?

Government Purchases | $220 billion
Depreciation | $35 billion
Consumption | $575 billion
Investment | $55 billion
Exports | $120 billion
Imports | $110 billion
Income receipts from rest of the world | $12 billion
Income payments to rest of the world | $9 billion
- $860 billion
- $1136 billion
- $828 billion
A: $828 billion

Q: You are in charge of calculating the needed figures for a government report. The figure you need to calculate is the GDP. Using the numbers in the table, what is the GDP?

Government Purchases | $220 billion
Depreciation | $35 billion
Consumption | $575 billion
Investment | $55 billion
Exports | $120 billion
Imports | $110 billion
Income receipts from rest of the world | $12 billion
Income payments to rest of the world | $9 billion
- $828 billion
- $1136 billion
- $860 billion
A: $860 billion

Q: Your boss has asked you to calculate the needed figures for a government report. The figure you need to calculate is the GDP using the numbers in the table. What is the GDP?

Government Purchases | $158 billion
Depreciation | $28 billion
Consumption | $427 billion
Investment | $43 billion
Exports | $87 billion
Imports | $103 billion
Income receipts from rest of the world | $7 billion
Income payments to rest of the world | $5 billion
- $586 billion
- $858 billion
- $612 billion
A: $612 billion