Macro Final UPDATED Actual Exam
Questions and CORRECT Answers
Sue Holloway was an accountant in 1944 and earned $12,000 that year. Her son, Josh
Holloway, is an accountant today and he earned $210,000 in 2017. Suppose the price index
was 17.6 in 1944 and 218.4 in the current year.
Refer to Scenario 24-1. In real terms, Josh Holloway's income amounts to about what
percentage of Sue Holloway's income? - CORRECT ANSWER✔✔- 141 percent
A mutual fund - CORRECT ANSWER✔✔- is an institution that sells shares to the public
and uses the proceeds to buy a selection of various types of both stocks and bonds.
Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and
had a productivity of 2.5. Country B had a population of 800, of whom 560 worked 8 hours a
day and had productivity of 3.0. - CORRECT ANSWER✔✔- Country B had the higher level
of real GDP and real GDP per person.
Countries with low GDP per person tend to have - CORRECT ANSWER✔✔- higher rates of
infant mortality.
In a closed economy, if Y, C, and T remained the same, a decrease in G would - CORRECT
ANSWER✔✔- increase public saving but not private saving.
The inputs into production of goods and services that are provided by nature, such as land,
rivers, and mineral deposits are called - CORRECT ANSWER✔✔- natural resources
The one variable that stands out as the most significant explanation of large variations in
living standards around the world is - CORRECT ANSWER✔✔- productivity
International studies of the relationship between GDP per person and quality of life measures
such as life expectancy and literacy rates show that larger GDP per person is associated with -
CORRECT ANSWER✔✔- longer life expectancy and a higher percentage of the population
that is literate
, Which of the following is included in GDP? - CORRECT ANSWER✔✔- both the market
value of rental housing services and the market value of owner-occupied housing services
If the consumer price index was 100 in the base year and 106 in the following year, then the
inflation rate was - CORRECT ANSWER✔✔- 6 percent
For a closed economy, GDP is $11 trillion, consumption is $7 trillion, taxes are $2.5 trillion
and the government runs a surplus of $1 trillion. What are private saving and national saving?
- CORRECT ANSWER✔✔- $1.5 trillion and $2.5 trillion, respectively
Out of the following economic statistics, which is the best measure of economic prosperity ? -
CORRECT ANSWER✔✔- The growth rate of real GDP
The Carters' oldest son attends Big State University. He and his parents pay all his fees and
tuition. These payments count in GDP as - CORRECT ANSWER✔✔- consumption of
services
In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show
a consumer price index of 15.2 for 1931 and 237 for 2015. President Hoover's 1931 salary
was equivalent to a 2015 salary of about - CORRECT ANSWER✔✔- $1,169,408.
A larger budget deficit - CORRECT ANSWER✔✔- raises the interest rate and reduces
investment.
Economists use the term inflation to describe a situation in which - CORRECT
ANSWER✔✔- the economy's overall price level is rising.
Suppose private saving in a closed economy is $12b and investment is $10b. - CORRECT
ANSWER✔✔- The government budget deficit must equal $2b
Which of the following is the correct formula for calculating the consumer price index? -
CORRECT ANSWER✔✔- [(price of basket of goods and services in current year/price of
basket in base year)] × 100
Questions and CORRECT Answers
Sue Holloway was an accountant in 1944 and earned $12,000 that year. Her son, Josh
Holloway, is an accountant today and he earned $210,000 in 2017. Suppose the price index
was 17.6 in 1944 and 218.4 in the current year.
Refer to Scenario 24-1. In real terms, Josh Holloway's income amounts to about what
percentage of Sue Holloway's income? - CORRECT ANSWER✔✔- 141 percent
A mutual fund - CORRECT ANSWER✔✔- is an institution that sells shares to the public
and uses the proceeds to buy a selection of various types of both stocks and bonds.
Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and
had a productivity of 2.5. Country B had a population of 800, of whom 560 worked 8 hours a
day and had productivity of 3.0. - CORRECT ANSWER✔✔- Country B had the higher level
of real GDP and real GDP per person.
Countries with low GDP per person tend to have - CORRECT ANSWER✔✔- higher rates of
infant mortality.
In a closed economy, if Y, C, and T remained the same, a decrease in G would - CORRECT
ANSWER✔✔- increase public saving but not private saving.
The inputs into production of goods and services that are provided by nature, such as land,
rivers, and mineral deposits are called - CORRECT ANSWER✔✔- natural resources
The one variable that stands out as the most significant explanation of large variations in
living standards around the world is - CORRECT ANSWER✔✔- productivity
International studies of the relationship between GDP per person and quality of life measures
such as life expectancy and literacy rates show that larger GDP per person is associated with -
CORRECT ANSWER✔✔- longer life expectancy and a higher percentage of the population
that is literate
, Which of the following is included in GDP? - CORRECT ANSWER✔✔- both the market
value of rental housing services and the market value of owner-occupied housing services
If the consumer price index was 100 in the base year and 106 in the following year, then the
inflation rate was - CORRECT ANSWER✔✔- 6 percent
For a closed economy, GDP is $11 trillion, consumption is $7 trillion, taxes are $2.5 trillion
and the government runs a surplus of $1 trillion. What are private saving and national saving?
- CORRECT ANSWER✔✔- $1.5 trillion and $2.5 trillion, respectively
Out of the following economic statistics, which is the best measure of economic prosperity ? -
CORRECT ANSWER✔✔- The growth rate of real GDP
The Carters' oldest son attends Big State University. He and his parents pay all his fees and
tuition. These payments count in GDP as - CORRECT ANSWER✔✔- consumption of
services
In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show
a consumer price index of 15.2 for 1931 and 237 for 2015. President Hoover's 1931 salary
was equivalent to a 2015 salary of about - CORRECT ANSWER✔✔- $1,169,408.
A larger budget deficit - CORRECT ANSWER✔✔- raises the interest rate and reduces
investment.
Economists use the term inflation to describe a situation in which - CORRECT
ANSWER✔✔- the economy's overall price level is rising.
Suppose private saving in a closed economy is $12b and investment is $10b. - CORRECT
ANSWER✔✔- The government budget deficit must equal $2b
Which of the following is the correct formula for calculating the consumer price index? -
CORRECT ANSWER✔✔- [(price of basket of goods and services in current year/price of
basket in base year)] × 100
