Name: Score:
75 Multiple choice questions
Term 1 of 75
When calculating GDP, exports are ________ and imports are ________.
A) added; added
B) added; subtracted
C) subtracted; added
D) subtracted; subtracted
D
A
C
B
Term 2 of 75
To bring the economy out of an inflationary period, Keynes argued that the government should
A) cut both taxes and government spending.
B) increase both taxes and government spending.
C) increase taxes and/or decrease government spending.
D) decrease taxes and/or increase government spending.
D
A
C
B
,Term 3 of 75
Which of the following statements is TRUE?
A) The costs of recessions are distributed equally among all groups of the population.
B) Recessions tend to increase the demand for imports and therefore improve the nation's
balance of payments.
C) Recessions may increase efficiency by driving the least efficient firms in the economy out of
business.
D) A recession may lead to an increase in the inflation rate.
A
B
C
D
Term 4 of 75
Which of the following is NOT counted in the GNP of the United States?
A) The wage of a U.S. citizen who works in a foreign country for a foreign firm.
B) The interest earned by a U.S. bank on loans to a business firm located in Brazil.
C) The profit earned by a restaurant located in the United States but owned by a Mexican
company.
D) The value of services that are produced by state and local governments in the United States.
A
B
D
C
,Term 5 of 75
Exports equal
A) imports - net exports.
B) net exports + imports.
C) net exports - imports.
D) imports + (exports + imports)
C
D
A
B
Term 6 of 75
If unplanned inventory investment is positive, then
A) planned investment must be zero.
B) planned aggregate spending must be greater than aggregate output.
C) planned aggregate spending must be less than aggregate output.
D) planned aggregate spending must equal aggregate output.
B
D
C
A
, Term 7 of 75
Which of the following is NOT included in 2008's GDP? A) the value of a motorcycle produced in
the United States and exported to Japan
B) the profit earned in 2008 from selling a stock that you purchased in 2005
C) the value of a motor that is used in the production of a lawn mower
D) the commission earned by a headhunter when she locates a job for a client
C
D
B
A
Term 8 of 75
If the GDP deflator is greater than 100, then
A) nominal GDP is greater than real GDP.
B) nominal GDP is lower than real GDP.
C) nominal GDP equals real GDP.
D) prices decreased by more than half between the current and the base years.
A
D
B
C
75 Multiple choice questions
Term 1 of 75
When calculating GDP, exports are ________ and imports are ________.
A) added; added
B) added; subtracted
C) subtracted; added
D) subtracted; subtracted
D
A
C
B
Term 2 of 75
To bring the economy out of an inflationary period, Keynes argued that the government should
A) cut both taxes and government spending.
B) increase both taxes and government spending.
C) increase taxes and/or decrease government spending.
D) decrease taxes and/or increase government spending.
D
A
C
B
,Term 3 of 75
Which of the following statements is TRUE?
A) The costs of recessions are distributed equally among all groups of the population.
B) Recessions tend to increase the demand for imports and therefore improve the nation's
balance of payments.
C) Recessions may increase efficiency by driving the least efficient firms in the economy out of
business.
D) A recession may lead to an increase in the inflation rate.
A
B
C
D
Term 4 of 75
Which of the following is NOT counted in the GNP of the United States?
A) The wage of a U.S. citizen who works in a foreign country for a foreign firm.
B) The interest earned by a U.S. bank on loans to a business firm located in Brazil.
C) The profit earned by a restaurant located in the United States but owned by a Mexican
company.
D) The value of services that are produced by state and local governments in the United States.
A
B
D
C
,Term 5 of 75
Exports equal
A) imports - net exports.
B) net exports + imports.
C) net exports - imports.
D) imports + (exports + imports)
C
D
A
B
Term 6 of 75
If unplanned inventory investment is positive, then
A) planned investment must be zero.
B) planned aggregate spending must be greater than aggregate output.
C) planned aggregate spending must be less than aggregate output.
D) planned aggregate spending must equal aggregate output.
B
D
C
A
, Term 7 of 75
Which of the following is NOT included in 2008's GDP? A) the value of a motorcycle produced in
the United States and exported to Japan
B) the profit earned in 2008 from selling a stock that you purchased in 2005
C) the value of a motor that is used in the production of a lawn mower
D) the commission earned by a headhunter when she locates a job for a client
C
D
B
A
Term 8 of 75
If the GDP deflator is greater than 100, then
A) nominal GDP is greater than real GDP.
B) nominal GDP is lower than real GDP.
C) nominal GDP equals real GDP.
D) prices decreased by more than half between the current and the base years.
A
D
B
C
