MACROECONOMICS EXAM SCRIPT SOLVED
QUESTIONS ACCURATE ANSWER
COLLECTION
●● Important features of GDP:
Answer: dollar value
goods and services
final products, within a country's borders, and in a given year
●● 4 categories of spending:
Answer: consumption
investment
government purchases
Xnet (net exports)
●● Suppose a house is built and sold in the year 2000. If the house is
resold in the year 2013, is the value of the house included in Gross
Domestic Product for 2013?
Answer: No. GDP for 2013 includes only production that occurs during
2013
●● Which equation represents the relationship between GDP and the
four major expenditure components?
,Answer: Y=C+I+G+NX
●● What is the difference between the value of a firm's final product and
the value added by the firm to the final product?
Answer: The value of a firm's final product is the sale price; value added
is the difference between the sale price and the price of intermediate
goods.
●● Would the service of a real estate agent who helped sell (or helped
buy) the house be included in GDP for 2013?
Answer: Yes. GDP for 2013 includes the market value of final goods and
services. This includes real estate services.
●● What are the four categories of income?
Answer: Wages
Interest
Rent
and Profit
●● The circular flow diagram shows that _____ should equal _______
Answer: Total expenditure; Total income
●● The circular flow diagram shows that all sources of income are
owned by
, Answer: households
●● One major component of GDP that can be negative is
Answer: net exports
●● The business cycle exists because:
Answer: production experience periods of increases and periods of
decrease
●● When would a recession occur?
Answer: when an economy experiences a period in which there is a
decrease in total production
●● Transfer payments are not included in GDP calculations because:
Answer: Transfer payments are simply transfers of income from one
group to another and not a purchase of a new good or service
●● How does the size of a country's GDP affect the quality of life of the
country's people?
Answer: Generally, the more goods and services people have, the better
off they are
●● GDP is an imperfect measure of economic well being because it fails
to measure what types of production?
QUESTIONS ACCURATE ANSWER
COLLECTION
●● Important features of GDP:
Answer: dollar value
goods and services
final products, within a country's borders, and in a given year
●● 4 categories of spending:
Answer: consumption
investment
government purchases
Xnet (net exports)
●● Suppose a house is built and sold in the year 2000. If the house is
resold in the year 2013, is the value of the house included in Gross
Domestic Product for 2013?
Answer: No. GDP for 2013 includes only production that occurs during
2013
●● Which equation represents the relationship between GDP and the
four major expenditure components?
,Answer: Y=C+I+G+NX
●● What is the difference between the value of a firm's final product and
the value added by the firm to the final product?
Answer: The value of a firm's final product is the sale price; value added
is the difference between the sale price and the price of intermediate
goods.
●● Would the service of a real estate agent who helped sell (or helped
buy) the house be included in GDP for 2013?
Answer: Yes. GDP for 2013 includes the market value of final goods and
services. This includes real estate services.
●● What are the four categories of income?
Answer: Wages
Interest
Rent
and Profit
●● The circular flow diagram shows that _____ should equal _______
Answer: Total expenditure; Total income
●● The circular flow diagram shows that all sources of income are
owned by
, Answer: households
●● One major component of GDP that can be negative is
Answer: net exports
●● The business cycle exists because:
Answer: production experience periods of increases and periods of
decrease
●● When would a recession occur?
Answer: when an economy experiences a period in which there is a
decrease in total production
●● Transfer payments are not included in GDP calculations because:
Answer: Transfer payments are simply transfers of income from one
group to another and not a purchase of a new good or service
●● How does the size of a country's GDP affect the quality of life of the
country's people?
Answer: Generally, the more goods and services people have, the better
off they are
●● GDP is an imperfect measure of economic well being because it fails
to measure what types of production?
