CLEMSON MACROECONOMICS 2120
FINAL EXAM QUESTIONS AND
ANSWERS
Adam Smith's metaphor of the "invisible hand" can lead to benefits to society when... -
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
ans-institutions align the private interest with the social interest
sq sq sq sq sq sq sq sq sq
When people choose to recycle and buy appliances that conserve on energy, they are a
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
cting in ______ & _______. - ans-the social interest, their self-interest
sq sq sq sq sq sq sq sq sq sq
In an effort to clean air, many communities impose restrictions on the burning of garbage
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
. This policy causes more garbage to be buried underground, potentially increasing grou
sq sq sq sq sq sq sq sq sq sq sq sq
ndwater contamination. What concept does this example represent? - ans-Trade-Offs
sq sq sq sq sq sq sq sq sq
The opportunity cost of receiving a free ticked to the NCAA championship game with a f
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
ace-value of $450 and attending the game is: - ans- sq sq sq sq sq sq sq sq sq
there resale value of the lost market value of selling the ticket and the time to go
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
What are the institutions that help foster the appropriate incentives for economic growth
sq sq sq sq sq sq sq sq sq sq sq sq
? - ans-a dependable legal system, property rights, & competitive & open markets
sq sq sq sq sq sq sq sq sq sq sq sq
Gross Domestic Product (GDP) is best defined as the _____ value of all _____ goods a
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
nd services that are produced _________. - ans-market, final, within a country in 1 year
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
what data is used to calculate GDP? - ans-both quantities and prices of goods
sq sq sq sq sq sq sq sq sq sq sq sq sq
If a country's GDP per capita rises, this means that...
sq sq sq sq sq sq sq sq sq
i. the country has fewer poorer people
sq sq sq sq sq sq sq
ii. some people in the country have more wealth
sq sq sq sq sq sq sq sq
iii. the country's standard of living is rising - ans-ii & iii
sq sq sq sq sq sq sq sq sq sq sq
It is often said that _____ is the "main driver" the economy because its share of GDP is l
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
arger than any of the other expenditure components. - ans-consumption
sq sq sq sq sq sq sq sq sq
The most volatile component of GDP is.... - ans-investment
sq sq sq sq sq sq sq sq
Private spending on tools, plant, and equipment that are used to produce future output is
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
called... - ans-investment
sq sq sq
the factor income approach to calculating GDP can be summarized as the summation of
sq sq sq sq sq sq sq sq sq sq sq sq sq s
q.... - ans-wages, interest, rent, & profit
sq sq sq sq sq sq
, Sydney buys a used car form Lemon Drop Used Cars in 2015 for $3,000. Francis, a sale
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
sperson at Lemon Drop, receives $200 in commission for selling the car to Sydney. How
sq sq sq sq sq sq sq sq sq sq sq sq sq sq s
much does this transaction contribute to 2015 GDP? - ans-$200
q sq sq sq sq sq sq sq sq sq
Last month Trevor purchased $177 of Swedish Fish from an online retailer in Sweden. H
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
ow does this transaction contribute to GDP in 2016? - ans-
sq sq sq sq sq sq sq sq sq sq
Consumption increases by $177 and net exports fall $177 sq sq sq sq sq sq sq sq
Birmingham Steel sells to Winston Golf Club Manufacturers for $300,000. Winston sells i
sq sq sq sq sq sq sq sq sq sq sq sq
ts golf clubs to Academy Sports for $1,000,000. Academy Sports sells Winston golf club
sq sq sq sq sq sq sq sq sq sq sq sq sq
s for $1,500,000. How much is added to GDP? - ans-$1,500,000
sq sq sq sq sq sq sq sq sq sq
If you want to compare real GDP in 2010 and 2015, what prices can you use...
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
i. 2010 prices for GDP in both years
sq sq sq sq sq sq sq
ii. 2015 prices for GDP in both years
sq sq sq sq sq sq sq sq
iii. 2007 prices for GDP in 2010 and 2015 - ans-i, ii, & iii
sq sq sq sq sq sq sq sq sq sq sq sq sq
Why is Nigeria considered to be a growth disaster in spite of the fact that it has large dep
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
osits of oil? - ans- sq sq sq sq
the occurrence of civil war, rulers who were dictators and spent the wealth on arms purc
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
hases, & corruption that siphoned away oil wealth into secret Swiss bank accounts.
sq sq sq sq sq sq sq sq sq sq sq sq
The growth rate of GDP is...
sq sq sq sq sq
a. GDP adjusted for changes in the inflation rate
sq sq sq sq sq sq sq sq sq
b. GDP adjusted changes in the price level
sq sq sq sq sq sq sq sq
c. GDP adjusted for changes in population growth
sq sq sq sq sq sq sq
d. none of these are correct - ans-D.
sq sq sq sq sq sq sq sq
(current year's GDP - Last year's GDP) / Last year's GDP
sq sq sq sq sq sq sq sq sq sq
In the course, we use _____ as a proxy for a country's standard of living. - ans-
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
real GDP per capita sq sq sq
Consider an industrialized country where the growth rate of real GDP is -
sq sq sq sq sq sq sq sq sq sq sq sq
1% per year. However, the growth rate of real GDP per capita is positive. What is the mo
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
st likely reason this is occurring? - ans-
sq sq sq sq sq sq sq
the country's population is growing slower than the growth of nominal GDP
sq sq sq sq sq sq sq sq sq sq sq
what are the components of the National Spending Approach to calculating GDP? - ans-
sq sq sq sq sq sq sq sq sq sq sq sq sq
consumption goods and services, investment goods, government purchases, & net expo
sq sq sq sq sq sq sq sq sq sq
rts
Why do economists think that GDP may overestimate the actual level of economic activit
sq sq sq sq sq sq sq sq sq sq sq sq sq
y in an economy? - ans-there is no negative adjustment for pollution.
sq sq sq sq sq sq sq sq sq sq sq
FINAL EXAM QUESTIONS AND
ANSWERS
Adam Smith's metaphor of the "invisible hand" can lead to benefits to society when... -
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
ans-institutions align the private interest with the social interest
sq sq sq sq sq sq sq sq sq
When people choose to recycle and buy appliances that conserve on energy, they are a
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
cting in ______ & _______. - ans-the social interest, their self-interest
sq sq sq sq sq sq sq sq sq sq
In an effort to clean air, many communities impose restrictions on the burning of garbage
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
. This policy causes more garbage to be buried underground, potentially increasing grou
sq sq sq sq sq sq sq sq sq sq sq sq
ndwater contamination. What concept does this example represent? - ans-Trade-Offs
sq sq sq sq sq sq sq sq sq
The opportunity cost of receiving a free ticked to the NCAA championship game with a f
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
ace-value of $450 and attending the game is: - ans- sq sq sq sq sq sq sq sq sq
there resale value of the lost market value of selling the ticket and the time to go
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
What are the institutions that help foster the appropriate incentives for economic growth
sq sq sq sq sq sq sq sq sq sq sq sq
? - ans-a dependable legal system, property rights, & competitive & open markets
sq sq sq sq sq sq sq sq sq sq sq sq
Gross Domestic Product (GDP) is best defined as the _____ value of all _____ goods a
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
nd services that are produced _________. - ans-market, final, within a country in 1 year
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
what data is used to calculate GDP? - ans-both quantities and prices of goods
sq sq sq sq sq sq sq sq sq sq sq sq sq
If a country's GDP per capita rises, this means that...
sq sq sq sq sq sq sq sq sq
i. the country has fewer poorer people
sq sq sq sq sq sq sq
ii. some people in the country have more wealth
sq sq sq sq sq sq sq sq
iii. the country's standard of living is rising - ans-ii & iii
sq sq sq sq sq sq sq sq sq sq sq
It is often said that _____ is the "main driver" the economy because its share of GDP is l
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
arger than any of the other expenditure components. - ans-consumption
sq sq sq sq sq sq sq sq sq
The most volatile component of GDP is.... - ans-investment
sq sq sq sq sq sq sq sq
Private spending on tools, plant, and equipment that are used to produce future output is
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
called... - ans-investment
sq sq sq
the factor income approach to calculating GDP can be summarized as the summation of
sq sq sq sq sq sq sq sq sq sq sq sq sq s
q.... - ans-wages, interest, rent, & profit
sq sq sq sq sq sq
, Sydney buys a used car form Lemon Drop Used Cars in 2015 for $3,000. Francis, a sale
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
sperson at Lemon Drop, receives $200 in commission for selling the car to Sydney. How
sq sq sq sq sq sq sq sq sq sq sq sq sq sq s
much does this transaction contribute to 2015 GDP? - ans-$200
q sq sq sq sq sq sq sq sq sq
Last month Trevor purchased $177 of Swedish Fish from an online retailer in Sweden. H
sq sq sq sq sq sq sq sq sq sq sq sq sq sq
ow does this transaction contribute to GDP in 2016? - ans-
sq sq sq sq sq sq sq sq sq sq
Consumption increases by $177 and net exports fall $177 sq sq sq sq sq sq sq sq
Birmingham Steel sells to Winston Golf Club Manufacturers for $300,000. Winston sells i
sq sq sq sq sq sq sq sq sq sq sq sq
ts golf clubs to Academy Sports for $1,000,000. Academy Sports sells Winston golf club
sq sq sq sq sq sq sq sq sq sq sq sq sq
s for $1,500,000. How much is added to GDP? - ans-$1,500,000
sq sq sq sq sq sq sq sq sq sq
If you want to compare real GDP in 2010 and 2015, what prices can you use...
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
i. 2010 prices for GDP in both years
sq sq sq sq sq sq sq
ii. 2015 prices for GDP in both years
sq sq sq sq sq sq sq sq
iii. 2007 prices for GDP in 2010 and 2015 - ans-i, ii, & iii
sq sq sq sq sq sq sq sq sq sq sq sq sq
Why is Nigeria considered to be a growth disaster in spite of the fact that it has large dep
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
osits of oil? - ans- sq sq sq sq
the occurrence of civil war, rulers who were dictators and spent the wealth on arms purc
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
hases, & corruption that siphoned away oil wealth into secret Swiss bank accounts.
sq sq sq sq sq sq sq sq sq sq sq sq
The growth rate of GDP is...
sq sq sq sq sq
a. GDP adjusted for changes in the inflation rate
sq sq sq sq sq sq sq sq sq
b. GDP adjusted changes in the price level
sq sq sq sq sq sq sq sq
c. GDP adjusted for changes in population growth
sq sq sq sq sq sq sq
d. none of these are correct - ans-D.
sq sq sq sq sq sq sq sq
(current year's GDP - Last year's GDP) / Last year's GDP
sq sq sq sq sq sq sq sq sq sq
In the course, we use _____ as a proxy for a country's standard of living. - ans-
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
real GDP per capita sq sq sq
Consider an industrialized country where the growth rate of real GDP is -
sq sq sq sq sq sq sq sq sq sq sq sq
1% per year. However, the growth rate of real GDP per capita is positive. What is the mo
sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq sq
st likely reason this is occurring? - ans-
sq sq sq sq sq sq sq
the country's population is growing slower than the growth of nominal GDP
sq sq sq sq sq sq sq sq sq sq sq
what are the components of the National Spending Approach to calculating GDP? - ans-
sq sq sq sq sq sq sq sq sq sq sq sq sq
consumption goods and services, investment goods, government purchases, & net expo
sq sq sq sq sq sq sq sq sq sq
rts
Why do economists think that GDP may overestimate the actual level of economic activit
sq sq sq sq sq sq sq sq sq sq sq sq sq
y in an economy? - ans-there is no negative adjustment for pollution.
sq sq sq sq sq sq sq sq sq sq sq
