macroeconomics Exam 2
Questions with Answers
1. The demand measure or expenditure approach of GDP
accounting adds together correct answer:
a) wages and salaries, rent, interest, and profit
b) consumption, investment, government purchases, and trade
balance or net export
c)consumption, government purchases, wages and salaries, and trade
balance or net export
d) consumption, interest, government purchases, and trade balance
or net export correct answer: b) consumption, investment, government purchases, and
trade balance or net export
2. Which of the following is not included in GDP?
a) the payment for a chiropractor's services
b) cash income paid to a day laborer that is not reported to the tax
authorities
c)the replacement of brake pads on your six-year-old vehicle
d) the fees for legal services rendered by your lawyer correct answer: b) cash
income paid to a day laborer that is not reported to the tax authorities
3. The gap between exports and imports in a nation's economy is
called the
a) trade surplus
b) trade balance
c)trade deficit
d) trade inventory correct answer: b) trade balance
4. The difference between nominal GDP and real GDP is correct
answer:
a) nominal GDP measures actual productivity
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, b) nominal GDP adjusts for inflation
c)real GDP adjusts for inflation
d) real GDP excludes imports and exports correct answer: c) real GDP adjusts for
inflation
5. A business cycle reflects changes in economic activity, particularly
real GDP. The stages of a business cycle in correct order are
correct answer:
a) trough, expansion, recession, peak
b) contraction, recession, expansion, boom
c)expansion, trough, recession, peak
d) expansion, peak, recession, trough correct answer: d) expansion, peak, recession,
trough
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14
Questions with Answers
1. The demand measure or expenditure approach of GDP
accounting adds together correct answer:
a) wages and salaries, rent, interest, and profit
b) consumption, investment, government purchases, and trade
balance or net export
c)consumption, government purchases, wages and salaries, and trade
balance or net export
d) consumption, interest, government purchases, and trade balance
or net export correct answer: b) consumption, investment, government purchases, and
trade balance or net export
2. Which of the following is not included in GDP?
a) the payment for a chiropractor's services
b) cash income paid to a day laborer that is not reported to the tax
authorities
c)the replacement of brake pads on your six-year-old vehicle
d) the fees for legal services rendered by your lawyer correct answer: b) cash
income paid to a day laborer that is not reported to the tax authorities
3. The gap between exports and imports in a nation's economy is
called the
a) trade surplus
b) trade balance
c)trade deficit
d) trade inventory correct answer: b) trade balance
4. The difference between nominal GDP and real GDP is correct
answer:
a) nominal GDP measures actual productivity
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14
, b) nominal GDP adjusts for inflation
c)real GDP adjusts for inflation
d) real GDP excludes imports and exports correct answer: c) real GDP adjusts for
inflation
5. A business cycle reflects changes in economic activity, particularly
real GDP. The stages of a business cycle in correct order are
correct answer:
a) trough, expansion, recession, peak
b) contraction, recession, expansion, boom
c)expansion, trough, recession, peak
d) expansion, peak, recession, trough correct answer: d) expansion, peak, recession,
trough
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14
