ECON 2120 CLEMSON LATEST
EXAM 1
________ is most likely to contribute to an improvement in our living
standard. - ANSWERS-An increase in real GDP
Nominal GDP measures the value of goods and services produced in a
given year valued using - ANSWERS-prices of the same year.
An increase in nominal GDP could result from an increase in
i. production.
ii. prices.
iii. subsidies. - ANSWERS-i and ii
Bobby was researching the economic growth of a country between 2006
and 2011. Using 2006 as the base year, he calculated a twelve percent
increase for real GDP and a ten percent increase for nominal GDP. His
results indicate that - ANSWERS-the quantity of goods and services
produced increased and prices decreased over the period.
Suppose GDP is $10 billion, consumption expenditure is $7 billion,
investment is $2 billion, and government expenditure on goods and
services is $2 billion. Net exports of goods and services must be -
ANSWERS--$1 billion.
END OF
PAGE
1
, ECON 2120 CLEMSON LATEST
EXAM 1
Over the business cycle, - ANSWERS-real GDP fluctuates around its
trend.
The U.S. economy is experiencing falling output, falling employment,
falling incomes and rising unemployment. These conditions best
describe a business cycle - ANSWERS-recession.
Which of the following describe the United States economy in 2008 and
the start of 2009? - ANSWERS-The economy was in a recession.
Goods and services such as environmental quality, leisure time, and
household production are not included in GDP because they are not -
ANSWERS-bought in markets.
The calculation of GDP excludes the value of - ANSWERS-a family
member painting the family home.
An example of household production excluded from GDP is -
ANSWERS-tree trimming you provide at your parents' home.
END OF
PAGE
2
, ECON 2120 CLEMSON LATEST
EXAM 1
Instead of taking the dirty laundry with you when you go back to visit
your parents, you use a Laundromat. Your use of the Laundromat means
that - ANSWERS-what you paid for use of the Laundromat will be
included in GDP.
Leisure time is ignored when calculating GDP because leisure time -
ANSWERS-is not bought in a market.
Which of the following goods and services are omitted from GDP? -
ANSWERS-household production
You hire some of your friends to help you move to a new house. You
pay them a total of $200 and buy them dinner at Pizza Hut. Which of the
following is true? - ANSWERS-If your friends do not report the $200 on
their tax forms, it becomes part of the underground economy.
Scarcity exists because - ANSWERS-human wants exceed the resources
available to satisfy them.
Because human wants are insatiable and unlimited while available
resources are limited, people are said to face the problem of -
ANSWERS-scarcity.
END OF
PAGE
3
EXAM 1
________ is most likely to contribute to an improvement in our living
standard. - ANSWERS-An increase in real GDP
Nominal GDP measures the value of goods and services produced in a
given year valued using - ANSWERS-prices of the same year.
An increase in nominal GDP could result from an increase in
i. production.
ii. prices.
iii. subsidies. - ANSWERS-i and ii
Bobby was researching the economic growth of a country between 2006
and 2011. Using 2006 as the base year, he calculated a twelve percent
increase for real GDP and a ten percent increase for nominal GDP. His
results indicate that - ANSWERS-the quantity of goods and services
produced increased and prices decreased over the period.
Suppose GDP is $10 billion, consumption expenditure is $7 billion,
investment is $2 billion, and government expenditure on goods and
services is $2 billion. Net exports of goods and services must be -
ANSWERS--$1 billion.
END OF
PAGE
1
, ECON 2120 CLEMSON LATEST
EXAM 1
Over the business cycle, - ANSWERS-real GDP fluctuates around its
trend.
The U.S. economy is experiencing falling output, falling employment,
falling incomes and rising unemployment. These conditions best
describe a business cycle - ANSWERS-recession.
Which of the following describe the United States economy in 2008 and
the start of 2009? - ANSWERS-The economy was in a recession.
Goods and services such as environmental quality, leisure time, and
household production are not included in GDP because they are not -
ANSWERS-bought in markets.
The calculation of GDP excludes the value of - ANSWERS-a family
member painting the family home.
An example of household production excluded from GDP is -
ANSWERS-tree trimming you provide at your parents' home.
END OF
PAGE
2
, ECON 2120 CLEMSON LATEST
EXAM 1
Instead of taking the dirty laundry with you when you go back to visit
your parents, you use a Laundromat. Your use of the Laundromat means
that - ANSWERS-what you paid for use of the Laundromat will be
included in GDP.
Leisure time is ignored when calculating GDP because leisure time -
ANSWERS-is not bought in a market.
Which of the following goods and services are omitted from GDP? -
ANSWERS-household production
You hire some of your friends to help you move to a new house. You
pay them a total of $200 and buy them dinner at Pizza Hut. Which of the
following is true? - ANSWERS-If your friends do not report the $200 on
their tax forms, it becomes part of the underground economy.
Scarcity exists because - ANSWERS-human wants exceed the resources
available to satisfy them.
Because human wants are insatiable and unlimited while available
resources are limited, people are said to face the problem of -
ANSWERS-scarcity.
END OF
PAGE
3
