CLEMSON MACROECONOMICS 2120 FINAL-
BAIER EXAM QUIZZES WITH VERIFIED
ANSWERS \ LATEST UPDATE .
Adam Smith's metaphor of the "Invisible hand" - Correct Answer -Leads to benefits to
society when institutions align the private interests with social interest.
Why do you think researchers sometimes find a positive relationship between the
unemployment rate and college enrollment rates? - Correct Answer -The opportunity cost of
attending college falls during recessions, leading to higher college enrollment rates
Gross Demestic Product (GDP) - Correct Answer -Best defined as the MARKET value of all
NEWLY PRODUCED goods and services that are produced WITHIN A COUNTRY'S
BORDERS.
Goods or services (produced in the current period) that is counted as part of GDP for this year
- Correct Answer --A new personal computer
-The tire you bought from Goodyear to put on your car
-Flour purchased to make cookies to give to your economics professor
-Ovens that are purchased and installed at Little John's Pizzeria
Intermediate goods - Correct Answer -Goods used in the production process
Investment - Correct Answer -The most volatile component of GDP
This summer you have a paid internship for Kia Motors in Canada. For which nation, are you
contributing to GDP? Assume you are a U.S. Citizen. - Correct Answer -Canada
What components of GDP are procyclical? - Correct Answer -Consumption, Investment, and
Imports
1
, Private spending on clothes, economic books, cell phone services and cable TV subscriptions
are counted as ___________. - Correct Answer -Consumption
What is a recession? - Correct Answer -A significant and widespread decline in real GDP and
rising unemployment
The difference between nominal GDP and real GDP is that nominal GDP... - Correct Answer
-measures a country's production of final goods and services at current prices, whereas real
GDP measure a country's production of final goods and services at fixed prices.
Adam, Jill, and Sash volunteered to paint at their community center. The center had already
purchased the painting materials for the project from the local hardware store last year. The
value of the community center's painting project... - Correct Answer -Will not be included in
this year's GDP even though productive activities are involved. (This is because the materials
were purchased last year and were included in last years GDP.)
In the National Spending Approach for calculating GDP, government purchases include what
government outlays? - Correct Answer -Purchase of a new automobile by the state
department.
Countries with higher levels of real per capita GDP tend to have... - Correct Answer --better
educational purposes
-longer life expectancy rates
Absolute Convergence - Correct Answer -Theory that states per capita GDP in poorer
countries will tend to grow faster than in richer countries.
If a nation doubles it's GDP per capita in 35 years, what is it's annual growth rate? - Correct
Answer -2 percent
Why are transfer payments not included as part of GDP? - Correct Answer -Counting transfer
payments constitutes double-counting when they are used to purchase final goods and
services.
Why do some economists think that GDP may overestimate the actual level of economic
activity in an economy? - Correct Answer -There is no negative adjustment for pollution.
2
BAIER EXAM QUIZZES WITH VERIFIED
ANSWERS \ LATEST UPDATE .
Adam Smith's metaphor of the "Invisible hand" - Correct Answer -Leads to benefits to
society when institutions align the private interests with social interest.
Why do you think researchers sometimes find a positive relationship between the
unemployment rate and college enrollment rates? - Correct Answer -The opportunity cost of
attending college falls during recessions, leading to higher college enrollment rates
Gross Demestic Product (GDP) - Correct Answer -Best defined as the MARKET value of all
NEWLY PRODUCED goods and services that are produced WITHIN A COUNTRY'S
BORDERS.
Goods or services (produced in the current period) that is counted as part of GDP for this year
- Correct Answer --A new personal computer
-The tire you bought from Goodyear to put on your car
-Flour purchased to make cookies to give to your economics professor
-Ovens that are purchased and installed at Little John's Pizzeria
Intermediate goods - Correct Answer -Goods used in the production process
Investment - Correct Answer -The most volatile component of GDP
This summer you have a paid internship for Kia Motors in Canada. For which nation, are you
contributing to GDP? Assume you are a U.S. Citizen. - Correct Answer -Canada
What components of GDP are procyclical? - Correct Answer -Consumption, Investment, and
Imports
1
, Private spending on clothes, economic books, cell phone services and cable TV subscriptions
are counted as ___________. - Correct Answer -Consumption
What is a recession? - Correct Answer -A significant and widespread decline in real GDP and
rising unemployment
The difference between nominal GDP and real GDP is that nominal GDP... - Correct Answer
-measures a country's production of final goods and services at current prices, whereas real
GDP measure a country's production of final goods and services at fixed prices.
Adam, Jill, and Sash volunteered to paint at their community center. The center had already
purchased the painting materials for the project from the local hardware store last year. The
value of the community center's painting project... - Correct Answer -Will not be included in
this year's GDP even though productive activities are involved. (This is because the materials
were purchased last year and were included in last years GDP.)
In the National Spending Approach for calculating GDP, government purchases include what
government outlays? - Correct Answer -Purchase of a new automobile by the state
department.
Countries with higher levels of real per capita GDP tend to have... - Correct Answer --better
educational purposes
-longer life expectancy rates
Absolute Convergence - Correct Answer -Theory that states per capita GDP in poorer
countries will tend to grow faster than in richer countries.
If a nation doubles it's GDP per capita in 35 years, what is it's annual growth rate? - Correct
Answer -2 percent
Why are transfer payments not included as part of GDP? - Correct Answer -Counting transfer
payments constitutes double-counting when they are used to purchase final goods and
services.
Why do some economists think that GDP may overestimate the actual level of economic
activity in an economy? - Correct Answer -There is no negative adjustment for pollution.
2
