PSU Econ 104 Final UPDATED ACTUAL
Questions and CORRECT Answers
Which of the following would be an example of a microeconomic issue? Select all that apply.
1. The federal government of Sweden offers tax credits for individuals to put solar paneling
on their homes.
2. Sandra takes out a loan to invest in a new business opportunity.
3. A local sandwich shop shuts down during a recession.
4. None of these are microeconomic issues. - CORRECT ANSWER- ✔✔1, 2, and 3
True or false: Macroeconomics is the study of the economy as a whole which includes topics
such as unemployment, inflation, and overall production. - CORRECT ANSWER- ✔✔True
True or false: Microeconomics is the study of the economy as a whole which includes topics
such as unemployment, inflation, and overall production - CORRECT ANSWER- ✔✔False
The inflation rate for a given year is measured by taking the: - CORRECT ANSWER-
✔✔Percentage change in the price level from the previous year
True or false: The official unemployment rate will never reach 0%. - CORRECT ANSWER-
✔✔True
During a recessionary period, the unemployment rate __________ and the total output and
production __________. - CORRECT ANSWER- ✔✔rises; falls
Which of the following is not one of the three main areas of macroeconomics mentioned in
this lesson?
Output and Production
Employment
Prices
Taxes - CORRECT ANSWER- ✔✔Taxes
,The Central Bank of the United States targets a __________ inflation rate. - CORRECT
ANSWER- ✔✔2%
True or false: The Federal Reserve Economic Database (FRED) began in the early 1990s. -
CORRECT ANSWER- ✔✔True
Which of the following can be done using the Federal Reserve Economic Database (FRED)?
Download economic data into a spreadsheet format
All of these are correct
Change economic data to represent percentage change over time
Access the source of where the economic data originated
View economic data graphically - CORRECT ANSWER- ✔✔All of these are correct
An intermediate good is a good that: - CORRECT ANSWER- ✔✔A good used in production
of a final good or service
Which of the folowing would be included in the United States GDP in 2019? - CORRECT
ANSWER- ✔✔A pair of jeans produced in the United States in 2019
The purchase of a new house would be counted under which component of GDP? -
CORRECT ANSWER- ✔✔Investment
Which of the following component of GDP can be negative?
consumption
investment
net exports
None of these can be a negative number
government purchases - CORRECT ANSWER- ✔✔Net exports
Consumption is the __________ component of GDP in the United States. - CORRECT
ANSWER- ✔✔largest
, Which of the following is a reason why GDP is not the perfect measure of production?
it does not include levels of pollution
it does not include health measures
it does not include household production
it does not include levels of inequality
all of these are reasons why the GDP is not a perfect measure of production - CORRECT
ANSWER- ✔✔it does not include household production
Which of the following is a reason why GDP is not the perfect measure of well-being in a
society?
it does not include the level of income inequality
it does not include the amount of leisure time people have on average
it does not include the level of pollution in society
all of these are reasons why GDP is not a perfect measure of economic well-being
it does not include health measures like life expectancy rates - CORRECT ANSWER- ✔✔all
of these are reasons why GDP is not a perfect measure of economic well-being
If prices steadily increase year over year, which of the following must be true?
Real GDP will always increase year over year.
Nominal GDP will always increase year over year.
Nominal GDP is higher than real GDP in years before the base year.
Real GDP is higher than nominal GDP in years after the base year.
None of these are correct - CORRECT ANSWER- ✔✔None of these are correct
If production and prices steadily increase year over year, which of the following must be
true?
Nominal GDP is higher than real GDP in years after the base year.
All of these are correct.
Nominal GDP will always increase year over year.
Real GDP is higher than nominal GDP in years before the base year.
Real GDP will always increase year over year. - CORRECT ANSWER- ✔✔All of these are
correct.
Questions and CORRECT Answers
Which of the following would be an example of a microeconomic issue? Select all that apply.
1. The federal government of Sweden offers tax credits for individuals to put solar paneling
on their homes.
2. Sandra takes out a loan to invest in a new business opportunity.
3. A local sandwich shop shuts down during a recession.
4. None of these are microeconomic issues. - CORRECT ANSWER- ✔✔1, 2, and 3
True or false: Macroeconomics is the study of the economy as a whole which includes topics
such as unemployment, inflation, and overall production. - CORRECT ANSWER- ✔✔True
True or false: Microeconomics is the study of the economy as a whole which includes topics
such as unemployment, inflation, and overall production - CORRECT ANSWER- ✔✔False
The inflation rate for a given year is measured by taking the: - CORRECT ANSWER-
✔✔Percentage change in the price level from the previous year
True or false: The official unemployment rate will never reach 0%. - CORRECT ANSWER-
✔✔True
During a recessionary period, the unemployment rate __________ and the total output and
production __________. - CORRECT ANSWER- ✔✔rises; falls
Which of the following is not one of the three main areas of macroeconomics mentioned in
this lesson?
Output and Production
Employment
Prices
Taxes - CORRECT ANSWER- ✔✔Taxes
,The Central Bank of the United States targets a __________ inflation rate. - CORRECT
ANSWER- ✔✔2%
True or false: The Federal Reserve Economic Database (FRED) began in the early 1990s. -
CORRECT ANSWER- ✔✔True
Which of the following can be done using the Federal Reserve Economic Database (FRED)?
Download economic data into a spreadsheet format
All of these are correct
Change economic data to represent percentage change over time
Access the source of where the economic data originated
View economic data graphically - CORRECT ANSWER- ✔✔All of these are correct
An intermediate good is a good that: - CORRECT ANSWER- ✔✔A good used in production
of a final good or service
Which of the folowing would be included in the United States GDP in 2019? - CORRECT
ANSWER- ✔✔A pair of jeans produced in the United States in 2019
The purchase of a new house would be counted under which component of GDP? -
CORRECT ANSWER- ✔✔Investment
Which of the following component of GDP can be negative?
consumption
investment
net exports
None of these can be a negative number
government purchases - CORRECT ANSWER- ✔✔Net exports
Consumption is the __________ component of GDP in the United States. - CORRECT
ANSWER- ✔✔largest
, Which of the following is a reason why GDP is not the perfect measure of production?
it does not include levels of pollution
it does not include health measures
it does not include household production
it does not include levels of inequality
all of these are reasons why the GDP is not a perfect measure of production - CORRECT
ANSWER- ✔✔it does not include household production
Which of the following is a reason why GDP is not the perfect measure of well-being in a
society?
it does not include the level of income inequality
it does not include the amount of leisure time people have on average
it does not include the level of pollution in society
all of these are reasons why GDP is not a perfect measure of economic well-being
it does not include health measures like life expectancy rates - CORRECT ANSWER- ✔✔all
of these are reasons why GDP is not a perfect measure of economic well-being
If prices steadily increase year over year, which of the following must be true?
Real GDP will always increase year over year.
Nominal GDP will always increase year over year.
Nominal GDP is higher than real GDP in years before the base year.
Real GDP is higher than nominal GDP in years after the base year.
None of these are correct - CORRECT ANSWER- ✔✔None of these are correct
If production and prices steadily increase year over year, which of the following must be
true?
Nominal GDP is higher than real GDP in years after the base year.
All of these are correct.
Nominal GDP will always increase year over year.
Real GDP is higher than nominal GDP in years before the base year.
Real GDP will always increase year over year. - CORRECT ANSWER- ✔✔All of these are
correct.
