The level of detail in an economic model
a. is as close as possible to the level of detail in reality
b. depends on the purpose of the model
c. is as complex as possible
d. is the same regardless of the purpose of the model
e. is as complex as possible to accomplish its purpose
Which of the following describes the relationship between net exports and imports?
a. Net exports = imports + exports
b. Net exports = exports – imports
c. Net exports = imports – exports
d. Imports = net exports – exports
e. Imports are not related to net exports
The U.S. system of national income accounts was started in the
a. late 1800s to measure the effects of rapid industrialization
b. mid-1910s to measure the effects of World War I on the economy
c. early 1930s to keep track of national income and output
d. early 1940s to keep track of output during World War II
e. early 1950s to measure changes in post-World War II output and income
In order to build a table, a furniture company buys $50 worth of wood from a lumber
company and $20 worth of hardware from a metal products firm. If the value added by
the furniture company is $200, what price would the table sell for according to the
value added approach to GDP?
a. $130
b. $150
c. $180
d. $200
e. $270
An example of a capital good is
a. food produced by U.S. farmers in 2008
b. the car that your friend drives to school
c. a house owned and occupied by a family
d. the rent your friend paid last year for a college apartment
e. a share of General Electric Company stock
In the short-run macro model, what is the relationship between income and government
purchases?
a. It is positive and stable.
b. It is positive but unstable.
c. It is negative and stable.
d. It is negative but unstable.
e. There is no relationship between the two variables.
The study of economics would be superfluous if __________ did not exist.
a. demand
b. capital
c. corporations
d. profit
e. scarcity
Assuming the economy was in equilibrium, use the following information to calculate
the total value of injections.
Total leakages are
a. $2.5 trillion
b. $2.7 trillion
c. $3.0 trillion
d. $5.2 trillion
e. $5.7 trillion
If U.S. GDP drops and South Korean GDP remains unchanged, which of the following
will happen in the Korean won market?
a. A rightward shift of the supply curve, a depreciation of the won, and a larger number
of won traded
b. A rightward shift of the demand curve, a depreciation of the won, and a smaller
number of won traded
c. A rightward shift of the demand curve, an appreciation of the won, and a larger
number of won traded
d. A leftward shift of the demand curve, a depreciation of the won, and a smaller
number of won traded
e. A leftward shift of the supply curve, an appreciation of the won, and a smaller
number of won traded.
If the economy is at potential output, the price level can continue to increase.