Exam

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Macroeconomics is the study of ________. 1)

A) various political groups within an economy
B) the choices made by individuals in an economy
C) the statistical methods used in economics
D) economic aggregates and the economy as a whole

2) Which of the following is an example of a macroeconomic aggregate? 2)

A) The annual inflation rate in an economy B) The profit earned by an entrepreneur
C) The income earned by a household D) The total cost incurred by a firm

3) An macroeconomics class is likely to discuss ________. 3)

A) the annual growth rate of an economy's output
B) the average revenue and cost curves of a firm
C) the relationship between the utility derived from a good and the number of units consumed
D) the relationship between the price of a good and its quantity demanded

4) ________ is the market value of the final goods and services produced in a country during a 4)
particular period of time.
A) Net product value B) GNP
C) Total product D) GDP

5) Which of the following is likely to be included in a country's GDP for a particular year? 5)
A) An unsold inventory of automobiles produced in that year
B) The total amount of flour used by bakeries to make bread in that year
C) An unused stock of goods produced in the previous year
D) The total amount of steel used in the production of automobiles in that year

6) There is only one firm in a small island country. The firm produced 1,000 units of Good X during a 6)
particular year, out of which it could sell 900 units. If each unit of the good sells for $500, what is
the GDP of the country?
A) $450,000 B) $150,000 C) $40,000 D) $500,000

7) Which of the following is omitted in the calculation of GDP? 7)

A) Export of goods B) Physical capital depreciation
C) Interest paid on bank deposits D) Pension paid to retired workers

8) A shoe retailer does not give a bill for shoes purchased from her store and does not report her 8)
income correctly to evade taxes. If she is paid $50, ________.
A) the GDP of her country will remain unchanged
B) the GDP of her country will fall
C) the GDP of her country will increase
D) the trade surplus of her country will increase

1
 9) ________ is the total value of final goods and services produced within the borders of a country, 9)
using market prices from a specific base year to determine the value of each unit that is produced.
A) Total product B) Real GDP C) GNP D) Nominal GDP

10) The GDP deflator is 100 times the ratio of ________. 10)
A) GDP to GNP B) nominal GDP to real GDP
C) real GDP to nominal GDP D) GNP to GDP

2
Answer Key
Testname: UNTITLED1

1) D
2) A
3) A
4) D
5) A
6) D
7) B
8) A
9) B
10) B