Principles of Macroeconomics International Edition 9th Edition – Test Bank

a.

only the total amount of profits made by the business firms.

b.

the total value of all inputs used in production.

c.

government budget surplus and deficit.

d.

the net exports of a nation.

e.

the output of an entire economy.

a.

a set of rules used to summarize economic activity over a given period of time.

b.

a method for comparing different political systems.

c.

a microeconomic model of the economy used by the Federal Reserve bank.

d.

a statistical measure of the income received by consumers as opposed to businesses.

e.

a standardized economic report authored by politicians.

a.

National income accounting measures only the flow of output between the different sectors of the economy.

b.

National income accounting summarizes the level of production in an economy over a decade.

c.

National income accounting explains diagrammatically the flows of goods and services and of money expenditures (income).

d.

National income accounting summarizes and categorizes the productive activity in an economy over a year.

e.

National income accounting measures the total money supply in the economy.

a.

Purchase of a 2004 model Volkswagen sedan in 2010

b.

Swapping of baseball cards between two college students

c.

Car repairs done by a person on his/her own

d.

Fresh lemonade sold at a local diner

e.

A lamp sold at a garage sale

a.

The sale of a used car to an auto dealer

b.

Bartering lawn care services for car washes

c.

A father staying at home to attend to his child

d.

The sale of an illegal cable box

e.

Payment made for a SAT preparation class

a.

results in an overstatement of actual income and production in the national accounting system.

b.

consists of unrecorded cash transactions.

c.

is estimated and included in the national income accounting system.

d.

poses no problem for the measurement of gross domestic product.

e.

does not affect GDP but is included in the value-added computations.

a.

Vegetables grown and consumed by a nonfarm family

b.

The purchase of a new Porsche

c.

The sale of meat at the local grocery store

d.

The government purchased of an F-14 fighter plane

e.

The payment made to an accountant for the preparation of tax forms

a.

GDP would be understated.

b.

GDP would act as a true indicator of economic welfare.

c.

there would be double-counting.

d.

there would be undercounting.

e.

GDP would be able to give a clearer picture of the economy.

a.

The value of oregano used as a seasoning for pizzas

b.

The crops consumed by a farmer’s family members

c.

The present value of a car produced a couple of years before

d.

A clunker sold during the current year

e.

The value of an antique piece of jewelry handed down over generations in a family