Week 6 Quiz

  • Question 1

    2 out of 2 points

    Which of the following is included in the calculated Gross Domestic Product?

    Selected Answer:

    A local ice cream shop sells $17,000 worth of cones and sundaes on July 1.

    Answers:

    Farmer Charlie sells his second tractor to his son.

    Nancy buys a love seat and chair for $85 at the yard sale on the corner.

    A local ice cream shop sells $17,000 worth of cones and sundaes on July 1.

    Mr. King buys a used snow blower from his neighbor, Mrs. Queen.

  • Question 2

    0 out of 2 points

    Which is the best description GDP?

    Selected Answer:

    the value of all final goods and services produced anywhere in the world by a nation’s firms

    Answers:

    the sum of all currency and coins in circulation

    the value of all final goods and services produced by a government

    the value of all final goods and services produced anywhere in the world by a nation’s firms

    the value of all final goods and services produced domestically

  • Question 3

    2 out of 2 points

    Which of the following statements is true?

    Selected Answer:

    The expansions and contractions of real-world business cycles last varying lengths of time and often differ in magnitude.

    Answers:

    A depression is a mild and relatively brief recession.

    The expansions and contractions of real-world business cycles last varying lengths of time and often differ in magnitude.

    The timing of business fluctuations is regular and therefore easily predictable.

    During the contractionary phase of the business cycle, the rate of unemployment is generally quite low.

  • Question 4

    2 out of 2 points

    What is the difference between nominal GDP and real GDP?

    Selected Answer:

    Real GDP adjusts for inflation.

    Answers:

    Nominal GDP measures actual productivity.

    Nominal GDP adjusts for inflation.

    Real GDP adjusts for inflation.

    Real GDP excludes imports and exports.

  • Question 5

    2 out of 2 points

    On the demand side of GDP, consumption by _____________ is the largest component of GDP, accounting for about two-thirds of the GDP in any year.

    Selected Answer:

    households

    Answers:

    services

    businesses

    households

    government

  • Question 6

    2 out of 2 points

    For most high-income countries of the world, GDP _________________ over time.

    Selected Answer:

    has risen gradually

    Answers:

    has proven to be stable

    has risen gradually

    has declined slightly

    has sharply risen

  • Question 7

    2 out of 2 points

    Which of the following is included in Investment (I)?

    Selected Answer:

    the amount spent on new factories and machinery

    Answers:

    the amount spent on new factories and machinery

    the amount spent on stocks and bonds

    the amount spent on consumer goods that last more than a year

    the amount spent on purchases of art

  • Question 8

    2 out of 2 points

    ___________ is about two-thirds of the demand side of GDP, but it moves relatively little over time.

    Selected Answer:

    Consumption

    Answers:

    Government

    Consumption

    Investment

    Services

  • Question 9

    2 out of 2 points

    Which of these scenarios would be included in GDP?

    Selected Answer:

    fees charged for a stock broker’s services

    Answers:

    revenue from selling a four-year-old car

    fees charged for a stock broker’s services

    receipts from selling land

    value of a leaf-raking service provided by a 16-year-old as part of his chores

  • Question 10

    2 out of 2 points

    Which is now the largest single component of the supply side of GDP, representing over half of GDP?

    Selected Answer:

    Services

    Answers:

    Durable goods

    Services

    Nondurable goods

    Structures

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