AP Macroeconomics Unit 2 Progress Check: MCQ Exam Questions And Answers
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AP Macroeconomics Unit 2 Progress Check: MCQ
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AP Macroeconomics Unit 2 Progress Check: MCQ
AP Macroeconomics Unit 2 Progress Check: MCQ Exam Questions And Answers
Which statement is true about the circular flow diagram of an economy?
A) The market for goods and services connects household spending to government spending.
B) The market for factors of production connects household spe...
Which statement is true about the circular flow diagram of an economy?
A) The market for goods and services connects household spending to government
spending.
B) The market for factors of production connects household spending to goods
produced by firms.
C) The market for factors of production connects spending by firms to household
income.
D) The market for goods and services connects labor income to firms as employers.
E) The market for goods and services connects labor income to household spending. -
Answer-C) The market for factors of production connects spending by firms to
household income.
Correct. The market for factors of production connects spending by firms to household
income.
Which statement is true about the approaches used to measure the value of a nation's
gross domestic product (GDP) ?
A) The expenditure approach to calculating GDP sums the components of the supply
side of the economy.
B) The income approach to calculating GDP sums the income earned by the factors of
production excluding profits.
C) The value-added approach to calculating GDP sums the final monetary value of
output at each stage of production.
D) The expenditure approach to calculating GDP sums the market value of all final
goods and services produced by foreigners in a given period of time.
E) The expenditure approach to calculating GDP sums consumption spending,
investment spending, government spending, and net exports. - Answer-E) The
expenditure approach to calculating GDP sums consumption spending, investment
spending, government spending, and net exports.
Correct. The expenditure approach to calculating GDP sums the components of the
demand side of the economy - consumption spending, investment spending,
government spending, and net exports.
Calculate Country X's nominal gross domestic product (GDP) for 2017 using the
expenditures approach.
A) 14 billion dollars
B) 18 billion dollars
Correct. The expenditure approach to calculating GDP sums consumption spending,
government spending, investment spending, and net exports. Using the numbers
provided in the table, the country's nominal GDP for 2017 is therefore 13+3+4+(−1)=19
billion dollars.
Which of the following describes a limitation of gross domestic product (GDP) ?
A) It overstates the value of output by counting non-market transactions such as
mowing your neighbor's lawn.
B) It understates the value of output by accounting for negative environmental side
effects of production.
C) It does not account for the distribution of income in a nation or income inequality.
D) It overstates economic well-being by including all do-it-yourself activities.
E) It fails to make adjustments for the value of services consumed for free such as
browsing on the Web. - Answer-C) It does not account for the distribution of income in a
nation or income inequality.
Correct. GDP measures the final output produced by a nation but does not account for
the distribution of income or income inequality
Which of the following is true about gross domestic product (GDP)?
A) Calculations of GDP include the monetary value of non-market production activities
such as households preparing own meals at home.
B) Calculations of GDP do not include the monetary value of production activities
involving negative environmental side effects such as pollution.
C) Calculations of GDP include the monetary value of illegal production activities such
as drug cartels.
D) Calculations of GDP include the sale of used goods.
E) Calculations of GDP include the unsold inventories of goods produced within the
borders of the country. - Answer-E) Calculations of GDP include the unsold inventories
of goods produced within the borders of the country.
Correct. The calculations of GDP do include the unsold inventories of goods produced
within the borders of the country because these goods were produced during the year.
As a measure of economic performance, the United States gross domestic product
(GDP) accounts for which of the following?
A) The use of open-source, free Web browsers
B) A parent's care of children in the home
C) The street sale of illegal substances
D) The cleanup of an oil spill
E) The production of vegetables grown in the backyard and consumed by the family -
Answer-D) The cleanup of an oil spill
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