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Econ 202 Quiz 1-9 Questions with Correct Answers
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Econ 202 Quiz 1-9 Questions with Correct Answers
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Econ 202 Quiz 1-9 Questions with Correct AnswersOver the course of the business cycle, which of the following statements
is true about the behavior of output, employment and prices? Correct
Answer-Output, employment and prices all rise during the upturn and
they all fall during the downturn.
What are the triggers that send an economy down from the peak of a
cycle and up from the trough of a cycle? Correct Answer-At the peak of
a cycle, lack of demand for new capital reduces employment in the
capital goods sector; and in the trough of a cycle, demand for
replacement capital increases employment again in the capital goods
sector
Which of the following statements about Business Cycles is true?
Correct Answer-Business Cycles occur only in capitalized
(industrialized) economies
Business cycles are a demand-side phenomenon. What demand is
shifting over the cycle? Correct Answer-Demand for investment
What is the difference between nominal GDP and real GDP? Correct
Answer-Nominal GDP is Gross Domestic Product calculated at the
current year's prices, while real GDP shows the value of the same
amount of goods at prices which prevailed in some earlier base year
What is the definition of GDP? Correct Answer-Total value of goods
and services provided in a geographic area (country) in one year
,Using the following table, calculate the growth rate in nominal GDP
from 2000 to 2001:
Year 2000 2001
Nominal GDP $14.2 billion $14.7 billion Correct Answer-[$14.7 -
$14.2] ÷ $14.2 = 0.035 or 3.5% Nominal Growth
What is the "newspaper" definition of a recession? Correct Answer-Two
successive quarters of negative real growth
Which of the following things would not be included in calculating the
GDP? Correct Answer-Child care in the home
Cable service stolen by hooking into your neighbor's cable connection
Sales of stock and bonds in the financial markets
!!!None of these would be included in a calculation of GDP
If GDP is measured by the Expenditures method, which of the following
accounts would we expect to see summed together? Correct Answer-
Consumption, Investment, Government Expenditures, and Net Exports
, In national income accounting, we remove Capital Consumption
Allowance (depreciation) from our measure so that we can distinguish
between investment in both new capital and replacement capital, and
investment in new capital alone. Which of the following describes the
accounts that are involved? Correct Answer-Depreciation is subtracted
from Gross Domestic Product to give us Net Domestic Product. This
corresponds to the difference between Gross Investment and Net
Investment.
In national income accounting, the last account represents the money
that an individual takes home in their pocket, after all sources of foreign
income are counted, after all forced saving for the future is taken out,
and after income taxes have been paid. What is the name of that "bottom
line" account? Correct Answer-Disposable Income
Of the answer choices below, which are the four adjustments made to
GDP to allow determination of Disposable Income Correct Answer-
Capital Consumption Allowance is removed
Earnings/profits are repatriated to the country where they are received
Income earned in a previous time period but received now is added in;
income earned now but not received until the future is removed
Personal Income taxes are taken out
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