Question : 12.1   Gross Domestic Product Measures Total Production 1) In May 2009, : 1266879

12.1   Gross Domestic Product Measures Total Production

1) In May 2009, Ford Motor Company’s sales were down 20 percent from a year earlier. These events were caused by

A) an economic recession.

B) an economic expansion.

C) a reduction in advertising.

D) declining quality of service.

2) In May 2009, the U.S. auto industry experienced a 34 percent decline in sales compared to May 2008. The automobile industry was experiencing the effects of

A) deflation.

B) the underground economy.

C) the business cycle.

D) depreciation.

3) During a business cycle expansion, total production ________ and total employment ________.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

4) Macroeconomics, as opposed to microeconomics, includes the study of what determines the level of

A) employment in a specific industry.

B) employment in the economy.

C) output of a specific firm.

D) output of a specific industry.

5) Macroeconomics, as opposed to microeconomics, includes the study of what determines the

A) average price levels of goods and services in the economy.

B) price charged for laptop computers by Dell.

C) wages paid to employees by Dell.

D) quantity of Dell employees.

6) Macroeconomics seeks to understand

A) economic growth, business cycles, and inflation.

B) industry sales, marketing strategies and corporate growth.

C) product demand, product cost, and profit maximization.

D) public choices, private choices, and consumer maximization.

7) Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study?

A) Avocado prices rise due to a late frost in California.

B) The United Auto Workers sign a contract raising wages and benefits 7% over the next 3 years.

C) Real GDP grows by 2.3% in the second quarter.

D) Airlines raise ticket prices in response to rising fuel costs.

8) In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced.  This means that the BEA

A) simply counts the total number of goods produced in the market place and then adds them up.

B) values goods at their market prices, multiplies them by the quantity produced, and then adds them up.

C) simply counts the total number of goods and services produced in the marketplace and then adds them up.

D) values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.

9) Suppose, in 2012, you purchased a house built in 2003. Which of the following would be included in the gross domestic product for 2012?

A) the value of the house in 2012

B) the value of the house in 2003

C) the value of the house in 2012 minus depreciation

D) the value of the services of the real estate agent

10) Gross domestic product is calculated by summing up

A) the total quantity of goods and services in the economy.

B) the total quantity of goods and services produced in the economy during a period of time.

C) the total market value of goods and services in the economy.

D) the total market value of final goods and services produced in the economy during a period of time.