Question 1 of 10               0.0/ 10.0 Points

Economics is best defined as the study of

 A.financial decision-making

 B.how consumers make purchasing decisions.

 C.choices made by people faced with scarcity.

 D.inflation, unemployment, and economic growth

Question 2 of 10               10.0/ 10.0 Points

Macroeconomics differs from microeconomics in that

 A.macroeconomics is the study of individual markets, while microeconomics deals with the nation’s economy as a whole.               

 B.microeconomics is the study of individual markets, while macroeconomics deals with the nation’s economy as a whole.               

 C.macroeconomics focuses principally on social and political issues, while microeconomics involves the study of a nation’s monetary system.          

 D.microeconomics focuses principally on social and political issues, while macroeconomics involves the study of a nation’s monetary system.

Question 3 of 10               10.0/ 10.0 Points

Gross domestic product calculations count only final goods and services because

 A.these are the only goods and services that are purchased in an economy.

 B.counting all goods and services would lead to double-counting of many activities.       

 C.it is difficult to measure the prices of intermediate goods produced.

 D.one cannot calculate the quantities of intermediate goods produced.

Question 4 of 10               10.0/ 10.0 Points

Gross investment is

 A.what is left over from total new private investment after depreciation.

 B.the total amount of private investment purchases, whether new or previously-existing.

 C.the total amount of new private investment purchases.

 D.the wear and tear on private investment.

Question 5 of 10               10.0/ 10.0 Points

Depreciation is

 A.what is left over from total new private investment after use for a year.

 B.the total amount of private investment purchases, whether new or previously-existing.

 C.the total amount of new private investment purchases.

 D.the wear and tear on private investment.

Question 6 of 10               10.0/ 10.0 Points

Transfer payments are excluded from government purchases in GDP accounting because

 A.they are difficult to measure.

 B.they are a reward to individuals who have been productive their entire lives.

 C.they are already included as part of investment.

 D.nothing is being produced in return for the payment.

Question 7 of 10               10.0/ 10.0 Points

A trade surplus occurs when

 A.a country purchases more from abroad than other countries purchase from it.

 B.a country sells more abroad than it purchases from abroad.

 C.a country’s firms open more stores abroad than foreign firms open in the country.

 D.foreign firms open more stores in a country than the country opens in foreign countries.

Question 8 of 10               10.0/ 10.0 Points

A firm’s value added can be measured as the value of its

 A.profits.

 B.purchases of inputs from other firms.

 C.total sales.

 D.total sales, less purchases from other firms.

Question 9 of 10               0.0/ 10.0 Points

GDP understates the value of output produced by an economy because it

 A.includes transactions that do not take place in organized markets, such as home-cooked meals.          

 B.excludes value added from the underground economy, such as tips taken “under the table.”               

 C. includes environmental degradation caused by increased output production.

 D.excludes the value of the wages and benefits of government employees.

Question 10 of 10             10.0/ 10.0 Points

One of the flaws of GDP is that it

 A.includes only transactions that take place in formal businesses.

 B.ignores transactions that do not take place in organized markets.

 C.includes measures of the underground economy.

 D.includes measures of changes of quality of life associated with producing output.