iClicker

Question 0

What happens to a country that produces a combination of goods that uses all of the resources available in economy?

Answer 0

C. Country’s operating on its PPF

Question 1

Which of the following questions can be answered using normative economic reasoning?

Answer 1

D. Should the college charge lower tuition to smarter students

Question 2

Household production and the underground economy:
A. Are fully accounted for in GDP figures gathered by the commerce department
B. Aren’t considered formal production of goods & services; therefore aren’t included in GDP accounting
C. Are important but unaccounted for in the Commerce Department’s estimate of GDP
D. Is irrelevant because it constitutes only a very small fraction of GDP for most countries

Answer 2

C. Are important but unaccounted for in the Commerce Department’s estimate of GDP

Question 3

Which of the following is counted in this year’s value of GDP?
A. The value of this year’s production added to the value of production in previous years
B. The value of new production added to the value of the goods resold this year
C. Only the value of this year’s production of goods & services
D. The value of this year’s production added to the value of goods & services produced last year

Answer 3

C. Only the value of this year’s production of goods & services

Question 4

Which of the following is included in the economist’s definition of investment?
A. The purchase of a machine, factory, or house
B. The purchase of a share of stock
C. The purchase of a rare coin or deposit in a savings account
D. All of the above

Answer 4

A. The purchase of a machine, factory, or house

Question 5

Which measure of GDP represents changes strictly in the quantity of good & services produced in the economy, not the prices?
A) nominal GDP
B) real GDP
C) the GDP measure that sums up the value of goods & services evaluated at current year prices
D) none of the above. All GDP measures represent changes in both prices & quantities

Answer 5

B) real GDP

Question 6

When a significant fraction of domestic production takes place in foreign-owned facilities, a countries difference between GDP & GNP is as follows:
A) GNP will be a more accurate measure of the level of production within the country’s borders
B) GDP will be much larger than GNP
C) GNP will be almost identical to GDP
D) GNP will be closer to zero

Answer 6

B) GDP will be much larger than GNP

Question 7

Which of the following refers to consumers buying other goods when the price of the good in question rises?
A. Law of demand
B. The substitution effect
C. The income effect
D. The term "ceteris paribus"

Answer 7

B. The substitution effect