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.