MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) When using the income approach to measure GDP, the largest share of GDP generally consists of: 1) A) labour income.
B) indirect taxes.
D) interest income.
E) capital income.
2) If nominal GDP rises from $40 trillion to $48 trillion, while the GDP deflator rises from 2.0 to 2.4, the percentage change in real GDP is:
A) 10%. B) 0%. C) 9.1%. D) -10%. E) 20%.
3) In a given year, suppose a company spends $200 million on intermediate goods and $400 million on wages, with no other expenses. Also assume that its total sales are $700 million. The value added by this company equals:
A) $500 million.
B) $200 million.
C) $400 million.
D) $300 million.
E) $100 million.
4) One of the reasons macroeconomists have concerns about inflation is that inflation causes: 4) A) real GDP to rise.
B) wages to rise as fast as prices.
C) real GDP to exceed nominal GDP.
D) relative prices to change.
E) nominal GDP to fall.
5) Changes in GDP in the short run are caused primarily by: 5) A) capital accumulation.
C) demand factors.
D) supply factors.
E) population growth.
6) A comparison of the average growth rates for the periods 1970-2006 and 1996-2006 for Australia indicates that:
A) the average growth rate has increased in the more recent period. B) the average growth rates have decreased.
C) the recent increase in average growth rates is due to the fact that Australia is a lucky country. D) the average growth rates are basically the same.
E) the recent increase in average growth rates is due to large increases in capital formation. 1
7) Economists have suggested that the relatively higher unemployment in Europe has been caused by which of the following?
A) relatively high unemployment benefits
B) inadequate macroeconomic policies
C) relatively high level of worker...