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Multiple Choice Quiz
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1
The size of the US economy as measured by GDP is:
A)The second largest economy in the world
B)The third largest economy in the world
C)Smaller than if measured by per capita GDP
D)The largest economy in the world
2
GDP measures:
A)The output of a country divided by the population.
B)The quantity of goods and services produced in a country in one year.
C)The dollar value of all goods and services produced within a nation's borders in a given time period
D)The dollar value of all goods and services produced by US firms anywhere in the world.
3
GDP per capita measures:
A)The quantity of goods each citizen receives in a country
B)The distribution of income in an economy
C)The dollar value of output divided by the population
D)The dollar value of output adjusted for inflation
4
Economic growth means:
A)That the dollar value of the output has risen
B)That per capita GDP has fallen
C)That the production possibilities curve has shifted outward
D)That the distribution of income has become more equal
5
In poor nations:
A)Population growth exceeds output growth
B)Per capita GDP is rising
C)The value of output increases every year
D)Population growth is less than output growth
6
The mix of output in the United States has:
A)Not changed substantially over the last 100 years
B)Shifted primarily from the production of goods to services
C)Shifted primarily from the production of services to goods
D)Seen a relative decline in service production
7
Which of the following is not a major user of production:
A)Consumers
B)Stock investors
C)Business investment
D)Foreign buyers
8
An example of a business investment good is:
A)A stock purchase
B)A purchase of a durable good, such as a refrigerator
C)A purchase of medical care
D)A purchase of a new piece of equipment
9
Government purchases are included in GDP:
A)Because it represents a demand for new products and services
B)Because it does include income transfers
C)Because it does not include all levels of government
D)Because it represents consumer spending
10
International trade allow countries to:
A)Import what they have a comparative advantage in
B)Export what they have a comparative advantage in and import goods which they do not produce as efficiently
C)Import products which they are unable to produce
D)Specialize in what they are relatively weak at producing
11
Productivity refers to:
A)The total quantity of goods a nation can produce
B)Whether a country is primarily capital intensive or labor intensive in production
C)The output per labor hour
D)How well each worker uses the machine they are working with
12
Investments in human capital include:
A)Purchases of new equipment
B)Spending on education and job training
C)Investments that humans make in the stock market
D)The labor that goes into producing housing
13
With technological advances:
A)A country moves from a point within the production possibilities curve to a point on the curve.
B)A country adds to its labor force
C)A country's capital stock decreases
D)A country can produce more output with fewer resources
14
Which of the following is a role for government in an economy?
A)Providing a legal framework
B)Preventing monopolies and ensuring competition
C)Protecting consumers and workers
D)All of the above
15
The top 20% of income earners:
A)Get nearly half of all income
B)Get nearly three fourths of all income
C)Earn over $200,000
D)Get 20% of the total income of the United States





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