ECONOMICS 353 (SECTION 2) L. Tesfatsion/Spring 01
EXERCISE SET 1: 5 POINTS TOTAL DUE: Tuesday, January 23, 2:10 P.M.
*IMPORTANT REMINDER: LATE ASSIGNMENTS CANNOT BE ACCEPTED -- NO EXCEPTIONS*
*NOTE:* Please FILL IN YOUR NAME, BIRTH DATE, AND ID (SOC SEC) No. on Side 1
of a BROWN bubble sheet and write "353 SECTION 2-EXERCISE SET 1" in the top
margin of Side 1. Use a #2 pencil to MARK YOUR ANSWERS on Side 1 of the
bubble sheet to the following five multiple choice questions:
1-2. Nominal GDP (gross domestic product) for the United States in year
2000 is a measure of the
A A. total value of final goods and services newly produced within the
borders of the U.S. in 2000, measured in year 2000 prices.
B. total value of final goods and services newly produced in 2000
using U.S.-owned assets, measured in year 2000 prices.
C. total value of final goods and services newly produced within the borders
of the U.S. in 2000, measured in prices for some fixed base year.
D. total value of all financial assets existing in the U.S. in 2000,
measured in year 2000 prices.
2-2. The U.S. Consumer Price Index (CPI) for year 2000 is a measure of
A. the inflation-adjusted value of the U.S. nominal GDP level in 2000.
B. the average price of the goods and services included in U.S. GDP in 2000.
C C. the value of a basic basket of goods and services bought by a
typical U.S. urban household in 2000.
D. the sum of prices for the goods and services included in U.S. GDP in 2000.
3-2. A business cycle is a record of the
A. currently hottest trends in consumer purchases.
B. duration of a company from its founding date to its dissolution date.
C C. recurrent fluctuations that occur in time series data for key macro
variables such as real GDP.
D. average duration of product cycles, from introduction to obsolescence.
E. None of the above.
4-2. Evidence from the U.S. and from other countries indicates that
A. there is a strong negative correlation between the average inflation
rate and the average money growth rate -- that is, when one
is high, the other tends to be low, and vice versa.
B. there is a strong positive correlation between the average inflation
rate and the average money growth rate -- that is, when one
is high, the other tends to be high as well.
C. the average inflation rate is unrelated to the average money growth rate.
D. the average price level and the money supply (M2) tend to move closely
together.
E E. Only B and D are true.
5-2. With regard to the United States, at the Federal government level
A. the current government budget deficit is an important political issue.
B B. the use of the current and projected government budget surpluses
is an important political issue.
C. government budget deficits have always been a short-term problem.
D. government budget deficits only exist in time of recession.
E. None of the above.
