APU ECO102 QUIZ 1

Question 1 of 10
10.0/
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
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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
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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
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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
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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
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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
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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
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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.