When maximizing economic growth is a country's goal:

When maximizing economic growth is a country's goal: 

A. it may work in opposition to the country's happiness in terms of satisfaction gained from leisure.

B. it increases the correlation to the country's happiness, because more money makes people happier.

C. it creates a perfect correlation to happiness, if the money is allocated fairly.

D. None of these statements is true.

Answer: A

GDP per capita:

GDP per capita: 

A. is highly correlated with quality of life.

B. is perfectly correlated with quality of life.

C. is loosely correlated with quality of life.

D. is negatively correlated with quality of life.

Answer: A

Which of the following measures can give some indication of the quality of life in an economy?

Which of the following measures can give some indication of the quality of life in an economy? 

A. Child mortality

B. Literacy rates

C. Life expectancy

D. All of these are measures used to assess quality of life.

Answer: D

The Green GDP:

The Green GDP: 

A. tries to capture the environmental effects regular GDP doesn't.

B. subtracts the environmental costs of production from the positive outputs normally counted in GDP.

C. values negative externalities.

D. All of these statements are true.

Answer: D

An example of a negative externality is:

An example of a negative externality is: 

A. pollution.

B. toxic waste disposal.

C. a nuclear power plant.

D. All of these are examples of negative externalities.

Answer: A

Negative externalities:

Negative externalities: 

A. can be thought of as "negative output."

B. are final "goods" that do harm to people.

C. are not included in GDP.

D. All of these statements are true.

Answer: D

The size of the underground economy is larger when:

The size of the underground economy is larger when: 

A. the cost of doing business legally is high.

B. bribes are often necessary to cut through bureaucratic red tape.

C. taxes are extremely high.

D. All of these statements are true.

Answer: D

In the United States the underground economy has been valued at around:

In the United States the underground economy has been valued at around: 

A. 7 percent or 8 percent of GDP.

B. 2 percent or 3 percent of GDP.

C. 5 percent to 6 percent of GDP.

D. 9 percent to 10 percent of GDP.

Answer: A

On average across the world, the underground economy is worth about

On average across the world, the underground economy is worth about 

A. one-third of GDP.

B. one-tenth of GDP.

C. one-quarter of GDP.

D. one-half of GDP.

Answer: A

The difference between black market and gray market activities is:

The difference between black market and gray market activities is: 

A. while neither are included in GDP, black market items are illegal and gray market items are not.

B. while neither are include in GDP, gray market items are illegal and black market items are not.

C. black market items are very rare and difficult to find, and gray market items are more commonplace, like babysitting.

D. black market items are typically expensive items, and gray market items are not.

Answer: A

The many goods and services that are sold below the radar, outside of official records take place in the:

The many goods and services that are sold below the radar, outside of official records take place in the: 

A. underground economy.

B. soft market.

C. illegal economy.

D. None of these statements is true.

Answer: A

An example of something that might be sold in the underground economy is:

An example of something that might be sold in the underground economy is: 

A. lawn-mowing services.

B. endangered animals.

C. baby-sitting services.

D. All of these are exchanged in the underground economy.

Answer: D

Which of the following activities would be included in GDP?

Which of the following activities would be included in GDP? 

A. You buy a cake from a local bakery for $30.

B. You pay a friend $30 to bake a cake.

C. You bake a cake for yourself.

D. All of these would be included in GDP.

Answer: A

Which of the following activities would be included in GDP?

Which of the following activities would be included in GDP? 

A. You hire a cleaning service at $40 to clean your house.

B. Your roommate pays you $40 to clean the house.

C. Your parents send you $40 to hire a house cleaner, and you clean the house and keep the $40 yourself.

D. All of these would be included in GDP, since there was a monetary exchange.

Answer: A

An activity that would not be included in GDP would be:

An activity that would not be included in GDP would be: 

A. a sweater you knit for your roommate for her birthday.

B. getting tomatoes from your garden and making salsa with them.

C. cleaning your house.

D. None of these would be included in GDP.

Answer: D

A major category of economic activity that is not counted as part of GDP is:

A major category of economic activity that is not counted as part of GDP is: 

A. home production.

B. the underground economy.

C. non market externalities such as environmental degradation.

D. All of these are not included in GDP.

Answer: D

Of the world's countries, which of the following can be said of their real GDP growth rates in recent years?

Of the world's countries, which of the following can be said of their real GDP growth rates in recent years? 

A. Countries like China and the Middle East have experienced higher rates of growth than the U.S.

B. The U.S. has consistently had the highest growth rate in the world for many years.

C. Neither of these statements is true.

D. Both of these statements are true, since the U.S. was highest until 2010, when China surpassed it.

Answer: A

The government office that declares official periods of recession and depression is the:

The government office that declares official periods of recession and depression is the: 

A. National Bureau of Economic Research.

B. Bureau of Labor Statistics.

C. Congressional Budget Office.

D. Federal Reserve Board.

Answer: A

A depression is:

A depression is: 

A. a severe and extended period of recession.

B. a recession that lasts more than four quarters.

C. a recession that lasts more than three quarters.

D. a recession that lasts more than eight quarters.

Answer: A

A recession is characterized by:

A recession is characterized by: 

A. a period of significant decline in economic activity.

B. falling GDP.

C. increasing unemployment.

D. All of these statements are true.

Answer: D