ECO 285 – Macroeconomics
Dr. D. Foster – Spring 2016
Homework #3 Take-home Quiz
20 true/false [This is an individual assignment – do your own work.]
1. As mentioned in the essay by Doug French, it was Murray Rothbard who created a system of national
accounts that we use today to measure our economic health and well-being.
2. French argues that building 2.4 million homes that nobody wants to buy is a signal of a worsening
economy despite what the official GDP figures show.
3. As noted on the Mises Wiki, when banks decide to offer free checking, it counts as zero value in the
measured GDP.
4. As noted in the Mises Wiki, Simon Kuznets believed that GDP was an excellent measure of the
welfare of a country.
5. While we use GDP as a measure of production, it is really a measure of overall spending.
6. From the chart showing “Real Gross Domestic Private Product, 2000-2012,” we can see that the top
three years over this span were 2012, 2011 and 2007.
7. Real Gross Domestic Private Product is derived by subtracting a small part of government spending
from GDP.
8. As pointed out by Batemarco, because government output is generally not sold on the market, we
cannot really accurately measure its value.
9. Rothbard’s Private Product Remaining per person employed (not by the government) in 1983 was
about the same as 1964.
10. Beachy and Zorn argue that we should be quite suspicious of GDP data by noting that the huge oil
spill in the Gulf of Mexico may well translate into a higher GDP for the U.S.
11. Beachy and Zorn contend that their new measures would better capture true economic progress
and that policymakers who use them can determine more comprehensive policy goals.
12. The G5 measure of a country’s general welfare and sustainability has the advantage of being able to
accurately measure the value of all the variables that make it up.
13. The National Welfare Index (NWI) seeks to generate a better measure of our welfare than does GDP
by subtracting out both environmental damage and the value of voluntary work.
14. Adjusted gross savings is cited as an example of an “enlarged GDP indicator.”
15. Mark Skousen notes that his alternative measure of economic production – Gross Output – is now
quite similar to a new measure coming out of the Bureau of Economic Analysis called Gross Domestic
Expenditures.
16. It can be confidently stated that Gross Domestic Expenditures will always be larger than GDP.
17. The GDE measure of aggregate economic activity measures the total spending at all stages of
production in one year.
18. As Stossel points out, one way in which the government can keep the costs of health care down is
to make people wait.
19. Stossel likens ObamaCare to a Lamborghini Aventador, which is pricy but extremely powerful
supercar.
20. Stossel relates the story of how police, with guns drawn, raided a store in search of raw milk.
ECO 285 – Macroeconomics
Dr. D. Foster – Spring 2016
Name:
Homework #3
Please use the following to record your answers and copy it in with your homework:
Quiz #3
1
6
11
16
2
7
12
17
3
8
13
18
4
9
14
19
5
10
15
20
Score:
100-120 word reaction essay to either Stossel Chapter 5 or Chapter 6:
Chapter:
Word count =
Essay: