ECON Macro Measures

Which of the following best represents the expenditure approach for computing GDP?

GDP = C + I + G + X - IM

Shoe-leather costs refer to the:

increased cost of transactions due to inflation.

When inflation rises quickly:

lenders will be hurt and borrowers will benefit.

Deflation is when there is:

a decreasing aggregate price level.

Inflation is when there is:

a rising aggregate price level.

The unemployment rate is defined as:

the percentage of the labor force that is unemployed.

Employment in the labor force is defined as:

the total number of persons actively working.

The labor force is defined as:

the total of the persons employed and unemployed.

GDP is the:

total market value of all final goods and services produced in one year.

Use Table 11-2. The value of Year 2's output in real dollars is:

$15.

Use Table 11-2. The value of Year 4's output in nominal dollars is:

$36.

A minimum wage of $7.25 per hour might cause structural unemployment if the equilibrium wage in that labor market is:

$6.85.

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

10%.

Use Table 15-1. The approximate annual rate of inflation from Year 4 to Year 5 is _____ percent.

20

If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate is:

20%.

If the CPI is 120 in Year 1 and 150 in Year 2, then the rate of inflation from Year 1 to Year 2 is _____.

25%

Which one of the following transactions is included in a current year's GDP as investment spending?

Maggie bought a play-gym set for her day-care business.

Anna recently moved to Boston in order for her husband Joe to begin a new job as an economics professor at Harvard. Anna is an experienced surgeon who is currently interviewing with several different hospitals in Boston. Anna is currently:

NOT structurally unemployed.

Which of the following is a LIKELY response to inflation?

People tend to make more transactions.

Which one of the following is an example of consumption spending that would be counted toward GDP this year?

Stephanie bought a laptop for her brother.

Real GDP is nominal GDP adjusted for:

changes in prices.

The simplest circular-flow model shows the interaction between households and firms. In this model:

firms supply goods and services to households, which, in turn, supply factors of production to firms.

Investment spending represents spending on:

productive physical capital.

The intermediate goods are not counted in the calculation of GDP, because:

that involves double-counting.

The inflation or deflation rate is:

the change in a price index divided by the initial value of the index.