FlipIt 5-9 Questions

If nominal GDP is $14 billion and the GDP deflator is 125, what is real GDP?

$11.2

John has an escalator clause in his labor contract by which his salary automatically increases according to the previous year's inflation rate. If John's salary is $50,000, this year's consumer price index is 120, and the previous year's CPI was 115, what will John's new salary approximately be?

$52,000

If a set basket of goods costs $6,000 in the current year and $5,000 in the base year, what is the consumer price index?

120

If a set basket of goods costs $4,000 in the current year and $3,200 in the base year, what is the consumer price index in the current year?

125

Suppose there are 3,000 in the population: 1,700 are employed, 300 are unemployed, and 200 are discouraged workers. The size of the labor force is:

2,000 1,700+300=

If structural unemployment is 2% and frictional unemployment is 3%, then the natural rate of unemployment is:

5%

John has an escalator clause in his labor contract by which his salary increases automatically by the amount of the previous year's inflation rate. If John's salary is $100,000, this year's consumer price index is 105, and the previous year's CPI was 100, by what percent will John's salary be increased?

5%

If the current year's consumer price index is 214 and last year's was 200, then the rate of inflation is:

7%

Last year, the consumer price index (CPI) was 115 and this year's CPI is 125. Therefore, the rate of inflation is:

8.7%

Suppose the consumer price index in 2016 was 100 and its corresponding basket of goods was $23,000. If that same basket of goods cost $19,000 in 2008, what was the value of the CPI in that year?

82.6

Suppose that a U.S. automaker produces $1 million worth of automobiles in Japan. How much of that is added into the GDP of the United States?

None

_____ results from changes in the business cycle.

cyclical unemployment

Contractionary monetary policy _____ the money supply and _____ interest rates.

decreases; increases

A reduction in the rate of inflation is called:

disinflation.

The most important factor in improving a country's standard of living is likely to be:

economic growth

The labor force is the total:

employed and unemployed

People are counted as unemployed if they do not have a job but are available for work and have been actively seeking work for the previous _____ weeks.

four

Fiscal policy involves changes in _____ with the primary purpose of changing _______ .

government spending, taxes, and transfer payments; total spending

If the CPI was 120 in 2015 and 360 in 2016, the economy is experiencing:

hyperinflation

Expansionary monetary policy _____ the money supply and _____ interest rates.

increases; decreases

Which of the following is used to calculate GDP using the income approach?

net interest

If a set basket of goods costs $6,000 in the current year and $5,000 in the base year, how much have prices risen since the base year?

20%

Which of the following is NOT a criticism of the National Bureau of Economic Research (NBER)?

Committee members are not prominent economists.Inflation is a:

_____ is equal to the total market value of all final goods and services produced by resources in the United States in a given year.

GDP

If consumption is $12 million, investment is $3 million, government spending is $5 million, exports is $5 million, and imports is $4 million, what is the value of GDP?

GDP = Consumption + Investment + Government Spending + Net Exports (Exports - Imports). The calculation is $12 million + $3 million + $5 million + $5 million - $4 million = $21 million.

Which of the following is an example of a microeconomic topic? a) How high oil prices affect economic growth. b) The effect of increased trade on unemployment. c) How a gas station changes their pricing strategy in response to a new competitor. d) The effect of monetary policy on inflation.

How a gas station changes their pricing strategy in response to a new competitor.

Which of the following is a macroeconomic topic?a) How agricultural subsidies affect crop selection. b) How the business cycle affects unemployment. c) How fuel prices affect airline ticket prices. d) How financial firms have revised lending qualifications.

How the business cycle affects unemployment.

Which of the following is a component of expansionary fiscal policy? a) Increasing taxes. b) Cutting Social Security. c) Decreasing government spending. d) Increasing transfer payments.

Increasing transfer payments.

Jennifer received news that she is getting a 4% raise. However, the Bureau of Labor Statistics reported that prices are rising by 7%. This means that:

Jennifer's purchasing power falls by 3%.

If a market is laissez-faire, it is:

allowed to function without any government intervention.

_____ includes workers who voluntarily quit their job to search for a better position or are moving to new a job, although it may still take several days or weeks before they can report to their new employer.

frictional unemployment

Inflation is a:

general increase in the average price level.

GDP is a measure of a nations total

outputs

Roger worked in a coal mine until it went out of business. Now he is unable to find a new job because he is not qualified for any of the jobs that are available. This is an example of:

structural unemployment

Macroeconomics was developed to explain:

the Great Depression of the 1930s.

Business cycles are officially dated by:

the National Bureau of Economic Research.

Monetary policy involves changes in _____ with the primary purpose of changing _____.

the money supply and interest rates; total spending

Cheryl lost her job six months ago. However, she has been actively seeking work and filled out her last job application two weeks ago. The Bureau of Labor Statistics would classify her as:

unemployed

Before the Great Depression, the government was NOT expected to:

promote policies to maintain full employment.

__________ deals with decision making by individuals, businesses, industries, and governments. __________ deals with broad issues of the economy such as inflation and unemployment.

Microeconomics; Macroeconomics

Suppose there are 2,000 people in the population: 1,350 are employed and 150 are unemployed. What is the unemployment rate?

The unemployment rate is 150/1,500 = 10%.

Suppose there are 5,000 people in the population: 3,000 are employed and 500 are unemployed. What is the unemployment rate?

The unemployment rate is 500/3,500 = 14.3%

In 1979, prices in the United States increased by more than 13%. This is an example of:

inflation