Macroeconomics Exam 1
If nominal GDP is $5 trillion and real GDP is $4 trillion, the GDP deflator is
125.
Assume you borrow funds to buy a new car at 10% interest and you think that the economy-wide rate of inflation over the life of the loan will be 8%. If you are correct in your assmption, your real rate of interest on the car loan will be.
2%
Number of Years to Double =
70 / Growth Rate
If you invest $10,000 in a bond that earns 8% interest per year, how many years will it take to double your money?
8 years and 9 months
Y =
Consumption + Investment + Government Purchases + Net Exports
Suppose that Matt quits a job with the XYZ Corporation in order to look for more rewarding
Counted as fictionally employed
Which of the following people would be considered unemployed?
Edna who lost her job as a teacher and is currently searching for a new job
The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S. ________ and the South Korean ________.
GNP; GDP
Labor Force Participation Rate =
Labor Force / Working Age Population
GDP Deflator =
Nominal GDP / Real GDP
Unemployment Rate =
Numbered of Unemployed / Labor Force
If government purchases are $400 million, taxes are $700 million, and transfers are $200 million, which of the following is true?
Public saving is $100 million
Which of the following headlines would be more closely related to what macroeconomics study than what macroeconomics study?
Real GDP grows by 2.3% in the second quarter.
Mrs Garcia lost her job at a exile mill due to competition from cheaper imported goods. She would be classified as
Structurally unemployed
Spublic =
T - G - TR
Full employment means that
Taking seasonal fluctuations into account, only frictional and structural unemployment exist
Which of the following explains why fluctuations in real GDP have become less volatile in the United States since 1950?
Unemployment insurance and other government transfer programs are more prevalent since the 1950s.
Sprivate =
Y + TR - C -T
Closed Economy
Y = C + I + G
Under which one of the following situations would you be better off
You borrowed $2,500 at 7% to pay for this year's college expenses and unanticipated inflation is 2% during the year
Which of the following goods is directly counted in GDP?
a 12-inch Subway sandwich purchased by a student
Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that
avoid playing any role in developing communication systems.
The U.S. work week has declined from 60 hours in 1890 to 40 hours today. The impact of the decline in working hours
decreases U.S. GDP and increases the well-being of a typical working person in the U.S.
Which of the following would contribute to a sustained high rate of economic growth in the long run in an economy?
increases in labor force participation rates as workers who are out of the labor force pursue rising wages
Purchases of which of the following goods would be dramatically reduced during a recession?
refrigerators
Suppose in 2016, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2016?
the value of the services of the real estate agent
In 2016, Kendall Ford, an automobile dealership, spent $20,000 on a new car lift for its repair shop, $2,000 on a new copy machine for its sales division, and $600,000 on Ford Motor company stock. Unsold cars and trucks were valued at $400,000 on January 1, 2016 and unsold cars and trucks were valued at $900,000 on December 31, 2016. What is Kendall Ford's total investment spending in 2016?
$522,000
In a small economy, consumption spending is $6,000, government spending is $1,200, gross investment is $1,500, exports are $2,000, and imports are $1,000. What is gross domestic product?
$9,700
% Change in GDP =
(New Value - Old Value) / Old Value