ap macro assessment 2

Based on the information in the table above, what is the unemployment rate for Country X? A. 3.3% B. 4.0% C. 6.0% D. 6.38% E. 7.5%

C

In 2016 the nominal GDP for Country X was $330 billion and the GDP deflator was 110. The real GDP for 2016 was A. $110 billion B. $220 billion C. $300 billion D. $330 billion E. $440 billion

C

The major difference between real and nominal gross domestic product (GDP) is that real GDP Responses A. excludes government transfer payments B. excludes imports C. is adjusted for price-level changes using a price index D. measures only the value of final goods and services that are consumed E. measures the prices of a market basket of goods purchased by a typical urban consumer

C

The table below shows the cost of the same representative basket of goods in the base year 2012 and in 2013, and the average weekly nominal wage rate in 2012 and 2013. If 2012 is the base year, which of the following is true? A. The inflation rate from 2012 to 2013 is 10%. B. The CPI in year 2013 is 110. C. The CPI in year 2013 is 120. D. Based on the CPI, the average real weekly wage rate increased by 10% from 2012 to 2013. E. Based on the CPI, the average real weekly wage rate decreased by 20% from 2012 to 2013

C

Gross domestic product has been criticized as a measure of well-being because it fails to take into account which of the following? A. The distribution of income B. The value of services C. The value of intermediate goods D. The value of financial transactions and sales of used items E. The value of government services

A

Public policy that generates an unexpected increase in consumer prices will inflict short-run costs on all of the following EXCEPT A. borrowers B. workers with fixed incomes C. savers holding non-interest-bearing money D. taxpayers shifted into higher tax brackets E. people whose incomes are not adjusted for inflation

A

The table below shows a country's macroeconomic data in 2013. The country's gross domestic product is A. $220 billion B. $282 billion C. $304 billion D. $309 billion E. $347 billion

A

The table below shows labor market statistics for a nation. Based on the above table which of the following is most likely correct? A. The natural rate of unemployment is 5 percent. B. The labor force participation rate is 91 percent. C. Discouraged workers are 4 percent of the labor force. D. There are 9 million discouraged workers in the nation E. There are 95 million people in the labor force

A

GDP does NOT account for which of the following? A. The value added by all firms in the economy B. The depletion of natural resources C. Wages, rent, profit, and interest payments D. The value of final goods and services produced domestically E. Imports from foreign countries

B

If nominal gross domestic product fell while real gross domestic product rose, which of the following must be true? A. Unemployment increased. B. The inflation rate was negative. C. Net exports were negative. D. The average of stock prices rose while bond prices fell. E. Nominal interest rates rose by less than the rate of inflation.

B

Which of the following necessarily occurs during an economic recession? A. Cost-push inflation decreases. B. Real gross domestic product decreases. C. Cyclical unemployment decreases. D. Demand-pull inflation increases. E. Nominal wages increase.

B

Which of the following situations will benefit lenders of fixed interest rate loans? A. The actual inflation rate is equal to the natural rate of unemployment. B. The actual inflation rate is less than the expected inflation rate. C. The actual inflation rate is equal to the fixed interest rate. D. The consumer price index is greater than 100. E. There is no cyclical unemployment.

B

Which of the following unemployed individuals represents frictional unemployment? A. Marissa, a full-time student who plays on the school's soccer team. B. Janet, an accounting graduate who is interviewing with a number of accounting firms. C. Sameer, a retired faculty member who volunteers at the local hospital. D. Jeremy, a customer service representative who was laid-off after his job was automated. E. Elizabeth, a financial analyst who was laid off because of the recession.

B

A continuous increase in the consumer price index (CPI) is A. deflation B. stagflation C. inflation D. recession E. disinflation

C

A short-run increase in national income could be caused by a decrease in which of the following? A. Consumption B. Investment C. Imports D. Government spending E. Exports

C

Which of the following is most likely included in gross domestic product? A. Matt gives his secondhand bicycle to his brother. B. Sal paints his own bicycle. C. Ali buys a new bicycle. D. Mike buys a share of stock in a bicycle firm. E. Daniel bikes to school every day.

C

Which of the following transactions will be included in the calculation of Country X's Gross Domestic Product (GDP) in 2020? A. The sale of corporate stocks B. The exchange of a used automobile for a used boat C. The purchase of new construction equipment D. Social Security checks received by retirees E. Carrots grown in a household's backyard and consumed by the family

C

As a measure of economic performance, GDP accounts for which of the following? A. Used books donated to a local library B. Depletion of durable consumer goods C. Increased leisure time D. Souvenir gifts purchased by tourists domestically E. Cash transactions in the underground economy

D

The nation of Turboland produces only two goods, X and Y. The prices and final quantities produced of the two goods in 1993 and the base year of 1992 are shown in the table below. What are the nominal GDP and real GDP in 1993? A. Nominal GDP is $90, Real GDP is $96 B. Nominal GDP is $74, Real GDP is $96 C. Nominal GDP is $70, Real GDP is $96 D. Nominal GDP is $96, Real GDP is $90 E. Nominal GDP is $96, Real GDP is $74

D

The table below shows labor market statistics for a nation. What is the nation's unemployment rate? A. 4% B. 5% C. 6% D. 9% E. 66.7%

D

Which of the following allows an individual to gain from unexpected inflation? A. Living on a fixed income B. Working at the minimum wage C. Lending money at a fixed interest rate D. Borrowing money at a fixed interest rate E. Saving money in a fixed-interest-rate savings account

D

Which of the following explains why the rate of change of the consumer price index (CPI) tends to overstate the actual inflation rate? A. Consumers will require more income to buy goods whose prices have increased. B. Nominal wages do not always increase by as much as prices do. C. When real wages increase, consumers can afford higher-priced goods. D. Consumers tend to substitute lower-priced goods that may not be represented in the basket of goods. E. The basket of goods in the base year is frequently updated with new products.

D

Which of the following is true according to the circular flow model? A. Firms are suppliers in both the product and factor markets. B. Firms are demanders in the product markets and suppliers in the factor markets. C. Households are demanders in both the product and factor markets. D. Households are demanders in the product markets and suppliers in the factor markets. E. The government is a demander in the product market only.

D

Which of the following will happen if the actual inflation rate is greater than the expected inflation rate? A. Lenders of fixed interest rate loans will be better off. B. Lenders of variable interest rate loans will be worse off. C. Borrowers of fixed interest rate loans will be worse off. D. Borrowers of fixed interest rate loans will be better off. E. Borrowers of variable interest rate loans will be better off.

D

A country's real gross domestic product is the annual value of all final goods and services that are A. purchased in that country, adjusted for changes in the price level B. produced in that country, expressed in current prices C. produced in that country, less exports D. produced in that country, less depreciation E. produced in that country, adjusted for changes in the price level

E

If a nation's actual real GDP is less than potential real GDP, which of the following must be true? A. The economy is in expansion B. The economy is in recession. C. There is no cyclical unemployment. D. There is no frictional unemployment. E. The actual rate of unemployment exceeds the natural rate of unemployment.

E

In 2017 Sabrina earned an annual salary of $100,000 as an engineer. In 2018, her income rose to $105,000. The inflation rate in 2018 was 2%. How did Sabrina's nominal income and real income change in 2018 compared to 2017? A. Nominal income decreased and real income decreased. B. Nominal income decreased and real income did not change. C. Nominal income increased and real income decreased. D. Nominal income increased and real income did not change. E. Nominal income increased and real income increased.

E

Which of the following typically occurs during an expansionary phase of a business cycle? A. Nominal interest rates decrease. B. Income taxes decrease. C. The price level decreases. D. Government transfer payments increase. E. Employment increases.

E