Econ exam 2
Table 23-10 What was this country's real GDP in 2016?
$10,950
Which of the following is included in the investment component of GDP?
John's law firm buys a new computer
Which of the following statements is correct?
The CPI can be used to compare dollar figures from different points in time.
Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . In which year was this country's nominal GDP highest?
2017
Figure 28-3 If the government imposes a minimum wage of $8, then how many workers will be employed?
3,000
Suppose that the adult population is 6 million, the number of employed is 3.8 million, and the labor-force participation rate is 70%. What is the unemployment rate?
9.5%
The steps involved in calculating the consumer price index and the inflation rate, in order, are as follows:
Fix the basket, find the prices, compute the basket's cost, choose a base year and compute the index, and compute the inflation rate.
Workers searching for jobs that best suit them is most closely associated with
Frictional umemployment
The inflation rate in year 2 equals
GDP deflator year 2- GDP deflator year 1/ GDP deflator year 1 X 100
If the total spending rises from one year to the next, then
either the economy must be producing a larger output of goods and services, or goods and services must be selling at higher prices, or both
Labor unions
raise wages in unionized industries
If net exports is a negative number for a particular year, then
the value of foreign goods purchased exceed the value of goods sold to foreigners during the year
Unemployment data is collected
through a monthly survey of about 60,000 households
Which of the following is not one of the categories into which the Bureau of Labor Statistics places each surveyed household?
underemployed
Which of the following is included in Singapore's GDP?
The value of production by an American working in Singapore
Which of the following statements about real and nominal interest rates is correct?
When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate.
The consumer price index is
a useful measure, but not a perfect measure, of the cost of living.
GDP per person tells us the income and expenditure of the
average person in the economy
The producer price index measures the cost of a basket of goods and services
bought by firms
Real GDP is the yearly production of final goods and services valued at
constant prices
If in some year real GDP was $25 billion and the GDP deflator was 68, what was the nominal GDP?
$17 billion
Table 23-8 In 2012, nominal GDP is
$191.50, and real GDP is $170
Sheri, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included
in German GDP, but is not included in U.S. GDP
Which of the following is the correct formula for calculating the labor force participation rate?
(labor force/ adult population)x100
Which of the following is the correct formula for calculating the unemployment rate?
(number unemployed / labor force)x100
Suppose a basket of goods and services has been selected to calculate the CPI, and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $51; and in 2016, the basket's cost was $52. The value of the CPI in 2014 was
102.0
Table 24-1 The table below lists annual consumer price index and inflation rates for a country over the period 2005-2010. Assume the year 2005 is used as the base year. What belongs in space D?
12%
Suppose the typical household spends $3,500 on goods and services during the month of January, and $4,300 on the same goods and services in February. Using January as the base period, what is the consumer price index for February?
122.9
Which of the following agencies calculates the CPI?
Bureau of Labor Statistics
Last year country A had a nominal GDP of $600 billion, a GDP deflator of 150 and a population of 40 million. Country B had a nominal GDP of $720 billion, a GDP deflator of 120 and a population of 50 million. From these numbers which country is likely to have had the higher standard of living?
Country B because it had the higher real GDP person
Table 24-5 The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys. The cost of the basket
increased from 2004 to 2005 and increased from 2005 to 2006.
When new goods are introduced, consumers have more variety from which to choose. As a result, each dollar is worth
more, and the cost of living decreases
Suppose an economy's production consists only of corn and soybeans. In 2010, 20 bushels of corn are sold at $4 per bushel and 10 bushels of soybeans are sold an $2 per bushel. In 2009, the price of corn was $2 per bushel and the price of soybeans was $1 per bushel. Using 2009 as the base year, it follows that, for 2010,
nominal GDP is $100, real GDP is $50, and the GDP deflator is 200
The GDP deflator is the ratio of
nominal GDP to real GDP multiplied by 100
Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. In 2015, this country's
nominal GDP was equal to real GDP, and the GDP deflator was equal to 100
Which of the following transactions is not included in GDP?
oranges sold by a farmer to a grocery store
When a minimum-wage law forces the wage to remain above the equilibrium level, it
raises the quantity of labor and reduces the quantity of labor demanded compared to the equilibrium level.
A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of 85 in 2010 and 100 in 2009. Between 2009 and 2010,
real output rose and the price level fell
Efficiency wages create a
surplus of labor and so raise unemployment
Suppose that over the past year, the real interest rate was 5 percent and the inflation rate was 3 percent. It follows that
the dollar value of savings increased at 8 percent, and the purchasing power of savings increased a 5 percent.