Macro Exam number 2 Practice quiz

A company produced 8 dishwasher machines in 2015. The company sold 6 in 2015 and added 2 to its inventories. The market value of the dishwasher machines in 2015 was $200 per unit. What is the value of this company's output that will be included in the 2015 GDP?

$1,600

If a firm wants to borrow $10 million and the real interest rate increases from 5 percent to 6 percent, then the cost of the investment has increased by

$100,000 per year.

If an economy produced 10 pizzas at $20 each and fifteen gallons of root beer at $5 each, the total value of these goods and services would be

$275.

The CPI in 1980 was 82, and the CPI in 2006 was 202. If you earned a salary of $30,000 in 1980, what would be a salary with equivalent purchasing power in 2006?

$73,902

For you to be considered not in the labor force, you can be

a full-time volunteer. a full-time retiree. a full-time student. any of the above!!!

Which of the following statements is true?

The unemployment rate does not tell us anything about the duration of unemployment.

In the figure above, the rightward shift from the demand for loanable funds curve DLF1 to the demand for loanable funds curve DLF2, could be the result of

an increase in expected profit.

Related to the Economics in Practice on p. 447: In the U.S. from 1955 to 1996, the labor force participation rate ________ for men and ________ for women.

decreased; increased

The demand for loanable funds curve shifts rightward when

expected profit increases.

If your nominal wage rises more slowly than the price level, we can say your real wage has ________ and the purchasing power of a dollar has ________.

fallen; fallen

Suppose the real interest rate increases from 4 percent to 6 percent. As a result,

firms decrease the quantity demanded of loanable funds.

If the number of unemployed equals 30,000, the number of employed equals 60,000, and the number not in the labor force is 10,000, the labor-force participation rate

is 90%.

A fall in the real interest rate brings a

movement down along the demand for loanable funds curve but no shift in the curve.

A rancher raises alpaca. Once a year, he shears them and sells the raw wool to a processor who spins it into yarn. The yarn is then sold to a mill which produces and sells alpaca sweaters. In calculating GDP we would count

only the sweaters.

Gross domestic product measured in terms of the prices of a fixed, or base, year is

real GDP.

Legalizing all forms of illegal activities would

reduce the size of the underground economy and increase measured GDP.

People who lost their jobs as hand-drawn animators because of the popularity of computer-generated 3D animation are examples of persons who are suffering

structural unemployment.

Telephone operators who have lost their jobs as a result of computerized switchboards are an example of

structural unemployment.

The GDP of the U.S. in 2014 was around $17.4 trillion. This means

that total income in the U.S. in 2014 was around $17.4 trillion. that total spending on final goods and services in the U.S. in 2014 was around $17.4 trillion. that the value of output in the U.S. in 2014 was around $17.4 trillion. all of the above!!!!

If no foreign companies produce in a country, but many of the country's companies produce abroad, then

the country's GNP will tend to exceed its GDP.

What is outlet bias?

the tendency for households to spend their money at discount stores as prices rise

The base year of an index is

the year chosen for the weights in a fixed weight procedure.

Deflation occurs when

there is a decline in the price level.

The GDP deflator in year 2 is 110 using year 1 as a base year. This means that, on average, the price of goods and services is

110% higher in year 2 than in year 1.

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%. If inflation over the year is 2%, what is the real interest rate you are paying

3%

Which of the following is an example of a worker experiencing cyclical unemployment?

A freightliner employee that got laid off because of the recession of 2001.

In the United States in 2015, the highest unemployment rate was for ________ and the lowest was for ________.

African American teenagers; white women

If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is

-3%.

If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 400,000, what is the unemployment rate?

4.8%

If you want to earn a real interest rate of 3% on money you lend, and you expect that inflation will be 2%, what nominal rate of interest will you charge?

5%

The GDP deflator in year 2 is 110 and the GDP deflator in year 3 is 118. The rate of inflation between years 2 and 3 is

7.27%.

If the CPI changes from 125 to 120 between 2007 and 2008, how did prices change between 2007 and 2008?

Prices decreased by 4%.

The increase in unemployment that occurs during recessions and depressions is called

cyclical unemployment.