macro

In 1969, Malcolm bought a Pontiac Firebird for $2,500. If the price index was 36.7 in 1969 and the price index was 235 in 2013, then what is the price of the Firebird in 2013 dollars?

$16,008.17

Tim mows the yard for his neighbors. He spends $1 on gas and charges them $20 for each lawn he mows. What's the total contribution to GDP each time Tim mows a yard?

$20

Productivity increases if ...

All of the above answers are correct.

Which of the following is a way to compute GDP?

All of the above are correct.

Which of the following causes of unemployment is NOT associated with a wage rate above the market equilibrium?

Job search

Cyclical unemployment is the result of ...

a slowdown in the economy (recession).

Suppose that an American company opens and operates a toy factory in Ukraine. This is an example of ...

foreign direct investment. American saving is used to finance Ukrainian investment.

Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills ...

frictional unemployment

The logic behind the catch-up effect is that ...

new capital adds more to production in a country that doesn't have much capital than in a country that already has much capital.

Refer to the table below. Consider the data above (in billions of dollars) for an economy. Gross domestic product (in billions of dollars) for this economy equals ...

$1,600

If the CPI was 68 in 1965 and is 285 today, then $100 today purchases the same amount of goods and services as ...

$23.86 purchased in 1965.

Refer to Table 1 below. The labor force participation rate for this simple economy equals ...

(1,100/15,000) × 100%.

Suppose that some country had an adult population of about 50 million, a labor-force participation rate of 60 percent, and an unemployment rate of 5 percent. How many people were unemployed?

1.5 million

Last year real GDP in the imaginary town of Springville was $9,075,000 and the population was 3,300. The year before, real GDP was $7,500,000 and the population was 3,000. What was the growth rate of real GDP per person during the year?

10%

Refer to the table below. Assume the market basket has two products - bread and milk - with the values in 2013 and 2018 for price and quantity given in the table above. If 2013 is the base year, the consumer price index for 2018 equals ...

116.

If nominal GDP is $12 trillion and real GDP is $10 trillion, then the GDP deflator is ...

120, and this indicates that the price level has increased by 20 percent since the base year.

If the economy of Country Z is growing at an annual rate of 5%, how long will it take for the size of this economy to double?

14 years

The president of a poor country has announced that he will implement the following five measures which he claims are designed to increase economic growth: 1. Reduce corruption in the legal system. 2. Reduce reliance on market forces because they allocate goods and services in an unfair manner. 3. Restrict investment in domestic industries by foreigners because they take some of the profits out of the country. 4. Encourage trade with neighboring countries. 5. Increase the fraction of GDP devoted to consumption. How many of these measures will have a positive effect on economic growth?

2

If GDP grew 3.5% in 1970, 2.2% in 1971 and 2.5% in 1972 then, what is the average annual growth rate over this period?

2.7%

Suppose that the adult population in the town of Springfield is 225 million. If 40 million are unemployed and 100 million are employed, then the unemployment rate is approximately ...

29%

Refer to Table 1 below. What is the U-2 measure of labor underutilization?

3.1%

The consumer price index was 225 in 2008 and 232.2 in 2009. The nominal interest rate during this period was 6.5 percent. What was the real interest rate during this period?

3.3 percent

Refer to Figure 1 below. If the government imposes a minimum wage of $8, how many workers will be unemployed?

4 million

If the number of unemployed workers is 19 million, the number in the adult population is 500 million, and the unemployment rate is 4%, how many workers are in the labor force?

475 million

Refer to Table 1 below. What is the U-4 measure of labor underutilization?

6.9%

The price index was 220 in one year and 238.2 in the next year. What was the inflation rate?

8.3 percent

Refer to the table below. Suppose an economy has only three goods and the typical family purchases the amounts given in the table above. If 2006 is the base year, then what is the CPI for 2013?

87.5

Refer to Table 1 below. What is the U-6 measure of labor underutilization?

9.0%

Which of the following is not included in U.S. GDP?

The market value of an oil change that Ben performs on his own car.

On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is NOT one of these conclusions?

Restricting investment in domestic industries by foreigners promotes economic growth as it ensures that profits stay in the country.

Which of the following statements is correct?

Technological knowledge is a determinant of productivity.

Which of the following statements is correct?

The CPI can be used to compare dollar figures from different points in time.

Which of the following could cause nominal GDP to increase, but real GDP to decrease?

The price level rises and the quantity of final goods and services produced falls.

If an economy is growing at 4% a year while the population is growing at 5% a year, what is true about this economy?

The standard of living is falling.

Which of the following statements is correct?

The value of the consumer price index is always 100 in the base year.

When an American household purchases a bottle of Italian wine for $100, ...

U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change.

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

a worker who loses his job as a hand-drawn animator because of the popularity of computer-generated 3D animation.

If Nike, an American corporation, started producing sneakers in Thailand this would ...

add to Thailand's GDP but not to U.S. GDP.

Over time, people have come to rely more on market-produced goods and services and less on goods and services they produce for themselves. For example, busy people with high incomes, rather than cleaning their own houses, hire people to clean their houses. By itself, this change has ...

caused measured GDP to rise.

Other things the same, if saving falls in some period, then in that period ...

consumption rises and investment falls.

The goal of the consumer price index (CPI) is to measure changes in the ...

cost of living.

Nominal GDP is the yearly production of final goods and services valued at ...

current prices.

To be counted as "employed" in the U.S. labor force statistics, a person ...

does not have to be working for pay if they are working for a family business and does not have to be working full time.

Andreas works part-time as an UberEats delivery driver in a college town and is actively looking for a full-time job. The Bureau of Labor Statistics counts Andreas as ...

employed and in the labor force.

Which of the following items is included in U.S. GDP?

goods produced by foreign citizens working in the United States

The real interest rate tells you ...

how fast the purchasing power of your bank account rises over time.

A country's human capital increases ...

if its workers become better educated and healthier.

Which of the following will decrease a country's real GDP per person?

imposing restrictions on foreign trade and foreign investment

Which of the following policies would reduce frictional unemployment?

improving an online job database that helps workers find jobs

Every unit of good x that is produced in the United States is exported to other countries. An increase in the price of good x shows up ...

in the GDP deflator, but not in the consumer price index.

Suppose that full-time students without jobs who are not actively looking for work are included as employed in the labor force statistics, rather than being counted as out of the labor force. This would ...

increase the measured labor force participation rate.

Axel loses his job and immediately begins looking for another. Other things the same, the unemployment rate ...

increases, and the labor-force participation rate is unaffected.

Human capital is ...

knowledge and skills that workers have acquired.

Leon is an unpaid, stay-at-home father who works as a volunteer at the local Feeding America chapter. Currently, Leon is not looking for a paid job. The Bureau of Labor Statistics counts Leon as ...

neither in the labor force nor unemployed.

Country X and country Y are the same except country X currently has more capital. Assuming diminishing returns, if both countries increase their capital by 1,000 units and other factors that determine output are unchanged, then ...

output in country X increases by less than in country Y.

Pharmaceutical companies often obtain patents on new products, thereby turning new ideas into ...

private goods and increasing the incentive to engage in research.

The key determinant of the standard of living in a country is ...

productivity.

The quantity of goods and services that can be produced by one worker in one hour is referred to as ...

productivity.

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

property rights

A nation's standard of living is best measured by its ...

real GDP per person.

A country produces only ice cream and pie. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.

real GDP was $250, and the GDP deflator was 120.

When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study ...

real GDP.

Which of the following is included in the investment component of GDP?

spending on new business equipment such as power tools but not spending on stocks and bonds

Price changes from year to year are not proportional, and consumers respond to these changes by altering their spending patterns. The problem this creates for inflation calculations is called ...

substitution bias.

Two alternative measures of the price level are ...

the GDP deflator and the consumer price index (CPI).

If the CPI was 110 this year and 100 last year, then ...

the cost of the CPI basket of goods and services increased by 10 percent this year.

When computing the cost of the basket of goods and services purchased by a typical consumer, which of the following changes from year to year?

the prices of the goods and services

Economists consider full employment to occur when ...

the unemployment rate consists of only frictional and structural unemployment.

Unemployment data are collected ...

through a regular survey of about 60,000 households.