Macro Test 2

Michigan Cranberry Company sold $10 million worth of cranberries it produced. In producing cranberries, it purchased $1 million dollars' worth of supplies from foreign countries and paid workers who reside in Canada but commute to the U.S. $1 million. How much did these transactions add to U.S. GDP?

$9 Million

Suppose that some country had an adult population of about 25 million, a labor force participation rate of 60%, and an unemployment rate of 6%. How many people were unemployed?

0.9 Million

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

Suppose that some country had an adult population of about 25 million, a labor-force participation rate of 60 percent, and an unemployment rate of 6 percent. How many people were employed?

14.1 million

In 2012 the nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?

$15 Billion

A tire manufacturer produces 400 tires valued at $20 each. Three hundred tires are sold to a tire shop, which then sells them to households for $50 each. The remaining tires are unsold and are added to the tire manufacturer's inventory. How much is added to GDP?

$17,000

In 1986, Ken bought a Ford Mustang for $8,000. If the price index was 122 in 1986, and the price index was 280 in 2011, then what is the price of the Mustang in 2011 dollars?

$18,360.66.

In an imaginary economy, consumers buy only sandwiches and magazines. The fixed basket consists of 20 sandwiches and 30 magazines. In 2006, a sandwich cost $4 and a magazine cost $2. In 2007, a sandwich cost $5. The base year is 2006. If the consumer price index in 2007 was 125, then how much did a magazine cost in 2007?

$2.50

If the CPI was 95 in 1955 and id 475 today, then $100 today purchases the same amount of goods and services as

$20.00 purchased in 1955.

Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in American plants. In 2008, Quality Motors produced $25 million worth of automobiles and sold $12 million in the U.S. and $13 million in Mexico. In addition, it sold $2 million from the previous year's inventory in the U.S. The transactions just described contribute how much to U.S. GDP for 2008?

$25 million

Jane earned a salary of $40,000 in 1996 and $65,000 in 2006. The consumer price index was 160 in 1996 and 266 in 2006. Jane's 2006 salary in 1996 dollars is

$39,097.74.

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP?

$40 billion.

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities. It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000. How much do these actions add to GDP?

$65,000

Suppose that some country had an adult population of about 46 million, a labor-force participation rate of 75 percent, and an unemployment rate of 8 percent. How many people were employed?

31.74 million

In the base year, the GDP deflator is always equal to:

100

The Bureau of Labor Statistics counts a member of a surveyed household as an adult if that Person is at least

16 years old

In the equation Y = C + I + G + NX,

Y represents the economy's total expenditure.

GDP per capita tells us the income and expenditure of the

average person in the economy

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called:

intermediate goods

The GDP deflator is the ratio of:

nominal GDP to real GDP.

Changes in real GDP reflect:

only changes in the amounts being produced.

Which of the following is included in government purchase?

the services of a US government attorney valued at the cost of her salary

In the economy of TAMIU in 2018, exports were $200, GDP was $2000, government purchases were $200, imports were $270, and investment was $500. What was TAMIU's consumption in 2018?

$1370

Net exports equal

exports minus imports

In 2009, based on concepts similar to those used to estimate U.S. employment figures, the Japanese adult non- institutionalized population was 110.272 million, the labor force was 65.36 million, and the number of people employed was 62.242 million. According to these numbers, the Japanese labor-force participation rate and unemployment rate were about

59.3% and 4.8%.

If the consumer price index was 100 in the base year and 106 in the following year, then the inflation rate was

6%

From 2013 to 2014, the CPI for medical care increased from 150 to 159. What was the inflation rate for medical care?

6.0 %

The Bureau of Labor Statistics reported in 2005 that there were 50.40 million people over age 25whose highest level of education was some college or an associate degree, 33.86 million of whom were employed and 1.27 million of whom were unemployed. What were the labor-force participation rate and the unemployment rate for this group?

69.7% and 3.6%

The adult population in the town of Belleville is 150 thousand. If 100 thousand people are employed and 20 thousand are unemployed, then the labor force participation rate is approximately

80%

If nominal GDP is $8 trillion and real GDP is $10 trillion, then the GDP deflator is

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

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator?

87.5

You need to use information from the website of the Bureau of Labor Statistics to answer this question. What is the CPI value for Tampa for the first half of the year 2010?

A 193.716 B 193.292 C 193.504 D 218.529 Apparently all of them are right

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

A Final goods and services that are purchased by the U.S. federal government B Intermediate goods that are produced in the U.S. but that are unsold at the end of the GDP Accounting period C Goods and services produced by foreign citizens working in the U.S. D - Answer All of the above are included in U.S. GDP. -

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

A Households' purchases of newly constructed homes B Net additions to firms' inventories C Firms' purchases of capital equipment D - Answer All of the above are correct.

Who of the following would necessarily be included in the Bureau of Labor Statistics' "unemployed" category?

A Huey, who did not work during the previous four weeks B Dewey, who tried to find new employment during the previous four weeks C Louie, who was an unpaid worker during the previous four weeks D - Correct None of the above is correct.

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

A In government expenditures and exports. B Government expenditures and imports. C Exports, but not government expenditures. D Imports, but not government expenditures.

GDP does not reflect

A The value of leisure. B The value of goods and services produced at home. C The quality of the environment. D - Answer All of the above are correct.

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

A the estimated value of production accomplished at home, such as backyard production of fruits and vegetables B the value of illegaly produced goods and services C the value of cars and trucks produced in foreign countries and sold in the U.S. D - Answer None of the above is included in the U.S. GDP.

Otherwise legal transactions that go unreported or unrecorded are called

A the underground economy. B the shadow economy. C the informal economy. D - Answer All of the above are correct.

Which of the following transactions would add to the value of the U.S. GDP?

A grocery store purchases new freezers made in the United States.

The CPI is a measure of the overall cost of the goods and services bought by

A typical consumer, and the CPI is computed and reported by the Bureau of Labor Statistics.

An economy's natural rate of unemployment is the

Amount of unemployment that the economy normally experiences.

Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as "unemployed"?

Anyone who is not employed, is available for work, has looked for work in the past four Weeks, and anyone who is waiting to be recalled from a job from which they have been laid off

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.

Jamarcus works part-time as a pizza delivery person in a college town. The Bureau of Labor Statistics counts Jamarcus as

Employed and in the labor force

People who are unemployed because they are in search of a job that suits their skills are included within

Frictional Unemployment

GDP is not a perfect measure of economic well-being. For example:

GDP fails to account for the quality of the environment.

Which of the following statements regarding GDP is correct?

GDP includes factory production, but not any harm that may be inflicted on the environment.

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that

GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare.

GDP is used as the basic measure of a society's economic well-being. A better measure of the economic well-being of individuals in society is:

GDP per capita

Suppose that the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct?

GDP would definitely increase because GDP excludes environmental quality.

When the consumer price index rises, the typical family

Has to spend more dollars to maintain the same standard of living.

Which statement is true about GDP growth?

If we want to compare GDP over time, we should always compare real GDP.

Which statement is true about GDP?

In the US, GDP is calculated both annually and quarterly.

The underground economy

Includes otherwise legal transactions that go unreported or unrecorded.

Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has

Increased measured GDP by the value added by the restaurant's preparation and serving of the meals.

Sam loses his job and decides to sit on the beach rather than look for work during the next few months. Other things the same, the unemployment rate

Increases, and the labor-force participation rate decreases.

The term economists use to describe a situation in which the economy's overall price level is rising is:

Inflation

To which of the problems in the construction of CPI is the creation of the new smart phones most relevant, such as new generations of iPhone?

Introduction of new goods

For the purpose of calculating the consumer price index, the basket of goods

Is kept the same from year to year so that the effects of price changes are isolated from the effect of any quantity changes that might be occurring at the same time.

Which of the following is not an explanation for the existence of structural unemployment?

Job Search

Frictional unemployment results from

Job searching. It is often thought to explain relatively short spells of unemployment.

John is a stockbroker. He has had several job offers, but he has turned them down because he thinks he can find a fine that better matches his tastes and skills. Curtis has looked for work as an accountant for some time. While the demand for accountants does not appear to be falling, there seems to be more people applying than jobs available.

John is frictionally unemployed, and Curtis is structurally unemployed.

Martin, a US citizen, travels to Mexico and buys a newly manufactured motorcycle there. His purchase is included in:

Mexican GDP, but not in US GDP.

The consumer price index is used to

Monitor changes in the cost of living over time.

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

Nominal GDP but not real GDP

Which of the following is correct?

Nominal GDP equals real GDP in the base year.

Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,

Nominal GDP is $500, real GDP is $400, and the GDP deflator is 125.

The GDP deflator is the ratio of

Nominal GDP to real GDP multiplied by 100.

The labor force equals the

Number of people employed plus the number of people unemployed.

Babe Ruth, the famous baseball player, earned $80,000 in 1931. Today, the best baseball players can earn more than 400 times as much as Babe Ruth earned in 1931. However, prices have also risen since 1931. We can conclude that

One cannot determine whether baseball stars today enjoy a higher standard of living than Babe Ruth did in 1931 without additional information regarding increases in prices since 1931.

By not taking into account the possibility of consumer substitution, the CPI

Overstates the cost of living

The economy's inflation rate is the

Percentage change in the price level from the previous period

Nominal GDP will definitely increase when

Prices increase and output increases

With respect to the consumer price index, the substitution bias arises because

Prices of goods and services do not change in the same proportion from year to year.

If real GDP doubles and the GDP deflator doubles, then nominal GDP

Quadruples.

Which of the following statements about nominal GDP and real GDP is correct?

Real GDP is a better gauge of economic well-being than nominal GDP.

If the quality of a good improves while its price remains the same, then the value of a dollar

Rises and the cost of living decreases.

Frictional unemployment is thought to explain relatively

Short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment.

Cyclical unemployment refers to

Short-run fluctuations around the natural rate of unemployment

One problem with the consumer price index stems from the fact that, over time, consumers ten to buy larger quantities of goods that have become relatively less expensive and smaller quantities of goods that have become relatively more expensive. This problem is called

Substitution bias.

In calculating the CPI, a fixed basket of goods and services is used. The quantities of the goods and services in the fixed basket are determined by

Surveying consumers.

Two alternative measures of the overall level of prices are

The GDP deflator and the consumer price index.

Which of the following is not correct?

The consumer price index is used to measure the quantity of goods and services that the economy is producing

The term inflation is used to describe a situation in which

The overall level of prices in the economy is increasing.

Which of the following is included in the calculation of GDP?

The purchase of tutoring services from a tutor who holds citizenship outside the country but, resides within the country.

Which of the following is included in Singapore's GDP?

The value of production by an American working in Singapore.

Unemployment data are collected

Through a regular survey of about 60,000 households.

A U.S. grocery chain purchases olive oil from Tunisia and sells it to U.S. consumers. In which of the following is this transaction included?

U.S. consumption and U.S. imports

Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is

U.S. consumption purchases increase by $200 and U.S. GDP increases by $200.

A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,

U.S. investment and GDP increase, but German GDP is unaffected.

Eric was laid off two months ago. He has not searched for other work because he is expecting to be recalled to work. The Bureau of Labor Statistics counts Eric as

Unemployed and in the labor force

Which of the following transactions adds to U.S. GDP for 2015?

When Ken and Kim were both single, they lived in separate apartments and each paid $800 it rent. Ken and Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,700 per month.

Which of the following is a way to compute GDP?

add up the market value of all final goods and services

GDP per capita tells us the income and expenditure of the

average person in the economy.

Suppose an economy produces only burgers and bags of fries.in 2010, 4000 burgers are sold at $3 each and 6000 bags of fries at $1.5 each. In 2008, which is the base year, burgers were sold for $2.5 each and bags of fries were sold for $2 each. Then for 2010,

nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45.

Transfer payments are:

not included in GDP because they are not payments for currently produced goods or services.

When economists talk about growth in the economy, they measure that growth as the:

percentage change in real GDP from one period to another.

If the consumer price index was 96 in 2012, 100 in 2013, and 102 in 2014, then the base year must be

2013

You need to use information from the website of the Bureau of Labor Statistics to answer this question. What is the CPI value for Chicago in September, 2017?

235.177

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%

In 2009, based on concepts similar to those used to estimate U.S. employment figures, the Italia adult non- institutionalized population was 51.070 million, the labor force was 24.710 million, and the number of people employed was 22.765 million. According to these numbers, the Italia labor-force participation rate and unemployment rate were about

48.4% and 7.9%.