Macroeconomics Unit 2

Potential real GDP is: A. sometimes greater, sometimes less, and sometimes equal to actual real GDP B. always less than actual real GDP C. always greater than actual real GDP D. the level of real GDP that would be produced when firms are operating below capacity

A. sometimes greater, sometimes less, and sometimes equal to actual real GDP

Your income was $25,000 in 2009 and $25,500 in 2010. The CPI was 217.2 in 2009 and 220.2 in 2010. This means that: A. your real income has risen B. your real income has not changed C. there is not enough information to determine what happened to your real income D. your real income has fallen

A. your real income has risen

Which is the largest component of GDP? A. Net exports B. Investment C. Government spending D. Consumption

D. Consumption

The calculation of gross domestic product would include: A. the money Alice receives when she sells her used bicycle to Fred B. unemployment compensation benefits received by a former steel worker C. the services of a lawyer when he cleans his own apartment D. The purchase of a new automobile

D. The purchase of a new automobile

In the calculation of GDP, which of the following purchases is included as household consumption expenditure? A. A new computer purchased by a college student B. A new calculator required for a statistician's job C. A new apartment building purchased by a landlord D. A new tractor purchased by a farme

A. A new computer purchased by a college student

What is the general relationship between the business cycle and unemployment? A. During recessions, unemployment rises B. During recessions, unemployment falls C. The business cycle is unrelated to unemployment

A. During recessions, unemployment rises

Which of the following do not influence real economic growth in the long-run? A. Increase supply of currency B. Increase in the amount of capital C. Increase in the availability of technology D. Well established private property rights

A. Increase supply of currency

Which of the following is included in the economist's definition of investment? A. The purchase of new machines, factories, or houses B. The purchase of four bitcoins C. The purchase of a share of stock D. The purchase of a rare coin or a deposit in a savings account

A. The purchase of new machines, factories, or houses

Long-run growth in GDP is determined by: A. capital, labor productivity, and technology B. labor productivity, capital and government expenditures C. technology, investment, and consumption D.consumption, investment, and government expeditures

A. capital, labor productivity, and technology

When an individual cannot find a job for a lengthy period of time, and then stops looking for a job, how does this change impact the unemployment rate? A. decrease B. there is no impact because the person never found a job C. increase

A. decrease

The consumer price index: A. measures the cost of an unchanging basket of goods and services B. measures the cost of a changing basket of goods and services C. measures the value of real output annually D. changes the base period every five years

A. measures the cost of an unchanging basket of goods and services

Which of the following are not counted as final goods and used in the GDP calculation? A. Exports B. Intermediate goods C. Investment goods D. Consumer goods

B. Intermediate goods

Inflation is important because: A. it affects the value of one's income B. all answers are correct C. it often affects the negotiation of wage contracts and the size of the cost of living allowances D. it affects the real interest rate E. it affects the real return one earns on investments

B. all answers are correct

A decrease in the CPI is known as: A. inflation B. deflation C. disinflation D. recession

B. deflation

Gross domestic product is best defined as the: A. unsavory goods produced in a country during a period of time B. market value of all final goods and services produced in a country during a period of time C. total quantity of goods and services produced in a country during a period of time D. total value of all goods that can be found in a country

B. market value of all final goods and services produced in a country during a period of time

Inflation occurs when: A. the purchasing power of money remains unchanged B. the average level of prices are increasing C. some prices are increasing but other prices are decreasing D. the purchasing power of money is increasing

B. the average level of prices are increasing

The two key factors that cause labor productivity to increase over time are: A. the decline in unionization and slacking of labor laws B. the quantity of capital per hour worked and the level of technology C. the quantity of labor per hour worked and the level of technology D. better environmental standards and stricter labor laws

B. the quantity of capital per hour worked and the level of technology

The CPI was 220.2 in December 2010 and 174.6 in December 2000. This means that the inflation rate between 2000 and 2010 was: A. 21% B. 79% C. 26% D. 46%

C. 26%

Which of the following types of unemployment are included in the natural rate of unemployment? A. Seasonal unemployment and structural unemployment B. Cyclical unemployment and structural unemployment C. Frictional unemployment and structural unemployment D. Cyclical unemployment and frictional unemployment

C. Frictional unemployment and structural unemployment

Which of the following changes does not cause an increase in the quantity of goods and services that can be produced by one worker or in one hour of work? A. technological change B. an increase in the literacy rate C. an increase in the number of workers D. an increase in the quantity of capital per hour worked

C. an increase in the number of workers

When the real output in an economy decreases, this causes more of which type of unemployment? A. structural unemployment B. frictional unemployment C. cyclical unemployment D. seasonal unemployment

C. cyclical unemployment

When an individual graduates from college then begins to look for the first job, how does this change impact the unemployment rate? A. there is no impact on the employment rate since the former B. student has not yet found a job C. increase D. decrease

C. increase

Full-employment GDP is also known as: A. politico-economic GDP B. realized GDP C. potential real GDP D. balanced-budget GDP

C. potential real GDP

Full employment is when: A. the unemployment rate is 0%. B.everyone is working except kids, retirees, and the disabled. C. the unemployment rate is equal to the natural rate of unemployment. D. the number of employed is greater than the number in the labor force

C. the unemployment rate is equal to the natural rate of unemployment.

The buying and selling of goods and services that is hidden from the government in order to avoid taxes and/or regulation is known as the: A. dark web B. illicit zone C. underground economy D. Peruvian context

C. underground economy

Economic growth can be illustrated graphically by: A. shifting all supply curves to the right B. an increase in the equilibrium price level C. a shift of a typical demand curve to the right D. a shift outwards of the production possibilities frontier

D. a shift outwards of the production possibilities frontier

Human capital is: A. the new developments in machinery and software B. the goods manufactured to produce other goods and services C.the energy use to bring together the factors of production to produce goods and services D. the knowledge and skills workers acquire from education and training or from life experiences

D. the knowledge and skills workers acquire from education and training or from life experiences

Suppose there is a simple economy with only four unique final goods produced and consumed; computers, bikes, shirts and bread. In the first year, 1100 computers are produced and sold at $575 each, 900 bikes produced and sold at $250 each, 5400 shirts produced and sold at $21 each, and 25600 units of bread produced and sold at $3.50 each. What is the GDP?

1,060,500

Suppose there is a simple economy with only four unique final goods produced and consumed; computers, bikes, shirts and bread. In the first year, 1100 computers are produced and sold at $575 each, 900 bikes produced and sold at $250 each, 5400 shirts produced and sold at $21 each, and 25600 units of bread produced and sold at $3.50 each. In the second year, 1150 computers are produced and sold at $600 each, 925 bikes produced and sold at $225 each, 5575 shirts produced and sold at $23 each, and 24500 units of bread produced and sold at $3.75 each. What is the real GDP in the second year using the first year as a base year?

1,095,325

Suppose there is a simple economy with only four unique final goods produced and consumed; computers, bikes, shirts and bread. In the second year, 1150 computers are produced and sold at $600 each, 925 bikes produced and sold at $225 each, 5575 shirts produced and sold at $23 each, and 24500 units of bread produced and sold at $3.75 each. What is the GDP?

1,118,225

Suppose there is a simple economy with only four unique final goods produced and consumed; computers, bikes, shirts and bread. In the first year, 1100 computers are produced and sold at $575 each, 900 bikes produced and sold at $250 each, 5400 shirts produced and sold at $21 each, and 25600 units of bread produced and sold at $3.50 each. In the second year, 1150 computers are produced and sold at $600 each, 925 bikes produced and sold at $225 each, 5575 shirts produced and sold at $23 each, and 24500 units of bread produced and sold at $3.75 each. What is the percent change of the real GDP from the first year to the second year using the first year as the base year?

3.3

Suppose there is a simple economy with only four unique final goods produced and consumed; computers, bikes, shirts and bread. In the first year, 1100 computers are produced and sold at $575 each, 900 bikes produced and sold at $250 each, 5400 shirts produced and sold at $21 each, and 25600 units of bread produced and sold at $3.50 each. In the second year, 1150 computers are produced and sold at $600 each, 925 bikes produced and sold at $225 each, 5575 shirts produced and sold at $23 each, and 24500 units of bread produced and sold at $3.75 each. What is the percent change of the nominal GDP from the first year to the second year?

5.4

If the CPI in a given year is 300, this means that: A. the economy is experiencing hyper inflation B. prices are 200 percent higher than in the base year C. price have fallen since the base year D. prices are three times higher than the base year

Unsure