Actual Test 1 Questions Macroeconomics

In a small economy, gross investment in 2009 is $1500, consumption spending is $6000, net investment is $200, government spending is $1500, exports are $2000 and imports are $1000. What is GDP for this economy in 2009 $10,700 $10,300 $10,200 $10,000

$10,000

Consider the table of production and price statistics for a small economy in 2009, if the economy only produces the four goods listed below, what is the GDP for 2009 Product Quantity Price per unit Coke 10000 $2 Iphones 2000 $150 Backpacks 4000 $25 Hershey 8000 $1 $428,000 $267,000 $24,000 $1,424

$428,000

The CPI in 1990 was 131 and the CPI in 2009 was 215, if you earned a salary of $40,000 in 1990 what would be a salary with equivalent purchasing power in 2008 $52,400 $63,649 $56,000 $105,649

$63,649

The formula for CPI is Expenditures in the current year/expenditures in the base year x 100 Expenditures in the base year/expenditures in the current year Expenditures in the current year x expenditures in the base year/100 expenditures in the base year x 100/expenditures in the current year

(Expenditures in the current year / expenditures in the base year) x 100

If the nominal interest rate is 6% and the inflation rate is 9% then the real interest rate is -3% 3% 6.67% 15%

-3%

If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years 270% 50% 5% 2.7%

2.7%

In an underground economy, the production of goods and services Are not measured nor included in GDP Are usually to insignificant to be included in GDP Are not measure but are included in GDP Are measured and included in GDP

Are not measured nor included in GDP

In the circular flow diagram ____ supply the factors of production and ____ goods and services Households, buy Firms, buy Firms, sell Households, sell

Households, buy

A final good is one that Is a natural resource used to produce a good Is used in the production of another good Is purchased as an input in the production process Is purchased by its final user

Is purchased by its final user

The GDP deflator is equal to Real GDP divided by nominal GDP, multiplied by 100 Real GDP divided by nominal GDP Nominal GDP divided by real GDP Nominal GDP divided by real GDP, multiplied by 100

Nominal GDP divided by real GDP, multiplied by 100 (Nominal GDP/Real GDP) x 100

Investment spending includes spending on Stocks Transfer payments Changes in business inventories Food

Changes in business inventories

Workers laid off as a result of a recession suffer Seasonal unemployment Frictional unemployment Structural unemployment Cyclical unemployment Natural unemployment

Cyclical unemployment

If the number employed is 190 million, the working age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is 5% 5.2% 8% 10% 50%

5%

Which of the following is an example of a worker experiencing frictional unemployment A united airlines pilot loses her job because of lack of demand for air travel A worker quits his job at the post office to find more interesting work An employee is laid off because the economy is suffering a recession A computer programmer loses her job because it is outsourced to india

A united airline pilot loses her job because of lack of demand for air travel

Gross domestic product in the economy is measured by the Dollar value of all final goods and services produced in the economy Total number of goods produced in the economy Total number of services produced in the economy Total number of goods and services produced in the economy

Dollar value of all final goods and services produced in the economy

A transfer payment is a payment by the government to an individual For a service For which the government does not receive a good or service in return For an investment good For a debt owed For a consumption good

For which the government does not receive a good or service in return

The short term unemployment arising from the process of matching workers with jobs is called Frictional unemployment Structural unemployment Cyclical unemployment unnatural unemployment Seasonal unemployment

Frictional unemployment

Scott is a woodworker and charges $125 an hour for his time manufacturing custom made wood products. For his wife's birthday, he designs and creates an intricate Birdseye maple jewelry box that takes him 15 hours to complete. By how much and in what direction does GDP change as a result of his efforts GDP rises by $125 GDP falls by $18,875 GDP is not affected by Scott's production of the jewelry box GDP rises by $1875

GDP is not affected by Scott's production of the jewelry box

The best measure of the standard of living is Real GDP Real GDP per capita Nominal GDP per capita Nominal GDP

Real GDP per capita

When production in an economy grows more quickly than the population in that economy, which of the following must be occurring Real GDP per capita is rising Real GDP is falling Incomes are growing at a slower rate than the population

Real GDP per capita is rising

People who lost their jobs as hand drawn animators because of the popularity of computer generated 3D animations are examples of persons who are suffering Seasonal unemployment Structural unemployment Frictional unemployment Cyclical unemployment Unnatural unemployment

Structural unemployment

What are the three main kinds of unemployment Cyclical, structural, and temporary Temporary, permenant, and volunteer Structural, frictional, and cyclical Frictional, seasonal, and cyclical

Structural, frictional, and cyclical

Check exam 1 question 18

Table A

Check exam 1 Question 25

Table B

Check exam 1 Question 15

Table C

Check exam 1 Question 14

Table D

An example of an intermediate good would be The potato chips sold by quiznos A sub sandwich sold by quiznos The bread that goes into a sub sandwich that is sold by quiznos The soda pop sold by quiznos

The bread that goes into a sub sandwich that is sold by quiznos

The real rate of interest The nominal rate of interest The nominal interst rate plus the inflation rate The interest rate determined by the supply and demand in the money market The nominal interest rate minus the inflation rate

The nominal interest rate minus the inflation rate

The rule of 70 states that It takes an economy 70 years to double its real GDP The number of years it takes an economy to double in size is 70/growth rate The number of years it takes an economy to double in size is the growth rate/70 The number of years it takes an economy to double in size is the growth rate x 70

The number of years it takes an economy to double in size is 70/growth rate

The labor force participation rate is defined as The percentage of the labor force that is unemployed The percentage of the working age population in the labor force The percentage of the working age population that is employed The percentage of the working age population that is unemployed The percentage of the labor force that is employed

The percentage of the working age population in the labor force

Labor productivity is The quantity of capital one worker can produce in one day The quantity of output produced in one hour by one machine The quantity of output produced in one hour by several workers The quantity of output produced by one worker or by one hour of work

The quantity of output produced by one worker or by one hour of work

Total income in an economy is equal to Firm revenues GDP minus net exports Income minus taxes The sum of wages, interest, rent, and profit

The sum of wages, interest, rent, and profit

How are intermediate goods treated in the calculation of GDP Their value is counted separately, and their value is also included as part of the value of the final good for which they are an input Their value is not counted separately, but included as part of the value of the final good for which they are an input They are included only if they are imported Their value is counted separately, but is not included as part of the value of the final good for which they are an input

Their value is counted separately, but included as part of the value of the final good for which they are an input

Discouraged workers are Workers who have consistently been looking for work for more than 4 weeks Workers who have stopped looking for work because they believe there are no jobs for them Workers who find their current jobs unfulfilling and are considering a job change Workers who have a part time job but want a full time job

Workers who have stopped looking for work because they believe there are no jobs for them

Which of the following transactions would be included in the official calculation of GDP Firestone sells $2 million worth of tires to general motors You illegally download music off the internet to put on your new ipod A student buys a used textbook at the bookstore You wash and wax your fathers car as a favor to him You buy a new ipod

You buy a new ipod