AP Macro Unit 2

In 2016 the nominal GDP for Country XX was $330 billion and the GDP deflator was 110. The real for 2016 was

$300 billion

The economy of Galactica is expanding and the actual unemployment rate exceeds the natural rate of unemployment for which year in the above diagram?

2002

Which of the following unemployed individuals represents frictional unemployment?

Janet, an accounting graduate who is interviewing with a number of accounting firms.

As a measure of economic performance, GDP accounts for which of the following?

Souvenir gifts purchased by tourists domestically

If 2012 is the base year, which of the following is true?

The CPI in year 2013 is 120.

What is the nation's unemployment rate?

9%

Which of the following will happen if the actual inflation rate is greater than the expected inflation rate?

Borrowers of fixed interest rate loans will be better off.

Which of the following allows an individual to gain from unexpected inflation?

Borrowing money at a fixed interest rate

Which of the following explains why the rate of change of the consumer price index (CPI) tends to overstate the actual inflation rate?

Consumers tend to substitute lower-priced goods that may not be represented in the basket of goods.

In 2017 Sabrina earned an annual salary of $100,000 as an engineer. In 2018, her income rose to $105,000. The inflation rate in 2018 was 2%. How did Sabrina's nominal income and real income change in 2018 compared to 2017?

Nominal income increased and real income increased.

Which of the following situations will benefit lenders of fixed interest rate loans?

The actual inflation rate is less than the expected inflation rate.

If a nation's actual real GDP is less than potential real GDP, which of the following must be true?

The actual rate of unemployment exceeds the natural rate of unemployment.

GDP does NOT account for which of the following?

The depletion of natural resources

Based on the above table which of the following is most likely correct?

The natural rate of unemployment is 5 percent.

Which of the following transactions will be included in the calculation of Country X's Gross Domestic Product (GDP) in 2020?

The purchase of new construction equipment

Gross domestic product is equal to which of the following

The sum of income paid to all the factors of production

If an economy is at the peak of the business cycle, then which of the following is true about the state of the economy?

There is an inflationary gap.