AP Macro Unit 2 Study Guide
The table below shows a country's macroeconomic data in 2013. The country's gross domestic product is....
$220 billion
In 2007, the nominal gross domestic product (GDP) was $50 billion and the GDP deflator was 200. The real GDP was
$25 billion
The table above shows the consumer price index for selected years. On the basis of these data, how much did it cost in 1995 to buy the same goods and services that cost $50 in 1929.
$250
Based on the inflation in the table above, what is the unemployment rate for Country X?
6.0 %
Which of the following groups of people would benefit from unanticipated inflation?
II only (borrowers)
Suppose that a typical consumer buys the following quantities of three commodities in 1993 and 1994.
It increased by 25%
Which of the following best explains why transfer payments are not included in the calculation of gross domestic product?
Recipients of transfer payments have not produced or supplied goods and services in exchange for these payments.
The table below shows the cost of the same representative basket of goods in the base year 2012 and 2013, and the average weekly nominal wage in 2012 and 2013.
The CPI in year 2013 is 120.
The value of which of the following is counted in the United States gross domestic product?
A car produced in the United States and sold in Europe.
A lender will realize unexpected benefit when the
Actual inflation rate is lower than the anticipated inflation 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.
Which of the following is true according to the circular flow model?
Households are demanders in the product markets and suppliers in the factory markets
If unemployed workers become discouraged and give up trying to find work, the number of workers employed and the unemployment rate would change in which of the following ways?
Number of Workers = no change Unemployment Rate = decrease
Which of the following will be counted as unemployed by the United States Bureau of Labor Statistics?
Persons who were fired from their previous jobs and are actively applying for work
The consumer price index measures which of the following?
The change over time of the weighted prices of a particular group of goods and services
Which of the following can be concluded from the data above?
The economy was experiencing inflation during years 2 and 3.
Which of the following best describes an economy at full employment?
There is frictional, but not cyclical, unemployment
Which of the following allows an individual to gain from unexpected inflation?
borrowing money at a fixed interest rate
In the measurement of gross domestic product, investment includes spending by
business on capital goods and changes in inventories
The official unemployment rate understates the unemployment level in the economy because the official unemployment rate
ignores unemployment and discouraged workers
In one year, spending on consumption, investment, and government purchases was equal to 103 percent of a country's gross domestic product. This would be possible only if
net exports were negative
The consumer price index (CPI) is criticized for
overstating the true burden of inflation because it does not recognize consumers' ability to substitute goods and services as prices change
If nominal gross domestic product fell while real gross domestic product rose, what must be true?
the inflation rate was negative
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
The natural rate of unemployment is the unemployment rate when
there is no cyclical unemployment
