ECON 610 ch 19,21,22

Assume that in the year 2010, the US Nominal GDP was $15 trillion, while the GDP deflator was 200. Calculate the US Real GDP for 2010. a) $0.75 trillion b) $300 trillion c) $7.5 trillion d) $30 trillion

c) $7.5 trillion

Henrique is a baseball fan and attends several games per season. His expenses per season are listed in the table below: Year 1 5 Baseball Tickets: $500 Jersey: $100 Food: $150 Transport: $50 Year 2 5 Baseball Tickets: $600 Jersey: $120 Food: $150 Transport: $80 Calculate the inflation rate for Henrique's baseball season between year 1 and 2. a) 0.18% b) 1.6% c) 18.5% d) 15.8%

c) 18.5%

The rate of inflation in Zimbabwe rose in 2018 from 10.6% to 577.21% in 2020. What was the positive effect of this unexpected inflation on the residents of the country? a) None because everybody is hurt by inflation b) It helped creditors c) It helped debtors d) Helped those people on fixed incomes

c) It helped debtors

If discouraged workers are included in the determination of the unemployment rate, what effect will it have on the computed rate? a) It will lower it because it will reduce the number of unemployed. b) There will be no impact. c) It will raise it because there are always discouraged workers. d) There is no relationship between discouraged workers and the unemployment rate determination.

c) It will raise it because there are always discouraged workers.

Assuming that the Consumer Price Index increases from 100 to 120... a) More money would be needed to buy the same amount of goods, implying that the value of money increases b) Less money would be needed to buy the same amount of goods, implying that the value of money increases c) More money would be needed to buy the same amount of goods, implying that the value of money drops d) Less money would be needed to buy the same amount of goods, implying that the value of money drops

c) More money would be needed to buy the same amount of goods, implying that the value of money drops

Which statement best describes the difference between Nominal and Real GDP? a) Nominal GDP is calculated using current market prices, while Real GDP is calculated using the prices of the previous year. b) Real GDP is calculated using current market prices, while Nominal GDP is calculated using the average prices of the last 5 years. c) Real GDP is Nominal GDP which has been adjusted to remove the distorting effects of inflation. d) Nominal GDP is Real GDP that has been adjusted to remove the distorting effects of inflation.

c) Real GDP is Nominal GDP which has been adjusted to remove the distorting effects of inflation.

If you are hired by an organization, you would be least hurt by inflation if a) The government increases social security retirement payments in anticipation of expected inflation b) You increase savings in your bank account in anticipation of expected rise in inflation c) Your employer has a cost-of-living adjustment clause in the employment contract d) If your employer provides fixed annual increases in salaries and benefits in the employment contract

c) Your employer has a cost-of-living adjustment clause in the employment contract

Based on the GDP information in the table below for 2 countries: GDP per capita in 2020 Country A: $30,000 Country B: $25,000 GDP per capita in 2021 Country A: $32,000 Country B: $30,000 a) Country B has a higher GDP in 2021 than country A. b) Country A has improved their standard of living in 2021 more than country B. c) Countries A and B have improved their standard of living in 2021, but A's living standards have lowered compared to B. d) Countries A and B have improved their standard of living in 2021 but A has higher standards of living than B.

d) Countries A and B have improved their standard of living in 2021 but A has higher standards of living than B.

Workers at a car-manufacturing plant in Detroit, Michigan are laid off because of a recession in the economy. The workers' resulting unemployment can be described as: a) Structural b) Frictional c) Seasonal d) Cyclical

d) Cyclical

If you work part-time when you would like to work full time, or have a full-time job that doesn't utilize all your skills and talents, then you are counted as: a) Frictionally unemployed b) Structurally unemployed c) A discouraged worker d) Underemployed

d) Underemployed

Which of the following equation represents GDP measured by the components of demand a. Durable Goods + Services + Government Spending + Trade Balance = GDP b. Durable Goods + Nondurable goods + Services + Structures + Change in inventories = GDP c. Consumption + Government Spending + Imports + Investment = GDP d. Consumption + Government Spending + Trade Balance + Investment = GDP

d. Consumption + Government Spending + Trade Balance + Investment = GDP

If the Consumer Price Index was 155 in one year and 165 in the next year, then the rate of inflation from one year to the next was approximately: a) 10% b) 6.5% c) 6.1% d) -6.5%

b) 6.5%hint: (165-155)/155 X100

Which of the following statements best describe how economists calculate GDP? a) Economists at the Congressional Budget Office calculate GDP for a given year by adjusting the previous year's GDP with inflation. b) Economists at the Bureau of Economic Analysis pull together data on sales, imports, exports, government purchase and investments from various government sources every 3 months. c) Economists at the Bureau of Labor Statistics collect data from surveys sent to consumers, private firms and government agencies and add them up every 3 months. d) Economists at the Census bureau collect data from surveys sent to consumers, private firms and government agencies and add them up on a yearly basis.

b) Economists at the Bureau of Economic Analysis pull together data on sales, imports, exports, government purchase and investments from various government sources every 3 months.

How do economists define unemployed workers? a) Not currently working b) Not currently working but actively searching for work c) Although currently working, they are not happy with their current job d) Working on contract for a limited time

b) Not currently working but actively searching for work

An auto company decided to relocate its offices from Huntsville, Alabama to Orlando, Florida. The human resources manager of the auto company refuses to relocate to Orlando due to family obligations. While she is searching for a new job, the manager will be considered: a) Not fit for consideration for any human resource job b) Structurally unemployed c) Frictionally unemployed d) Cyclically unemployed

b) Structurally unemployed

The GDP deflator is.. .a) A price index used to remove the distorting effect of inflation from Nominal GDP. b) A price index used to remove the distorting effect of inflation from Real GDP. c) The inflation rate used to adjust Nominal GDP. d) The difference between Nominal and Real GDP.

.a) A price index used to remove the distorting effect of inflation from Nominal GDP.

Based on the following data, GDP would equal ___ while Net National Product equals In Billions $20 Government Purchases $5 Exports $10 Imports $5 Depreciation $25 Investments $70 Consumption $15 Domestic US businesses production abroad $6 Foreign businesses production in US a) $110 billion; $114 billion b) $130 billion; $121 billion c) $130 billion; $139 billion d) $110 billion; $101 billion

a) $110 billion; $114 billion 20-5+10+5+25+70-15 20+5+10+5+25+70-15-6

Based on the information in the table below, calculate the unemployment rate: Total adult population over the age of 16: 83 million Total in the labor force: 63 million Total Employed: 60 million Total Unemployed: 3 million Total out of the labor force: 20 million a) 4.76% b) 31.7% c) 3.61% d) 75.9%

a) 4.76% hint:(Unemployed/Total labor force) x 100

In 2010, the country of Utopia experienced the highest contraction of their economy at 10% in the previous 20 years before a new expansion phase. In 2010, the economy of Utopia... a) Had reached a trough. b) Was in a recovery phase. c) Was in an expansion phase. d) Had reached a peak.

a) Had reached a trough.

Employees at a toy-manufacturing factory are let go because robots have been installed to replace humans. What type of unemployment faces the laid-off workers? a) Structural b) Frictional c) Cyclical d) Seasonal

a) Structural

Select the statement below which highlights the role of real GDP: "The growth in real GDP has been much lower than expected over the last few years and... a) Unemployment has been rising as a result creating hardship for many in the country. b) The government needs to adjust how GDP is being measured c) The country is currently in a mild but lasting recession. d) Inflation is making the growth numbers more optimistic.

a) Unemployment has been rising as a result creating hardship for many in the country.

Miriam is actively searching for a new job after she voluntarily quit her job. Miriam is now considered: a) Cyclically unemployed b) Frictionally unemployed c) Structurally unemployed d) Not eligible for future employment

b) Frictionally unemployed

When most workers are classified as not being in the labor force, when in reality they are actively searching for work, then the unemployment rate will be? a) Neither understated nor overstated b) Understated c) Overstated d) Either understated or overstated

b) Understated

Which of the following was a way for the Bureau of Labor Statistics to reduce the quality/new good bias in its calculation of the CPI? a) Allow for some substitution amongst products. b) Update the list of products included in the CPI more often and rapidly .c) Remove energy and food prices. d) Automatically reduce the inflation by 0.5% to account for quality/new good bias.

b) Update the list of products included in the CPI more often and rapidly.

The table below contains the price indexes for the macroeconomy for several years. Price Index 2010 Base year: 100 2011: 105 2012: 130 2013: 145 2014: 140 Calculate the inflation that took place in 2012 a) 25% b) 19.2% c) 23.8% d) 80.8%

c) 23.8%

The Consumer Price Index... a) Measures the change in all prices of final products in the macroeconomy b) Measures the change in energy and food prices in the macroeconomy c) Measures the change in the cost of living for a typical US household d) Measures the change in all inputs of production in the macroeconomy

c) Measures the change in the cost of living for a typical US household

Which measures the changes in the prices of a "market basket" of some 100 goods produced by typical manufacturers? a) The GDP price index b) The International Pricing Index c) The Producer Price Index d) The Consumer Price Index

c) The Producer Price Index

Assume the real GDP of Brazil in 2020 was R 6 billion (Real). If the exchange rate was 1 Real = $0.25, calculate the real GDP of Brazil in US dollars in 2020. a. $2.4 billion b. $4 billion c. $1.5 billion d. $24 billion

c. $1.5 billion

Britney is a baseball fan and attends several games per season. Her expenses per season are listed in the table below: Year 1 5 Baseball Tickets: $500 Jersey: $120 Food: $150 Transport: $60 Year 2 5 Baseball Tickets: $560 Jersey: $150 Food: $160 Transport: $70 Assuming that year 1 is the base year, calculate the price index for year 1 and for year 2. a) 100, 88 b) 88, 100 c) 88, 113 d) 100, 113

d) 100, 113

Based on the information in the table below, calculate the labor force participation rate, and the percentage or workers out of the labor force: Total adult population over the age of 16: 83 million Total in the labor force: 63 million Total Employed: 60 million Total Unemployed: 3 million Total out of the labor force: 20 million a) Participation rate: 24.1%, Out of the labor force:75.9% b) Participation rate: 5% ,Out of the labor force: 15% c) Participation rate: 24.1%, Out of the labor force: 92.5% d) Participation rate: 75.9%; Out of the labor force: 24.1%

d) Participation rate: 75.9%; Out of the labor force: 24.1%