Macro Econ Test 2

Consider a hypothetical economy with the following economic data. What is real GDP for 2017 expressed in terms of 2015 dollars?

$1,038

Refer to the following table for information on components potentially included in the calculation of GDP. Corporate profits $300 Employee compensation 3,000 Private investment 1,100 Net exports 40 Personal consumption 2,700 DGovernment consumption and investment 800 Net income earned abroad 20 Calculate GDP for this economy. (Note: there is only enough information for one of the methods of calculation and not all line items above will necessarily be included

$4640

Suppose that in 2017 China had a population of 386 billion people, a workforce of 776 million and a GDP of $12.24 trillion. What was China's GDP per capita for 2017 (expressed in U.S. dollars).

$8,831.17

Suppose that the population of Westeros is 15 million people. The labor force contains 12 million people, 9.5 million people are employed and the rest are unemployed. What is the unemployment rate?

20.83%

The U.S. GDP was $10,660.29 billion in 2001 and $11,071.46 in 2002. What was the GDP growth rate from 2001 to 2002?

3.86%

Which of the following is the best example of creative destruction?

30.000 travel agents lose their jobs because of the invention of online travel-booking websites like Expedia.com: at the same time 50,000 new jobs open in the smartphone app development industry.

Currently, what percentage of the U.S. GDP is attributable to services?

70%

Consider an economy made up of 100 people, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of people in the civilian labor force is

70.

Which of the following would be considered "not in the labor force?"

A household worker.

Which of the following items would fall under the "consumption" component of GDP for the U.S.?

A ticket purchased by a student to attend a UNA football game

Which of the following statements is an accurate criticism of the unemployment rate?

All of these are accurate criticisms.

Why do we care about growth in output?

All of these are reasons we care about growth in output.

Which of the following would not be included in GDP because of double counting?

An Intel chip purchased by Dell that is put into a computer it sells to a student.

Which of the following would tend to increase the actual unemployment rate?

An increase in the federal minimum wage

Which of the following is incorrect regarding the GDP deflator?

The current base year is 1990 and assigned a value of 100.

Which of the following statements regarding the labor force participation rate in the U.S. is correct?

The participation rate of women has generally risen since the 1940s and married women have accounted for most of this increasc.

Suppose there was a country with an adult (age 16 and over) population of 1,000, of which 100 were unemployed and 700 were employed. Which of the following is true?

The unemployment rate is 12.5 percent.

How are inventories-goods that are produced but not sold during the year-included in a country's GDP?

They are included in private investment.

If net exports for the U.S. is negative, which of the following must be true?

Total imports are greater than total exports.

Is the following statement true or false? "An American corporate executive works at his American-owned firm's international headquarters in Rome, Italy for a year. His earnings over this year are included in Italy's GDP."

True

Is the following statement true or false? "Financial transactions and income transfers are excluded from GDP because they do not reflect production."

True

Which of the following would NOT increase GDP but would increase the standard of living?

Volunteers clean and restore a public park that had become unusable

What is the key difference between frictional and structural unemployment?

With frictional unemployment, workers possess necessary skills to fill job openings, but with structural unemployment they do not.

In order to be considered "employed" an individual must be at least 16 years old and doing which of the following?

Working for pay at least one hour per week.

Which group of people (at least 16 years old) experiences the highest level of unemployment?

Young workers (those 16 to 24 years old)

Some believe that the __________is a more objective measure of job market conditions than the unemployment rate

employment-population ratio

When there are changing conditions in the labor market and individuals must spend time searching for jobs, which type of unemployment will result?

frictional

Gross domestic product (GDP)

is the market value of all finished goods and services produced within a country in a year.

Potential output (GDP) is the

maximum sustainable output level consistent with the economy's resource base.

When the expenditure approach is used to measure GDP, the major components of GDP are

personal consumption, private investment. government consumption and investment, and net exports.

If you wanted to measure whether the output of an economy was increasing or decreasing across time periods, you would use the real GDP data rather than the nominal GDP data because

real GDP adjusts for changes in the general level of prices, but nominal GDP does not.

The consumer price index (CPI) is designed to measure

the impact of price changes on the cost of the typical bundle of goods purchased by households.

Economists define full employment as the level of employment that results when

the rate of unemployment is normal, considering both frictional and structural factors.

Which of the following would be included in this year's gross domestic product (GDP)?

the value of a new domestic automobile, at its sale price

Isabella is 20 years old, a full-time student at a local community college and looking for a job. She has been looking for about a month but has not yet found a desirable job. Based on our class discussion, she is classified as

unemployed and in the labor force.

Which of the following affect the natural rate of unemployment?

Both a and b

Which of the following is defined as "fluctuations in the general level of economic activity as measured by variables such as the rate of unemployment and changes in real GDP."

Business cycle

In the figure above, the expansion phase of the business cycle can be represented by points:

E to G.

Which of the following statements regarding GDP per capita is false?

GDP per capita is GDP divided by the number of people in the labor force.

If an unemployed person gives up looking for a job:

He is no longer counted as unemployed.

GDP excludes leisure and human costs associated with the production of goods and services. As a result:

Increases in life expectancy that result from economic growth are not captured in GDP.

Which of the following is false regarding the natural rate of unemployment?

It is defined as the rate of structural plus cyclical unemployment.

Which of the following is true regarding minimum wages?

Minimum wage legislation may push wages of low-skilled workers above their productivity levels and reduce job opportunities available to them.

Which of the following is NOT a problem with GDP as a measure of output and welfare?

Real GDP can be difficult to compare over time because it may increase as a result of inflation or an increase in actual output.

Which of the following is not a cause of structural unemployment?

Shifts from a manufacturing-based economy to a service-based economy

The switchboard operator industry goes bankrupt and lays off all its workers. In contrast, the booming telecommunications industry hires 50,000 new workers the same year. This type of unemployment resulting from the shift in labor demand from one industry to another would be best categorized under

Structural unemployment

Which of the following is correct regarding the relationship between the actual rate of unemployment and the natural rate of unemployment?

d. Both a and b are correct.

Discouraged workers:

are not included in either the labor force or the unemployment rate.

The type of unemployment caused by recessionary business conditions is

cyclical unemployment.

Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves (that is, household production). For example, busy people with high incomes, rather than cleaning their own houses, hire people to clean their houses. By itself, this change has

caused GDP to rise