Macro Measures Review : (

Real GDP is nominal GDP adjusted for: double counting. changes in prices. population. imports. interest rates.

changes in prices.

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is: 4%. 7.5%. 10%. 67.5%. 30%

10%.

YEAR: 2 OUTPUT: 3 PRICE PER UNIT: 4 The value of Year 2's output in real dollars is: $4. $12. $6. $16. $15.

$15

YEAR: 4 OUTPUT: 6 PRICE PER UNIT: 6 Use Table 11-2. The value of Year 4's output in nominal dollars is: $6. $24. $30. $36. $12.

$36.

A minimum wage of $7.25 per hour might cause structural unemployment if the equilibrium wage in that labor market is: $7.25. $8.00. $10.00. $7.30. $6.85.

$6.85.

If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate is: 5%. 7.5%. 15%. 20%. 30%

20%.

If the CPI is 120 in Year 1 and 150 in Year 2, then the rate of inflation from Year 1 to Year 2 is _____. 10% 20% 25% 50% 100%

25%

YEAR: 4 CONSUMER PRICE INDEX: 125 YEAR: 5 CPI: 150 The approximate annual rate of inflation from Year 4 to Year 5 is _____ percent.

5 10 19 20 150

Which of the following best represents the expenditure approach for computing GDP? GDP = C+ I + G - X + IM GDP = C + I + G + X - IM GDP = C + I + G + Taxes - Value Added GDP = C + I + G + Taxes + X + IM GDP = C + I + G + Taxes - Transfers + X - IM

GDP = C + I + G + X - IM

Which one of the following transactions is included in a current year's GDP as investment spending? ABC company purchased 10,000 shares of IBM stock. Ronnie bought a new BMW. Anton purchased his friend's condo. Maggie bought a play-gym set for her day-care business. Melanie bought a new washing machine for her condominium.

Maggie bought a play-gym set for her day-care business.

Which of the following is a LIKELY response to inflation? People choose to carry higher money balances. People tend to make fewer transactions. People tend to make more transactions. People tend to hold on to fewer interest-bearing assets. People tend to keep more cash on hand.

People tend to make more transactions.

Which one of the following is an example of consumption spending that would be counted toward GDP this year? Samantha bought an oven for her cooking show on Food Network. Stephanie bought a laptop for her brother. Jim purchased 200 shares of Google stock. Mr. Smith spent $1500 to buy a used car for his son. Eli invested $2000 in a mutual fund through his employer.

Stephanie bought a laptop for her brother.

Deflation is when there is: a decrease in unemployment. a decreasing aggregate price level. a decline in wages. a recession. a stock market crash.

a decreasing aggregate price level.

Inflation is when there is: a rising aggregate price level. an expansion of output. a rise in wages. a rise in the unemployment rate. an increase in national income.

a rising aggregate price level.

The simplest circular-flow model shows the interaction between households and firms. In this model: only barter transactions take place. households and firms interact in the market for goods and services, but firms are the only participants in the factor markets. firms supply goods and services to households, which, in turn, supply factors of production to firms. attention is focused on "real" flows of goods, services, and factors of production, but money flows between households and firms are ignored for simplicity. firms supply factors of production to households, which, in turn, supply goods and services to the firms.

firms supply goods and services to households, which, in turn, supply factors of production to firms.

Anna recently moved to Boston in order for her husband Joe to begin a new job as an economics professor at Harvard. Anna is an experienced surgeon who is currently interviewing with several different hospitals in Boston. Anna is currently: seasonally unemployed. structurally unemployed. cyclically unemployed. counted as employed since she is likely to receive a job offer soon. frictionally unemployed

frictionally unemployed

Shoe-leather costs refer to the: effect of inflation on the prices of food, clothes, and other necessities. increased cost of transactions due to inflation. high price of leather goods. effect of inflation on transportation costs. effect of inflation on clothing.

increased cost of transactions due to inflation.

When inflation rises quickly: borrowers will be hurt and lenders will benefit. lenders will be hurt and borrowers will benefit. both borrowers and lenders will be hurt. both borrowers and lenders will benefit. lenders will be hurt and those on fixed incomes will benefit.

lenders will be hurt and borrowers will benefit.

Investment spending represents spending on: raw materials. stocks. mutual funds. corporate bonds. productive physical capital.

productive physical capital.

The intermediate goods are not counted in the calculation of GDP, because: that involves double-counting. these goods are not produced for the market. these are produced in the underground economy. these goods involve financial transactions. these goods were not produced in the current year.

that involves double-counting.

The inflation or deflation rate is: the change in a price index divided by the initial value of the index. the change in a price index divided by the new index number. the difference between the initial price index number and the new price index number. computed by dividing the old price index number by the new price index number. the rate of change in real GDP from year to year.

the change in a price index divided by the initial value of the index.

The unemployment rate is defined as: the percentage of the labor force that is unemployed. the number of people unemployed. the ratio of the labor force to the number of people unemployed. the average length of time someone is unemployed. the percentage of the population that is unemployed

the percentage of the labor force that is unemployed

Employment in the labor force is defined as: the total labor force. the total population of working age. the total number of persons actively working. the total number of persons not unemployed. the total population of working minus the number of persons unemployed.

the total number of persons actively working

The labor force is defined as: the total persons employed. the total population. the total of the population of working age. the total of the persons employed and unemployed. the total of the population of working age minus those voluntarily not seeking to work.

the total of the persons employed and unemployed

GDP is the: total market value of all final goods and services produced in one year. total accumulated wealth of an economy. volume of all dollar transactions made in an economy in one year. dollar amount of all sales made in the economy in one year. total quantity of money in circulation in the economy in one year.

total market value of all final goods and services produced in one year.