PRACTICE TEST MISSED

Wages in excess of their equilibrium level help explain

structural but not frictional unemployment.

The CPI is more commonly used as a gauge of inflation than the GDP deflator is because

the CPI better reflects the goods and services bought by consumers.

In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100. What were Talikastan's net exports in 2015?

$75

Compared to the previous year, an economy produces $2,975 more worth of goods that are consumed by households and imports $556 more worth of goods that are purchased by the government. By how much does GDP increase?

2975

In an economy, there are 67 million of employed people, 3 million of unemployed people, and the population is 101 million. What is the unemployment rate? Express your answer as percentages rounded to 2 decimals if necessary (i.e. 23.567% should be written as 23.57).

4.29

GDP per capita in a hypothetical country was 35,000 in 2015 and 38,245 in 2016. What was the rate of growth of GDP per capita from 2015 to 2016? Calculate the answer and and express it as percentages. Round up to 2 decimals, if needed.

9.27

Which of the following is correct?

The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and some degree of unemployment is inevitable in a complex economy.

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?

The first but not the second

A basic principle of economics is that a country's standard of living depends on its

ability to produce goods and services.

Adam is looking for a job in marketing. He has had some offers and his prospects are promising, but he has not yet accepted a job. Amanda lost her job working for Mercury Bicycles because many customers decided they prefer bicycles manufactured by Ultimate Bicycles instead. Who is frictionally unemployed?

both Adam and Amanda

When the consumer price index falls, the typical family

can spend fewer dollars to maintain the same standard of living.

Which of the following is a source of frictional unemployment?

changes in the composition of demand among industries or regions

Real GDP is not a perfect indicator of economic welfare because ________.

economic welfare depends on many factors not measured or not measured accurately by real GDP

Gross domestic product can be calculated

either by valuing the nation's output of goods and services or by valuing the income generated in the production process.

If changing consumer preferences increase the demand for satellite radios and decrease the demand for video cassette recorders, the economy will likely exhibit

frictional unemployment.

Despite its status as one of the richest countries in the world, Japan

has few natural resources.

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists include these skills as part of Perry's

human capital.

An increase in consumer income will:

increase equilibrium price and quantity if the product is a normal good.

Over time, the price of a gigabyte of computer memory has fallen while the quantity purchased has increased. We can conclude that:

increases in the supply of memory have exceeded increases in demand.

In the equation, GDP = C + I + G + X - M, G refers to

local, state, and federal government expenditure on goods and services, but does not include transfer payments.

Cyclical unemployment is caused by

neither frictional nor structural unemployment

The economy's inflation rate is the

percentage change in the price level from the previous period.