Quiz#2 Macro
A basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals
225
The above table gives data for hypothetical nation. Gross domestic product is
4,079 billion
In the United states in 1996, the population was 26.5 million and the working age population was 200.6 million. There were 133.9 million people in the labor force and 126.7 of them were employed. The unemployment rate equaled:
5.4%
If the CPI for this year is 220 and the CPI for the last year was 215, the inflation rate is
just over 2 percent [220-215/215]x100= 2.3%
Which population category equals the sum of employed and unemployed people?
labor force
In any year, real GDP
might be greater or less than potential GDP
A recession is commonly defined as a period with
negative growth rate in real GDP that lasts at least two quarters
A common definition of recession is a period of time
of at least 5 months during which real GDP decreases
In the above figure the letters A,B, and C represent which positions in the business cycle?
peak, recession, and expansion, respectively
In the above figure, which point represents the under use of resources?
point G
Represents 5% inflation rate
100,105,110.25, 115.76
Refer to the table above. During which of the above years the purchasing power of the president's salary highest?
1940
Your father tells you he earned $1.50 per hour when he was 16 in 1969. Given that the CPI was 36.0 in 1969 and the 215 in 2008, how much would you have earn in 2008 in order to have the same real wage as your father in 1969.
$8.95
Assume that between 1998 and 2008, nominal GDP increased from $7trillion to 12$trillion and that the price index rose from 100 to 133.3. Which of the following expresses Real GDP for 2008 in terms of 1998 prices?
$9.0trillion
Inflation
An increase in the price level is defined as
Real GDP in the current year is equal to nominal GDP in the current year multiplied by the
GDP deflator in the base year divided by the GDP deflator in the current year.
GDP equals to
C+I+G+(X-M)
In 2008(Real: 13.2 trill & P: 304mill) real GDP increased or decreased relative to 2007(Real: 13.2 tri & P: 302mill)?
Decreased
The three types of unemployment are
Frictional, Structural, and Cyclical
In 2007(Real: 13.2 tri & P: 302mill) , real GDP per capita increased or decreased relative to 2006(Real: 13 trill & P: 300mill)?
Increased
It is estimated that in 2007, Mexico had a population of 110 million and Brazil had a population of 190 million. At the same time, Mexico's GDP was $1trillion while Brazil's was 1.31 trillion. The data shows that:
Mexicos's GDP per person was $9090 in 2007.
General Motors Corporation (A US based firm) produces a Saab vehicle in Sweden, and sells it in the US. In which country's GDP is it included?
Sweden because it was produced there
Last year the Jones family earned $40,000. This year their income is $42,000. In an economy with an inflation rate of 10%, which of the following is correct?
The Jones family nominal income has increased and their real income has fallen.
Correct Statement
To isolate the increase in production from the rise in prices, we distinguish between real GDP and nominal GDP.
Cyclical Unemployment
Unemployment that is the result of recessions
If you received a 3% increased in your nominal wage. Over the year, inflation ran about 6%. Which of the following is true?
Your real wage fell.
The unemployment rate is calculated as
[(unemployment)/(labor force)]x100
Supposed the CPI last year is 121 and the CPI this year is 137. The correct method to calculate the inflation rate is
[137-121)/121]x100= 13.2
If the economy enters an expansion
cyclical unemployment decreseases
Real GDP
does not include a measure of leisure time, environmental quality, or political freedom and social justice.
Full employment means that
there is no cyclical unemployment
During an economic expansion
real GDP "increases" and unemployment "decreases"
An important difference between GDP deflator and the consumer price index is that
the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consume price index reflects the prices of some goods and services bought by consumers.
The consumer price index (CPI) and the GDP deflator are designed to measure the degree to which
the cost of purchasing a bundle of good has changed over time.
In the base year for the GDP deflator is 200 and the value of the GDP deflator is 2003 was 107, this indicated that the general levels of prices...
was approximately 7% higher in 2003 than in 2000
Which people speak of the labor force participation rate, they are actually talking about the percentage of
working-age people who are either working or seeking for work