Econ test 2

Employed 5,000 Unemployed 500 Not in the labor force 2,000 (16 years of age or older) The unemployment rate is: a) 9.09% b) 10% c) 11% d) cannot be determined from this information

a) 9.09%

In calculating GDP, the largest component ot total expenditures is: a) consumption b) net exports c) imports d) none of the above

a) consumption

Gross Domestic Product can be measured as the sum of: a) consumption, investment, government purchases, and net exports b) consumption, transfer payments, wages and profits c) investments, wages, profits, and intermediate production d) final goods and services, intermediate goods, tranfer payments, and rent e) Net National Product, Gross National Product, and Disposable personal income

a) consumption, investment, government purchases, and net exports

If U.S. GDP exceeds U.S. GNP, then: a) foreigners are producing more in the United States than Americans are producing in foreign countries. b) Americans are producing more in foreign countries than foreigners are producing in the United States. c) real GDP exceeds nominal GDP d) real GNP exceeds nominal GNP e) intermediate production exceeds final production

a) foreigners are producing more in the United States than Americans are producing in foreign countries.

The sum of frictional and structural unemployment is thought of as the: a) natural rate of unemployment b) normal rate of unemployment c) cyclical rate of unemployment d) seasonal rate of unemployment

a) natural rate of unemployment

An example of an intermediate product is: a) the purchase of steel by GM from USX Corporation b) the purchase of a cheeseburger by a hungry student c) the purchase of golf shoes by a retired economics professor d) all of the above

a) the purchase of steel by GM from USX Corporation

Suppose that nominal GDP increases in 1991 but real GDP decreases during the year. It can be concluded that: a) there was an economic expansion in 1991 b) inflation was zero in 1991 c) there was an economic contraction in 1991 d) the price level fell in 1991

a) there was an economic contraction in 1991

A man who quits his job to search for a job that take full advantage of his educational background represents an example of: a) frictional unemployment b) structural unemployment c) cyclical unemployment d) seasonal unemployment

a)frictional unemployment

Employed 5,000 Unemployed 500 Not in the labor force 2,000 (16 years of age or older) The labor-force participation rate is: a) 71.43% b) 73.33% c) 90.91% d) 136.36%

b) 73.33%

An individual who is not working and who has given up loooking for work is classified as: a) unemployed b) a discouraged worker c) unemployable d) hard core unemployed

b) a discouraged worker

Real GDP is measured in _________ prices while nominal GDP is measured in___________ prices. a) current year; base year. b) base year; current year. c) intermediate; final. d) foreign; domestic.

b) base year; current year

U.S. Gross Domestic Product (in contrast to GNP) measures the production and income of: a) Americans and their factories no matter where they are located in the world b) people and factories located within the borders of the United States c) the domestic service sector only d) the domestic manufacturing sector only e) none of the above

b) people and factories located within the borders of the United States

For a given year, GNP includes the market value of the following: a) second-hand cars b) services c) stocks and bonds d) land e) bartered goods

b) services

An auto worker in Ohio who loses her job because the company relocated the plant represents an example of: a) frictional unemployment b) structural unemployment c) cyclical unemployment d) natural unemployment

b) structural unemployment

An individual who cannot find a job because his or her job skills have become obsolete is an example of: a) frictional unemployment b) structural unemployment c) cyclical unemployment d) seasonl unemployment

b) structural unemployment

The portion of unemployment that is due to changes in the shifts in the economy that result in a significant loss of jobs in certain industries is called: a) frictional unemployment b) structural unemployment c) cyclical unemployment d) natural unemployment

b) structural unemployment

The value of plant and equipment worn out in the process of manufacturing goods and services is measured by: a) consumption b) depreciation c) Net National Product d) investments e) intermediate production

b)depreciation

Inflation is an increase in: a) the price of one item b) the overall price level c) the average income level d) real gross national product

b)the overall price level

If a cobbler buys leather for $100 and thread for $50 and uses them to produce and sell $500 worth of shoes to consumers, the contribution to GDP is: a) $50 b) $100 c) $500 d) $600 e) $650

c) $500

The economy is in a recession and the housing market is in a slump. As a result of this, a real estate firm lays off half of its real estate agents. This is an example: a) frictional unemployment b) structural unemployment c) cyclical unemployment d) natural unemployment

c) cyclical unemployment

The increase in unemployment that occurs during recessions and depressions is called: a) frictional unemployment b) structural unemployment c) cyclical unemployment d) normal unemployment

c) cyclical unemployment

During the severe recession of the early 1980s, cyclical unemployment increased as the recession continued. This increase in cyclical unemployment would have: a) increased the natural rate of unemployment b) decreased the natural rate of unemployment c) had no effect on the natural rae of unemployment d) either increased or decreased the natural rate of unemployment

c) had no effect on the natural rate of unemployment

Which component of GDP is most likely to be negative? a) gross private domestic investment b) net exports c) consumption d) imports e) government purchases

c) imports

Frictional unemployment is the: a) portion of the unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries b) unemployment that occurs during recessions and depressions c) portion of the unemployment that is due to normal working of the labor market d) unemployment that results when people become discourages about their chances of finding a job so they stop looking for work

c) portion of unemployment that is due to normal working of the labor market

Which of the following is a true statement concerning transfer payments? a) transfer payments are included in the imports category of GNP b) tansfer payments ultimately must be repaid to the governmnet by recipients c) transfer payments are payments made by the government for which no good or services is currently received in question d) transfer payments are inlcuded in the net exports category of GNP

c) transfer payments are payments made by the government for which no good or services is currently received in question

Depreciation: a) represents a firm's expenditure to add to its capital stock b) is a decline in the value of a firm's corporate stock c) estimates the value of capital goods that wear out over the year d) is the reduction in business inventories per year

c)estimates the value of capital goods that wear out over the year

Which of the following would be excluded from 1989 GDP? a) a 1989 Honda made in Tennessee, b)a haircut, c) a realtor's services, d) a home built in 1988 and first sold in 1989, e) all the above should be counted in 1989 GDP

d) a home built in 1988 and first sold in 1989

GDP would include which of the following? a) housework, b) illegal drug sales, c) intermediate sales, d) consulting services or e) the value of taking a day off from work

d) consulting services

The index used most often to measue inflation is the: a) producer price index b) GDP deflator c) wholesale price index d) consumer price index

d) consumer price index

U.S. GDP would exclude which of the following? a) lawyer services purchased by a home buyer b) lawn care services purchased by a home owner c) a new bridge purchased by the state of Texas d) cotton purchased by Lee Jeans e) the purchase of a new Mazda produced in Illinois

d) cotton purchased by Lee Jeans

During recessions, the number of discouraged workers ___________ and this___________ the unemployment rate. a) falls; reduces b) falls; increases c) increases; increases d) increases; reduces

d) increases, reduces

Nominal GNP is a) is the current market value of production of both final and intermediate products over a period of one year. b) is usually less than real GNP c) will not increase if prices increase while the production of final products remain constant d) is the current market value of aggregate production of final products over a period of one year

d) is the current market value of aggregate production of final products over a period of one year

An example of a transfer payment is; a) military aid to a foreign country b) a private firm's payments of dividends to stockholders c) military expenditures d) old - age pensions

d) old age pensions

In the National Income and Product Accounts, disposable income is: a) the best measure of income earned in the nation during a year b) GNP less capital consumption allowances c) personal income less personal saving d) personal income less personal taxes

d) personal income less personal taxes

If nominal GDP in 2002 exceeds nominal GDP in 2001, then the production of output must have: a) risen b) fallen c) stayed the same d) risen or fallen because there is not enough information to determine what happened to real input

d) risen or fallen because there is not enough information to determine what happened to real input

Gross National Product (GNP) is a) the total value of all personal consumption expenditures b) national income after taxes c) equivalent to unemployment d) the market value of the total output of goods and services produced in a given year

d) the market value of the total output of goods and services produced in a given year

Which of the following items would NOT be included in GNP? a) the production of 50,000 books in one year that were not sold by the following year, b) the dollar value of a lawyer's service, c) the sale of 450 new cars by a car dealer in Wichita, d) all of the above would be included in GNP.

d)all of the above would be included in GNP.

The demand for refrigerators falls when the economy enters a downturn. If a refrigerator manufacturer lays off workers during an economic downturn, this would be an example of: a) frictional unemployment b) natural unemployment c) structural unemployment d) cyclical unemployment

d)cyclical unemployment

Gross Domestic Product is the sum of the market value of the: a) intermediate goods b) manufactured goods c) normal goods and services d) inferior goods and services e) final goods and services

e) final goods and services

An example of a transfer payment is: a) wages b) profits c) rent d) government purchases e) unemployment benefits

e)unemployment benefits