macro second exam

A headline states: "Real GDP falls again as the economy slumps." This condition is most likely to produce what type of unemployment? A. Structural B. Cyclical C. Frictional D. Natural

B

A nation has a population of 260 million people. Of these, 60 million are retired, in the military, in institutions, or under 16 years old. There are 188 million who are employed and 12 million who are unemployed. What is the unemployment rate? A. 4 percent B. 6 percent C. 9 percent

B

Adding the market value of all final and intermediate goods and services in an economy in a given year would result in: A) the calculation of GDP for that year. B) an amount greater than GDP for that year. C) an amount less than GDP for that year.

B

An example of a final good in national income accounts would be new: A) lawn mowers purchased by Cut-rite Mowers. B) flowers purchased by homeowner Violet Rose. C) chemicals purchased by Green Grass Lawn Care.

B

. In calculating the unemployment rate, "discouraged" workers who are not actively seeking employment are: A. Excluded (not counted) B. Included C. Treated the same as part-time workers

A

A large underground economy results in an: A. understated GDP. B. overstated GDP. C. understated GDP price index.

A

A nation's gross domestic product (GDP): A. is the dollar value of the total output of final goods and services produced within the borders of the nation. B. is the dollar value of the total output of final goods and services produced by its citizens, regardless of where they are living. C. can be found by summing C + In + S + Xn.

A

If a person's nominal income increases by 5% while the price level increases by 2%, the person's real income: A. Increases by 3% B. Increases by 5% C. Decreases by 7% D. Decreases by 2%

A

If the Consumer Price Index was 166.6 in one year and 172.2 in the next year, then the rate of inflation from one year to the next was about: A. 3.4% B. 4.1% C. 5.4% D. 6.0%

A

The descriptions give the responses of four individuals to a Bureau of Labor Statistics (BLS) survey of employment. 1. Mollie just graduated from college and is now looking for work. She has had three job interviews in the past month. 2. George works in an automotive assembly plant. He was laid off six months ago as the economy weakened. He expects to return to work in several months when national economic conditions improve. 3. Jeanette worked as an aircraft design engineer for a company that produces military aircraft until she lost her job last year when the Federal government cut defense spending. She has been looking for similar work for a year but no company seems interested in her aircraft design skills. 4. Ricardo lost his job last year when his company downsized and laid off middle-level managers. He tried to find another job for a year, but was unsuccessful and quit looking for work. Which individual is frictionally unemployed? A. Mollie B. George C. Jeannette D. Ricardo

A

Which of the following is a final good or service? A. a haircut B. fertilizer purchased by a farm supplier C. diesel fuel bought for a delivery truck D. Chevrolet windows purchased by a General Motors assembly plant

A

inflation is a rise in : A. The general level of prices over time B. The standard of living over time C. Industrial production D. Real GDP

A

Official unemployment rate statistics may: A. Overstate the amount of unemployment by counting part-time workers as unemployed B. Understate the amount of unemployment by counting part-time workers as employed C. Overstate the amount of unemployment because of the existence of "discouraged" workers who are not actively seeking employment

B

The largest component of GDP is: A) government purchases. B) personal consumption expenditures. C) gross private domestic investment.

B

Unanticipated inflation arbitrarily: A. "Subsidizes" those who receive fixed money incomes B. "Taxes" those who receive fixed money incomes C. "Penalizes" those who borrow money D. "Benefits" those who save money

B

Which would be considered an investment (and hence be included in the calculation of GDP) according to economists? A) The buying of shares of Janus mutual funds. B) The purchase of a new machine by Ford. C) The purchase of stock in MacDonald's.

B

. A headline reads: "Steel industry suffers slump as import competition increases; unemployment rises." This type of unemployment can best be characterized in economic terms as: A. Frictional B. Structural C. Cyclical D. Natural

C

A recession is normally defined as: A. A fall in the natural rate of unemployment B. A rise in the natural rate of unemployment C. A fall in real GDP that lasts six months (two quarters) or longer

C

Inflation caused by an increase in aggregate spending is referred to as: A. Cost-push inflation B. Demand-push inflation C. Demand-pull inflation D. Hyperinflation

C

When a group of workers finds that their job skills and work experience have become obsolete and are not needed by industry, this type of unemployment is: A. Search B. Frictional C. Structural D. Cyclical

C

Which statement is correct? A. During a recession spending on capital goods increases B. Generally, real output and employment show little variance over the business cycle C. The production of nondurable consumer goods is more stable than the production of durable consumer goods over the business cycle

C