Macroeconomics Unit 3
The investment component of GDP includes:
Construction of a new steel mill and 500 additional copies of a new book not sold but added to Barnes and Noble's inventory.
GDP equals $17 trillion. If consumption equals $12 trillion, investment equals $3 trillion, and government spending equals $4 trillion, then:
Imports exceed exports by $2 trillion.
If the market value of final sales in 2014 was equal to $5,000, and inventory levels at the end of 2013 were equal to $100, and the inventory levels at the end of 2014 were equal to $120, GDP in 2014 was:
$5,020
Assume Nike purchases $10 worth of materials from Brown, Co. for each pair of shoes it produces. Nike then sells a pair of shoes for $100. The value added by Nike for each pair of shoes is:
$90
The information in the table above gives the 2008 reference year Consumer Price Index basket and prices used to construct the CPI for a small nation. It also has the 2009 prices for the items in the basket. What is the value of the CPI for the reference year period, 2008
100
Using the information in the table above, what is the value of the CPI for 2009?
140
Based on the data in Table B, what is the size of the labor force?
156,700,000
Suppose that last year the CPI was 148, this year it is 152. What was the inflation rate between those years?
2.7%
If the basket of goods and services used to calculate the CPI cost $150 in the reference year and $300 in a later year, the CPI for the latter year equals:
200
Assume that the labor force is 500 individuals with 25 unemployed. The unemployment rate is _______. Now, assume that 20 people drop out of the labor force and that 25 remain unemployed. The new unemployment rate is ______.
5.0%; 5.2%
If the nominal interest rate is 6% and the expected rate in inflation is 4%, then after a year a person expects to have:
6% more dollars, which will purchase 2% more goods.
Based on data in Table B, what is the employment-population ratio?
65.7%
Based on the data in Table B, what is the unemployment rate?
9.4%
Which of the following is NOT part of this year's U.S. GDP?
A Ford Mustang produced in Kansas City last year and sold to a Kansan this year.
When an individual is cyclically unemployed, the unemployment arises in part from:
A short-term elimination of jobs because of a slowdown in business activity.
Which of the following is an example of frictional unemployment?
A student is unemployed while looking for his first job.
Who in the following would be in favor of inflation:
A student with a student loan
Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If these individuals were counted as not in the labor force instead of unemployed:
Both the unemployment rate and the labor force participation rate would be lower.
A country that has a large Real GDP per capita might not necessarily have a high level of economic welfare because it may have:
Environmental problems, little leisure time, very high cancer rates.
Phil owns an old set of golf clubs that he purchased for $1000 seven years ago. He decides to post them to Craigslist and quickly sells them for $250. How does this sale affect this year's GDP?
GDP does not change at all as a result of this sale.
If individuals were paid for their household production, GDP would:
Increase
Which of the following is an example of an intermediate good?
Lettuce purchased by Applebee's Bar and Grill to make salads.
Suppose the CPI for the year 2014 is 239.4. What does that number mean?
Prices rose 139.4% over the reference (or base) year, on average.
If nominal GDP rises, we can say that:
Production has risen or prices have risen or both have risen.
How would you best describe a manufacturing employee who has been fired because he was replaced by a robot and does not have the skills necessary to help operate the robot?
Structurally unemployed
To calculate the U.S. Labor Force Participation Rate, which of the following are necessary pieces of information?
The Civilian Noninstitutionalized Population and the number of people in the labor force.
Inflation may turn out to be higher or lower than anticipated, thereby creating "winners" and "losers" in lending arrangements. Which of the following statements is true if actual inflation exceeds expected inflation?
The borrower "wins" and the lender "loses"
Given the information in the table above, what can we say has happened in the economy from 2004 to 2005?
The price level has risen.
Economists usually use the term "recession" to refer to:
Two or more consecutive quarters of declining GDP
A person is in the labor force if he is:
Working at a mine job.