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Suppose a simple economy produces only four goods and services: jackets, oil changes, chocolate chips, and chocolate chip cookies. Assume half of the chocolate chips are used in the production of the cookies. Calculate GDP using the expenditure method. a 10,290 units. b $5,000. c $4,000. d $4,500.

4500

Consider the information in the table for Tyrovia, a country that produces only two products: guns and butter. Quantity of Guns Price of Guns Quantity of Butter Price of Butter2012 80 $5 40 $42020 90 6 60 10Nominal GDP for Tyrovia for 2020 equals a) $1,140.b) $880.c) $690.d) $560.

A

In the equation that sums up the information on the components of GDP, Y = C + I + G + NX, which component is the largest? a)C b)I c)G d) NX

A

Increases in real GDP would overstate the well-being of a country over time if, over that time period, the a) average hours worked per week increased.b) crime rate decreased.c) price level increased.d) amount of pollution decreased.

A

Suppose Mary is currently unemployed. Each​ day, Mary spends the entire day searching available job openings for an appropriate position given her set of​ skills, abilities, and interests. If someone asks Mary what she does for​ work, she tells them that she is currently​ "in-between jobs." Which of the following best classifies Mary's unemployment​ status? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Frictionally unemployed b Structurally unemployed c Seasonally unemployed d Cyclically unemployed

A

That stated interest rate on a loan is a) the nominal interest rate.b) the real interest rate.c) the rate of inflation.d) neither the nominal nor the real rate of interest envisioned by economists.

A

Using the year 2000 as the base year, and assuming that prices during the 1990s were lower on average than prices in 2000, we can conclude thata) nominal GDP was lower than real GDP in the 1990s.b) nominal GDP was higher than real GDP in the 1990s.c) nominal GDP was equal to real GDP during all these years.d) neither nominal GDP nor real GDP were good measures of GDP.

A

Which of the following is included in the economist's definition of investment?a) The purchase of a machine, factory, or house.b) The purchase of a share of stock.c) The purchase of a rare coin or deposit in a savings account.d) All of these.

A

Which of the following statements is true?a) Minimum wage laws cause an increase in unemployment.b) Labor unions bargain for wages that are often below the market wage.c) Efficiency wages reduce the amount of unemployment.d) All of the above.

A

Growth in the economy is almost always measured asa) growth in nominal GDP.b) growth in real GDP.c) growth in measured GDP.d) the growth of personal disposable income.

B

How is GDP measured?a) GDP is measured by adding the quantities of goods and services produced in a given year.b) GDP is measured using market values.c) GDP is measured using stock market values, or stock prices.d) GDP is measured by adding the prices of goods and services throughout the economy.

B

Suppose that you are available to go to work but have not looked for a job for at least the last four weeks because you believe that there​ aren't any jobs available. You would be counted as Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a underemployed. b a discouraged worker. c part of the labor force. d unemployed.

B

Suppose your mother's salary was $29,500 in 1992, when the CPI was 100. She earned $65,000 in 2011, when the CPI was 226. Which of the following statements is true?a) Your mother's purchasing power increased.b) Your mother's real wage decreased.c) Your mother's real wage and purchasing power remained the same. d) Your mother's nominal wage decreased.

B

When the skills of the unemployed don't match the skills required for a job, we havea) frictional unemployment.b) structural unemployment.c) cyclical unemployment.d) seasonal unemployment.

B

How is GDP calculated?a) By adding the prices of the goods and services in question.b) By adding the quantities of goods and services in question.c) By multiplying the price times the quantity of each good and service sold in the current period, then adding the results.d) By dividing the quantities of goods and services by the prices paid.

C

If the CPI was 207 in 2009 and 225 in​ 2013, what wage would someone who earned a​ $50,000 income in 2009 have to earn in 2013 in order to keep their purchasing power​ constant? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a $54,000 b $51,252 c $54,348 d None of the above.

C

Real GDP refers to nominal GDP a) minus gifts to other countries. b) minus total unemployment compensation. c) adjusted for price changes. d) adjusted for unemployment changes.

C

Suppose that the inflation rate turns out to be much higher than most people expected. In that​ case, Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a a borrower will lose from the situation while a lender will gain. b both borrower and lender will lose in this situation. c a lender will lose from the situation while a borrower will gain. d both borrower and lender will gain from the situation.

C

The only way that the standard of living of the average person in a country can increase is by Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a increasing population growth so output can increase. b ensuring that the country's economic growth is faster than economic growth in other countries. c increasing production faster than population growth. d producing the amount of output necessary for subsistence.

C

Which market basket specifically targets intermediate goods?a) the basket used by the Consumer Price Indexb) the basket used by the GDP deflatorc) the basket used by the Producer Price Indexd) All of the above.

C

Which of the following is the best categorization of a discouraged worker?a) Unemployed but not in the labor force.b) Unemployed but not looking for work.c) Not looking for work and not in the labor force.d) Looking for work but not in the labor force.

C

Which of the following would not be counted as part of this year's GDP? a) the increase in the value of an antique automobile that was restored this year b) the value of a new automobile at its sale price c) the value of a used car at its sale price d) a family's replacement of a worn-out washing machine with a new one

C

The "normal" underlying level of unemployment in the economy isa) the sum of structural unemployment and frictional unemployment.b) the full-employment rate of unemployment.c) the natural rate of unemployment.d) All of the above.

D

The inflation rate is a) the percentage change in nominal GDP from one year to the next.b) the percentage change in real GDP from one year to the next.c) the percentage difference between nominal GDP and real GDP in any given year.d) the percentage change in the GDP deflator from one year to the next.

D

The real interest rate equals Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the nominal interest rate plus the inflation rate. b the inflation rate minus the nominal interest rate. c the nominal interest rate divided by the CPI for a given year. d the nominal interest rate minus the inflation rate.

D

The unemployment rate in the United States is _____ and the requirements for receiving unemployment _____ than in Western Europe.a) higher; less stringentb) higher; more stringentc) lower; less stringentd) lower; more stringent

D

What is the labor force participation rate of the economy? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 15 percent b 20 percent c 60 percent d 75 percent

D

Which of the following are the two key factors that determine labor productivity? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a economic growth and real GDP per capita b the amount of land and capital available in a country c government policies that promote household consumption d the quantity of capital per hour worked and the level of technology

D

Which of the following statements is correct?a) Even when inflation is perfectly anticipated, some individuals will experience a cost.b) People on fixed incomes are particularly hurt by inflation.c) Anyone holding paper money will find its purchasing power decreasing each year by the rate of inflation.d) All of the above.

D

Gross domestic product is best defined as Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the market value of all final goods and services produced in a country during a period of​ time, typically one year. b the total quantity of goods and services produced in a country during a period of time. c the amount of all incomes earned by all citizens of a​ country, including those living overseas. d the total value of all goods that can be found in a country.

a the market value of all final goods and services produced in a country during a period of​ time, typically one year.

Consider the information in the table for Altana, a country that produces only two products: oranges and shirts. Real GDP for Altana for 2009 using 2012 as the base year equals Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a $5,850. b $5,650. c $5,100. d $4,620.

b $5,650.

If the CPI in 2002 was 180 and the CPI in 2003 was 184, what was the inflation rate between 2002 and 2003? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 4% b 2.22% c 2.17% d 97.8%

b 2.22%

If prices rise over​ time, then real GDP will be Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a larger than nominal GDP in years after the base year. b larger than nominal GDP in years before the base year. c smaller than nominal GDP in years before the base year. d smaller than nominal GDP in the base year.

b larger than nominal GDP in years before the base year.

Suppose, in 2022, you purchase a house built in 2000. Which of the following would be included in the gross domestic product for 2022? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the value of the house in 2022 minus depreciation b the value of the house in 2022 c the value of the services of the real estate agent d the value of the house in 2000

c the value of the services of the real estate agent

Which of the following goods and services would be excluded from personal consumption expenditures in the Bureau of Economic Analysis (BEA) statistics? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a medical care b education c a hair cut d a new house

d a new house

Real GDP is Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a a measure of output that was replaced by nominal GDP some time ago. b equal to the value of nominal GDP in every year except for the base year. c the value of goods and services evaluated at current year prices. d the value of goods and services evaluated at base year prices.

d the value of goods and services evaluated at base year prices.

What is the informal​ sector, or underground​ economy? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The informal sector, or underground economy, is when production occurs in other countries. b This is the part of the economy characterized by the pollution and other negative externalities its production creates. c This is the part of the economy where production is heavily taxed by the government. d The informal sector is the sector of the economy where production is concealed from the government.

d The informal sector is the sector of the economy where production is concealed from the government.