Macro Assign 3

Which of the following is the largest contributor to the growth of labor productivity in the United States? A. technological advance B.education and training of labor C.economies of scale D.improved resource allocation

A. technological advance

Refer to the data below. United States exports are A.$24 billion B. $28 billion C.$16 billion D.$9 billion

A.$24 billion

Refer to the data below. GDP is: A.$350 billion B.$324 billion C.$315 billion D.$367 billion

A.$350 billion

Assume BLS determines that a typical consumer buys 30 apples and 60 hamburgers per month. The price of an apple was $1 and the price of a hamburger was $3 in 2010. The price of an apple rose to $2 in 2011, but the price of a hamburger remained the same in 2011. What is the CPI in 2011 if the base year is 2010? A.114.3 B.87.5 C.200 D.100

A.114.3

The economy has an annual inflation rate of 3.5%. It will take approximately how many years for the price level to double? A.20 years B.10 years C.15 years D.25years

A.20 years

Which of the following economic regions has experienced the least growth in real GDP per capita since 1820? A.Africa B.Asia excluding Japan C.Western Europe D.Latin America

A.Africa

In which industry or sector of the economy is output least likely to be affected by the business cycle? A.Agricultural commodities B.Automobile production C.Housing construction D.Capital goods production

A.Agricultural commodities

The GDP gap measures the difference: A.Between actual GDP and potential GDP B.Between actual GDP and real GDP C.Between actual GDP and national income D.None of the above

A.Between actual GDP and potential GDP

When oil and energy prices rise, the economy tends to experience: A.Cost-push inflation B.Demand-pull inflation C.Unanticipated inflation D.Natural inflation

A.Cost-push inflation

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

A.Cyclical

In calculating the unemployment rate, "discouraged" workers who are not actively seeking employment are: A.Excluded from the labor force B.Included as part of the unemployed C.Treated the same as part-time workers D.Used to determine the size of the labor force

A.Excluded from the labor force

A person's real income will increase by 4% if her nominal income: A.Increases by 6% while the price index rises by 2% B.Increases by 6% while the price index falls by 2% C.Increases by 2% while the price index rises by 6% D.Increases by 2% while the price index falls by 6%

A.Increases by 6% while the price index rises by 2%

To avoid multiple counting in national income accounts: A.Only final goods and services should be counted B.Intermediate goods and services should be counted C.Both final and intermediate goods and services should be counted D.Primary, intermediate, and final goods and services should be counted

A.Only final goods and services should be counted

A worker who loses a job at a call center because business firms switch the call center to another country is an example of: A.Structural unemployment B.Frictional unemployment C.Cyclical unemployment D.Disguised unemployment

A.Structural unemployment

The total volume of business sales in our economy is several times larger than GDP because: A.The GDP excludes intermediate transactions B.The GDP does not take taxes into account C.The GDP grossly understates the value of our annual output D.Total sales are in money terms and GDP is always stated in real terms

A.The GDP excludes intermediate transactions

The service a homeowner performs when she mows her yard is not included in GDP because: A.This is a nonmarket transaction B.This is a nonproduction activity C.This is a noninvestment transaction D.Multiple counting would be involved

A.This is a nonmarket transaction

Which of the following is not a component of GDP in the expenditures approach? A.Workers' wages and other compensation B.Gross private domestic investment C.The difference between exports and imports D.Government purchases

A.Workers' wages and other compensation

If the economy's real GDP doubles in 18 years, we can: A.conclude that its average annual growth rate is about 4 percent. B.conclude that its average annual rate of growth is about 2 percent. C.conclude that its average annual rate of growth is about 5.5 percent. D.not say anything about the average annual rate of growth.

A.conclude that its average annual growth rate is about 4 percent.

Economic growth is best defined as an increase in: A.either real GDP or real GDP per capita. B.nominal GDP. C.wealth in the economy. D.total consumption expenditures

A.either real GDP or real GDP per capita.

Empirical studies suggest that: A.technological advances account for about 40 percent of U.S. productivity growth. B.labor productivity has declined throughout U.S. history C.the achieving of economies of scale is the most important factor in U.S. economic growth. D.all U.S. economic growth from between 2001 and 2007 can be attributed to increases in the quantity of labor.

A.technological advances account for about 40 percent of U.S. productivity growth.

The full-time homemakers and retirees are classified in the BLS data as: A.Employed B.Not in the labor force C.Unemployed D.Part of the labor force

B.Not in the labor force

A trough in the business cycle occurs when: A.Cyclical unemployment is at a minimum point B.Employment and output reach their lowest levels C.The natural rate of unemployment is at a minimum point D.The inflation rate is at its lowest level

B.Employment and output reach their lowest levels

A trough in the business cycle occurs when: A.Cyclical unemployment is at a minimum point B.Employment and output reach their lowest levels C.The natural rate of unemployment is at a minimum point D.The inflation rate is at its lowest level

B.Employment and output reach their lowest levels

An example of final goods in the calculation of GDP would be: A.New lawn mowers purchased by Cut-rite Lawn Equipment & Supplies B.Flowers and pots purchased by household Lenny Davis C.Chemicals purchased by Green Grass Lawn Care Services D.Seedlings and saplings purchased for resale by Wendy Lee's Garden Center

B.Flowers and pots purchased by household Lenny Davis

The sale of a used automobile would not be included in GDP of the current year because it is a: A.Nonmarket transaction B.Nonproduction transaction C.Purely financial transaction D.Private transfer payment

B.Nonproduction transaction

Under what circumstances do rates of economic growth understate the growth of economic well-being? A.Economic growth has occurred because of increased length of the workweek. B.Product quality has improved C.Air quality has declined as real GDP has increased. D.Population has grown faster than real output

B.Product quality has improved

Suppose that Techno TV produces LCD televisions. At a price of $2,000 per television, Techno determines that its optimal output is 3000 television sets per week. If prices are sticky and fears of a recession reduce demand for LCD televisions, we would expect Techno to: A.reduce output in the long run. B.reduce output in the short run. C.raise prices in the short run to compensate for lost revenue. D.raise output in the short run.

B.reduce output in the short run.

Real GDP measures the A.total dollar value of all goods and services produced within the borders of a country using current prices. B.value of final goods and services produced within the borders of a country, corrected for price changes. C.total dollar value of all goods and services consumed within the borders of a country, adjusted for price changes. D.value of all goods and services produced in the world, using current prices.

B.value of final goods and services produced within the borders of a country, corrected for price changes.

Nominal GDP was $10,624 billion in year 1 and the GDP price index was 104. Nominal GDP was $11,246 in year 2 and the GDP deflator that year was 106. What was real GDP in years 1 and 2, respectively? A.$9,983 billion and $10,111 billion B.$10,022 billion and $10,813 billion C.$10,215 billion and $10,609 billion D.$10,624 billion and $11,246 billion

C.$10,215 billion and $10,609 billion

The following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320); imports ($35); exports ($22); personal consumption expenditures ($2,460); and, government purchases ($470). What is GDP in this economy? A.$3,250 billion B.$3,263 billion C.$3,237 billion D.$3,290 billion

C.$3,237 billion

GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,410 billion. Net exports are: A.+ $53 billion B.- $47 billion CorrectC.- $84 billion D.- $161 billion

C.- $84 billion

Refer to the list below. As distinct from the demand and efficiency factors of economic growth, the supply factors of economic growth are? 1. Improvements in technology 2. Increases in the supply (stock) of capital goods 3. Purchases of expanding output 4. Obtaining the optimal combination of goods, each at least-cost production 5. Increases in the quantity and quality of natural resources 6. Increases in the quantity and quality of human resources

C.1, 2, 5, and 6 only.

If the negative GDP gap were equal to 3% of the potential GDP, Okun's law suggests that the actual unemployment rate would exceed the natural rate of unemployment by: A.1% B.2% C.1.5% D.3%

C.1.5%

If the Consumer Price Index was 110 in one year and 118 in the next year, then the rate of inflation is approximately: A.5.5 percent B.5.9 percent C.7.3 percent D.6.2 percent

C.7.3 percent

Net exports is a positive number when: A. A nation's exports of goods and services are increasing B.A nation exports goods and services to other nations C.A nation's exports of goods and services exceed its imports D.A nation's exports of goods and services fall short of its imports

C.A nation's exports of goods and services exceed its imports

Which of the following does not correctly characterize modern economic growth? A.It spread slowly across the globe, with some societies not having experienced it yet B.It has occurred only in the last 200 or so years C.It has not affected the average lifespan of human beings D.It drastically alters the culture and politics of society

C.It has not affected the average lifespan of human beings

Which of the following is not included in personal consumption expenditures? A.New furniture and appliances bought by homeowners B.Payments for cable and Internet services to homes C.Purchases of mutual funds by consumers D.Food purchased at supermarkets

C.Purchases of mutual funds by consumers

A recession is a decline in: A.The inflation rate that lasts six months or longer B.The unemployment rate that lasts six months or longer C.Real GDP that lasts six months or longer D.Potential GDP that lasts six months or longer

C.Real GDP that lasts six months or longer

Assuming the total population is 100 million, the labor force is 80 million, and 72 million workers are employed, the unemployment rate is: A.8 percent B.4 percent C.6 percent D.10 percent

D.10 percent

Other things equal, which of the following would decrease the rate of economic growth, as measured by changes in real GDP? A.An increase in the educational attainment of the labor force B.A permanent decrease in frictional unemployment C.An increase in the amount of capital per worker D.A decrease in the larbor force participation rate

D.A decrease in the larbor force participation rate

Money spent on the purchase of a new house is included in the GDP as a part of: A.Household expenditures on durable goods B.Personal consumption expenditures C.Personal saving D.Gross domestic private investment

D.Gross domestic private investment

"Full employment" refers to the situation when there is: A.100% employment of the labor force B.0% unemployment rate C.No frictional or structural unemployment D.No cyclical unemployment

D.No cyclical unemployment

Unemployment describes the condition where: A.equipment and machinery are going unused. B.a person does not have a job, regardless of whether or not they want one. C.any resource sits idle. D.a person cannot get a job, but is willing to work and is actively seeking work.

D.a person cannot get a job, but is willing to work and is actively seeking work.