Macro midterm 2

Suppose that this year a small country has a GDP of $500 billion. Also assume that I = $100 billion, G = $150 billion, and Xn = $20 billion (net export). How big is C?

$230 billion

Given the information from the table above, the GDP is equal to _____

$56,000

In 2007 the price of an iPhone was $600. The CPI in 2007 is 207.3 and the CPI in 2019 is 255.7. What is the value of the iPhone in 2007 expressed in terms of 2019 prices?

$740.09

Below is the graph of a business cycle. Where does the following description fit among (A) ~ (D)? Economic growth slows down and businesses reduce hiring or even lay off workers.

(B)

North Freedland has an adult population of 100,000. Of these people, 72,000 are employed and 8,000 are unemployed. The unemployment rate is ___

10%

If the consumer price index changes from 125 in September to 150 in October, what is the monthly rate of inflation?

20.0%

Suppose in year 2000, the real GDP in country A and B are both one billion dollars. The annual growth rates of country A and B are 5% and 10%, respectively. At which year will the real GDP of B double that of A?

2014

The GDP for Country X in the first quarter was $21,098.8 billion. In the second quarter it was $21,340.3 billion. The annualized rate of growth is ___.

4.58%

Suppose that the nominal rate of interest is 9% and the rate of inflation is 5%. The real rate of interest is ___.

5%

From the following table, if you use CPI in year 1984 as the base year, what is number that is the closest to the CPI in 2022?

500

Suppose the table below represents the population for a hypothetical country. Assume that this data is collected in the month of March. What is the unemployment rate in this country for March?

8.3%

North Freedland has an adult population of 100,000. Of these people, 72,000 are employed and 8,000 are unemployed. The country's labor force is ___

80,000

How can an increase in economic growth be represented on a Production Possibilities Frontier (PPF)?

A shift outward of the frontier

Which of the following is not included in the natural unemployment rate?

Cyclical unemployment.

The real GDP growth rate an economy moves from Point A to Point B, which of the following transitions in the business cycle diagram is the LEAST likely to happen?

F to H

n macroeconomics, the business cycle refers to:

Fluctuations in the level of output

Jin has a Ph.D. degree in chemistry. He used to be a researcher at a government institution but quit his job to find a better job. During his job search, he is temporarily working at a convenience store. Which statement is correct about Jin?

He is underemployed.

Which of the following statements is NOT true regarding the circular flow diagram?

Household spending becomes revenue to business through the resource market.

Gross domestic product measures the value of ___

all final goods and services produced in a year

GDP can be measured using aggregate expenditures. We can calculate GDP in this way by including all the following except ___.

compensation of employees

A decrease in the average price of goods and services over time is ___.

deflation

Mary quit her job as a book-keeper so she could move closer to her family in Texas. She is currently looking for work there. Mary is ___.

frictionally unemployed

Two countries, Hanover and Oberfell, have different rates of economic growth. This difference is probably the result of ___.

he labor productivity in one country is greater than the labor productivity in the other

which of the following statements is TRUE?

the labor force is composed of those that are employed and those that are unemployed

Use the diagram below to answer the following question. Based on this diagram, long-run growth is represented by ___, and short-run expansion is represented by ___.

the straight line, the upward-sloping portion of the wavy line.

Which is NOT correct about human capital?

Investment in human capital has little effect on the long-term economic growth.

Which is NOT an example of the government's options to promote long-run economic growth?

Lowering the income tax.

The opportunity cost of holding money is captured by

The nominal interest rate

Suppose that a recession caused the number of discouraged workers to double in size. What would be the effect on the unemployment rate?

The unemployment rate will decrease.

When does your real income decline?

When nominal income is constant and the inflation rate is positive.