Macroeconomics Exam 2 Multiple Choice

Of Arizona, Colorado, Kansas, and North Carolina, the state with the highest per capita personal income in 2010 was:

Colorado

The phase of the business cycle when real GDP is increasing is called:

Expansion

Comparisons of GDP between developed countries and less developed countries will tend to overstate the difference in standard of living because:

GDP does not include nonmarket production

Of Georgia, Oklahoma, South Dakota, and Virginia, the state with the lowest per capita personal income in 2010 was:

Georgia

when total output is measured as the sum of all payments to resource owners, the result is:

National Income

during the great depression, the U.S. economy: a. failed to achieve any of the 3 macroeconomic goals b. suffered from unemployment rates which averaged almost 10% for the 1930s c. suffered from high inflation from 1929 to 1933 d. all of the above

a. failed to achieve any of the 3 macroeconomic goals

which of the following statements is false? a. investment does not include new residential housing b. consumption is the largest component of GDP c. Government purchases does not include transfer payments d. net exports = exports minus imports

a. investment does not include new residential housing

Which of the following is not one of the macroeconomic goals? a. full employment b. money supply growth c. economic growth d. price level stability

b. money supply growth

For GDP purposes, which of the following would be investment spending? a. warren buys 100 shares of common stock for $6,000 b. Charlie buys a used lawn mower for his lawn service business c. Lynda buys a new display case for her jewelry store d. all of the above

c. Lynda buys a new display case for her jewelry store

Technological Advance: a. is the ability to produce more output per resource b. destroys jobs c. both of the above d. neither of the above

c. both of the above

Compared to France, the U.S. had: a. a higher minimum wage b. higher payroll taxes c. lower rates of unemployment d. all of the above

c. lower rates of unemployment

Cheryl is laid off from her job as an accountant due to a recession. she searches for a job for 6 months and then is rehired by her old employer when the economy begins to recover. While Cheryl was looking for work, she was:

cyclically unemployed

Nominal GDP may increase: a. if there is an increase in the price level b. if there is an increase in production c. even if real GDP decreased d. all of the above

d. all of the above

the natural unemployment rate is: a. the sum of frictional and structural unemployment b. the lowest unemployment rate that can be sustained without causing increasing inflation c. the rate associated with full employment d. all of the above

d. all of the above

Job destruction caused by technological advance: a. is an economic disaster that must be prevented by job preservation legislation b. allows the newly unemployed labor to be re-allocated to more valuable production c. makes economic growth possible d. both b and c

d. both b and c

When the economy is at full employment: a. the unemployment rate will be zero b. there will still be some unemployment c. the unemployment rate will be at the natural unemployment rate d. both b and c

d. both b and c.

from 1983 through 2007: a. the inflation rate was generally higher than it was in the 1970s b. the economy suffered from frequent recessions c. both of the above d. neither of the above

d. neither of the above

Which of the following would directly affect GDP? a. Aunt lucille receives her social security check b. aunt lucille spends all day saturday cleaning her house c. aunt lucilles house is destroyed by a tornado d. none of the above

d. none of the above

Which of the following would directly affect GDP? a. a refinery buys crude oil b. a refinery takes out a large loan from a bank c. a refinery emits pollution into the air d. none of the above

d. none of the above

On a simple circular flow diagram:

firms pay for resources by making resource payments.

Cheryl graduates with an accounting degree in May. After searching for 2 months, she lands a job as an accountant in July. While Cheryl was looking for work, she was:

frictionally unemployed

the largest category in the market basket of goods and services purchased by typical households is:

housing

the female labor force participation rate increased between 1948 and 2010 as real wage rates:

increased

the gap between men's earnings and women earnings:

is likely to narrow in the future due to the higher college enrollment for women compared to men

A period of unemployment typically lasts:

less than 6 months

if the quantity of money spent decreases relative to the quantity of products purchased:

the price level will decrease

anyone 16 and older who does not have a paying job and is actively seeking employment is:

unemployed

the law creating the first employment contract in france:

was intended to reduce the unemployment rate for young workers

in which of the following years was the unemployment rate the lowest?

1967

in which of the following years was the inflation rate highest?

1980

in which of the following years was the real GDP growth rate the highest?

1984

The CPI in 1954 was:

26.9

if the CPI was 113.6 in 1987 and was 118.3 in 1988, what was the rate of inflation for 1988?

4.1%