AP MACRO UNIT 2 TEST
In 2007, the nominal gross domestic product (GDP) was $50 billion and the GDP deflator was 200. Thus real GDP was
$25 billion
In an economy, the price index in 2606 was 100 and the real gross domestic product (GDP) was $1,000. In 2010 , the price index was 110 and the nominal GDP was $2,200. Based on that information, which of the following can be inferred about the economy's nominal GDP in 2006 and real GDP in 2010
Nominal GDP in 2006=$1000, real GDP in 2010=$2000
In 2017 Sabrina earned an annual salary of $100,000 as an engineer. In 2018, her income rose to $105,000. The inflation rate in 2018 was 2%. How did Sabrina's nominal income and real income change in 2018 compared to 2017?
Nominal income increased and real income increased.
The consumer price index (CPI) is criticized for
overstating the true burden of inflation because it does not recognize consumers' ability to substitute goods and services as prices change
Which of the following describes a typical business cycle in the correct sequence?
peak, recession, trough, expansion
The unemployment rate measures the percentage of
people in the labor force who do not have jobs
Consumer Price Index (CPI) measures
prices of a specific group of goods and services purchased by consumers
The natural rate of unemployment is the unemployment rate when
there is no cyclical unemployment
According to the business cycle represented in the diagram above, the actual rate of unemployment equals the natural rate of unemployment when the economy is
On the potiental line
Which of the following transactions would represent an addition to a nation's current gross domeetic product?
The government increases its domestic purchases of food for use by the military.
In the circular flow diagram of a market economy, which of the following supplies the factors of production?
The household sector
Which of the following would cause the official unemployment rate to understate the problem of unemployment?
discouraged workers
The natural rate of unemployment can be defined as the
economy's long-run equilibrium rate of unemployment
The circular-flow model indicates that final goods are produced by
firms and sold in the product markets
The value of which of the following is counted in the United States gross domestic product?
A car produced in the United States and sold in Europe
Which of the following is an example of frictional unemployment?
A college graduate interviewing for two available positions
Which of the following groups of people would benefit from unanticipated inflation
II only (borrowers)
Which of the following grouns would most likely gain from unanticipated inflation?
Individuals who have borrowed money at fixed interest rates
Which of the following can be concluded about the consumer price index (CPI) for this individual from 1993 to 1994
It increased by 25%.
In the measurement of gross domestic product, investment includes spending on
businesses on capital goods and changes in inventory
Nominal gross domestic product is best defined as
the market value of final goods and services produced in a nation in a given year
the nominal gross domestic product (GDP) of the nation of Hypothetica increased in 2007 relative to the previous year, it must be true that in Hypothetica in 2007
the price level and/or the real GDP has increased
