ECO 202 Exam 1
If real GDP per person in a country equals $40,000 and 50 percent of the population is employed, then the average labor productivity equals:
$80,000
If the natural rate of employment equals 5% and the actual rate of unemployment equals 6%, then cyclical unemployment equals
1%
The unemployment rate for younger workers is usually ______ the unemployment rate for older workers.
greater than
How would inflation rate from 2017-2019 compare to the rate from 2017-2018?
higher in 2019
Which of the following is thought to be the most important factor determining long-run economic growth?
improvements in technology
Countries with small amounts of capital per worker tend to have____ levels of real GDP per person and _____ levels of average labor productivity
low ; low
Gross Domestic Product (GDP) is the _________ in a given period of time.
market value of final goods and services produced
Full-time students and prisoners are
not in the labor force
The saving of government sector is called ____
public
A new 2010 Honda Civic produced in 2010 and purchased in 2011 is
part of GDP in 2010
Which of the following is NOT included in real GDP?
production that takes place in the underground economy
The excess of government spending over tax collection is:
the government budget deficit
Net exports is negative if
the value of imports exceeds the value of exports
Intermediate goods are excluded from GDP because
their inclusion would involve double counting
Full employment occurs when
there is no cyclical unemployment
Hyperinflation is defined as
very high inflation rates (15% or above)
The labor force is defined as people
who have a job or are looking for a job Labor force = unemployed + employed
An increase in the price level is defined as
Inflation
_____ saving equals _____saving ______ saving
National; private; plus public
Which of following situations best describes an individual who cyclically unemployed?
Nicholas was laid-off when orders for General Motors cars fell during the recession
How to find Nominal GDP for 2018?
Nominal = current quantities * current prices
How to find the GDP Deflator for 2018?
Nominal GDP 2018 / Real GDP 2018 *100
Of the following, which is correct?
Nominal GDP increases when the prices of goods and services increase
How to find Real GDP for 2018?
Real = current quantity * base year price
Suppose that over a period of years the country of Quasiland switch from being an agriculturally-based economy to a technologically-based economy. As a result, many people lost jobs because they lacked the correct skills. As they search for new jobs, these people are part of
Structural Unemployment
Frictional Unemployment is
Unemployment associated with the changing of jobs in a changing economy
Countries with high rates of economic growth tend to have
a labor force that is more productive
GAP, a U.S. corporation, produces apparel in India. This would ___
add to India's GDP but not to U.S. GDP
increases in living standards, as measured by real GDP per person, are primarily the result of increases in
average labor productivity
The largest component of planned aggregate expenditure is
consumption
The CPI basket contains 400 oranges and 800 pens. In the base year, the price of an orange was $1.00 and the price of a pen was $.75. This year, urban consumers each bought 300 oranges at $2.00 each and 850 pens at $1.00 each. The CPI this year is _____
160 base year CPI / current year CPI
In 2017, Bangladesh's nominal GDP was 250 billion and GDP deflator was 125. Find Bangladesh's real GDP
200 billion Nominal GDP / GDP Deflator *100 = Real GDP
Suppose the population of Tiny Town is 100 people and the labor force is made up of 75 people. If 5 of these people are unemployed, the unemployment rate is
5/75 * 100 Unemployment = unemployed / labor force
Let C represent consumption expenditure, S savings, I gross domestic investment, G government expenditure on goods and services. Then GDP equals
C + I + G + X -M X = exports, M = imports
How to find Inflation rate for 2018?
CPI 2 - CPI 1 / CPI 1 *100 or Nominal-real/real *100
Which of the following situations best describes an individual who is seasonally unemployed?
Catherine is a ski instructor who is not working because it is the summer.
Which type of unemployment increases during a recession?
Cyclical Unemployment
When the economy moves into and out of recessions and expansions, the unemployment rate fluctuates around the ______
Cyclical unemployment
The Consumer Price Index (CPI)
compares the cost in the current period to the cost in a reference base period of a basket of goods typically consumed in the base period
Real GDP can be criticized as a measure of economic welfare because it
does not include the value of products produced in the household does not take account of the degradation of environmental quality does not include leisure time available to society All of the above answers are correct
The Rule of 70 is used to
estimate how long it will take the level of any variable to double
