Exam 1
Bananaland produces only bananas and sunscreen and the quantities and prices for 2015 and 2016 are given in the table. The base year is 2015. Nominal GDP in 2016 is equal to:
(125 x $4) + (75 x $4)= $800
Using the table above, the unemployment rate is
5.71
According to the income approach to measuring GDP, the largest income category is:
Wages
Which type of unemployment is the consequence of downturns in the business cycle?
cyclical
Household production, such as baking bread at home, is not included in GDP because it:
does not involve a market transaction
Rob is considered unemployed in the Current Population Survey if he
has looked for a job in the last four weeks but has not found a job.
Which of the following is NOT part of the business cycle?
inflation
The CPI is calculated by the Bureau of Labor Statistics on a frequency of every
month
The price survey of the goods contained in the CPI market basket is conducted
monthly
To compare the price of a loaf of bread produced in 1993 with the price of a loaf produced in this year, you should compare the value of the bread in
real prices
If average annual tuition at public 4-year colleges was $1,908 in 1990, when the CPI was 130.7, and $8,655 in 2012 when the CPI was 229.6, then the real cost of annual tuition
rose by 158 percent during that period.
Which type of unemployment is most likely to lead unemployed workers to retrain or relocate? Group of answer choices
structural
If the prices of the goods and services contained in the CPI market basket increase from the base period to the next year, we know that
the next year's CPI will be above 100.
The table gives data for a nation. The value of the country's net exports of goods and services shows that the country's:
value of its exports exceeded the value of its imports
Wobet is a country that produces only steak and potatoes. Steaks have a price of $10 each and potatoes have a price of $1 each. Suppose that Wobat produces 10 steaks and 20 potatoes in 2010. Using _____, Wobat has a GDP equal to _____.
-market value -$120
During a recession, the unemployment rate ________ and the percentage of part-time workers who are involuntary part-time workers ________.
-rises -rises
Which of the following is included in U.S. GDP? 1) the rental value of homes owned by U.S. citizens 2) the production of Surburban SUVs by GM in its plant in Mexico 3) tickets sold by U2 for concerts held in the U.S.
1 and 3
Consumers in Beachland consume only two goods, sodas and DVDs. If they spend $10 on sodas and $90 on DVDs a month, how many sodas and DVDs are in their CPI market basket if the price of a soda is $1 and the price of a DVD is $9?
10 sodas and 10 DVDs
If your nominal income is $80,000 and your real income in base year prices is $71,500, what is the CPI?
112
Unemployment benefits in western Europe are more generous than in the United States. As a result, ________ in the United States.
NOT avoidable unemployment is lower
The difference between nominal GDP and real GDP is:
NOT that nominal GDP includes the depreciation of capital and real GDP does not
Which of the following statements about the nominal and the real wage rates is correct?
The real wage rate indicates how many goods and services can be purchased with an hour's labor.
Cyclical unemployment includes people who become unemployed from
changes in the business cycle.
A weakness that could be noted about the unemployment rate is that it
does not account for the underutilization of workers.
The CPI is biased because it
does not always take into account the changes in product quality.
Which type of unemployment is a permanent and healthy phenomenon in a dynamic economy?
frictional
The average duration of unemployment
increases during recessions and decreases during expansions.
The bias in the CPI affects government outlays because the overstatement of inflation
increases government outlays by more than what is justified.
A recession runs from the:
peak of the business cycle to its trough
During the business cycle:
real GDP fluctuates around its trend