Macroeconomics ch 6&7

When an economics professor quits​ his/her job at a university and starts looking for a better job in another​ university, he/she is A. cyclically unemployed. B. structurally unemployed. C. frictionally unemployed. D. naturally unemployed.

C. frictionally unemployed.

Gross domestic product measures A. the value of all output in the economy. B. the total income of everyone in the economy. C. the total spending of everyone in the economy. D. all of the above

D. all of the above

The GDP of the U.S. in 2014 was around​ $17.4 trillion. This means A. that total income in the U.S. in 2014 was around​ $17.4 trillion. B. that total spending on final goods and services in the U.S. in 2014 was around​ $17.4 trillion. C. that the value of output in the U.S. in 2014 was around​ $17.4 trillion. D. all of the above

D. all of the above

By not counting the value of intermediate goods when calculating​ GDP, you avoid A. deficit spending. B. black−market accounting. C. year−to−date calculations. D. double counting.

D. double counting.

Refer to the information provided in Table 7.3 below to answer the questions that follow. Table 7.3 Price per Unit in Units Purchased 2013 2014 2015 2016 Blueberries 8 ​$2.00 ​$2.00 ​$2.10 ​$2.40 Pineapples 5 ​$2.00 ​$2.50 ​$2.50 ​$3.00 Cheese 3 ​$2.50 ​$3.00 ​$3.50 ​$4.00 Refer to Table 7.3. If 2014 is the base​ year, the inflation rate between 2014 and 2015 is A. 3.9%. B. 6.1%. C. 7.4%. D. 10.2%.

B. 6.1%.

Assume that this economy produces only two goods Good X and Good Y. The value for this​ economy's nominal GDP in year 1 is A. $110. B. $130. C. $140. D. $160.

A. $110.

Refer to the information provided in Table 7.4 below to answer the questions that follow. Table 7.4 Price per Unit in Units Purchased 2014 2015 2016 Good A 5 ​$1.00 ​$1.50 ​$1.50 Good B 10 ​$2.00 ​$2.50 ​$3.00 Good C 4 ​$4.00 ​$4.50 ​$5.00 Refer to Table 7.4. The bundle price for the goods in period 2014 is A. $41.00. B. ​$50.50. C. $57.50. D. $100.00.

A. $41.00.

The unemployment rate is A. ​(labor force minus− ​employed)/labor force times× 100. B. ​(employed minus− ​unemployed)/labor force times× 100. C. (employed minus− labor​ force)/employed times× 100. D. unemployed/population times× 100.

A. (labor force minus− ​employed)/labor force times× 100.

Production Prices Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Good X 60 80 100 ​$1.00 ​$1.00 ​$1.40 Good Y 100 110 130 ​$0.80 ​$0.90 ​$1.00 Assume that this economy produces only two​ goods: Good X and Good Y. If year 1 is the base​ year, the value for this​ economy's GDP deflator in year 1 is A. 100. B. 1. C. 111. D. 110.

A. 100.

Production Prices Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Good X 60 80 100 ​$1.00 ​$1.00 ​$1.40 Good Y 100 110 130 ​$0.80 ​$0.90 ​$1.00 Assume that this economy produces only two​ goods: Good X and Good Y. If year 1 is the base​ year, the value for this​ economy's inflation rate between year 1 and year 2 is A. 6.5%. B. −​6.1%. C. 79%. D. −​5.5%.

A. 6.5%.

The equation for GDP using the expenditure approach is A. GDP​ = C​ + I​ + G​ + EX − IM. B. GDP​ = C​ + I​ + G​ + EX​ + IM. C. GDP​ = C​ + I​ + G − EX − IM. D. GDP​ = C​ + I​ + G​ + ​(IM − EX​).

A. GDP​ = C​ + I​ + G​ + EX − IM.

The value of what Burger King produces in France is included in the United States​ ________ and in the French​ ________. A. GNP; GDP B. GNP; GNP C. GDP; GNP D. GDP; GDP

A. GNP; GDP

The value of what KFC produces in Japan is included in the U.S.​ ________ and in the Japanese​ ________. A. GNP; GDP B. GDP; GNP C. GDP; GDP D. GNP; GNP

A. GNP; GDP

Which of the following is not counted in the GNP of the United​ States? A. The profit earned by a restaurant located in the United States but owned by a Mexican company. B. The wage of a U.S. citizen who works in a foreign country for a foreign firm. C. The value of services that are produced by state and local governments in the United States. D. The interest earned by a U.S. bank on loans to a business firm located in Brazil.

A. The profit earned by a restaurant located in the United States but owned by a Mexican company.

Which of the following is a good or service counted in​ GDP? A. a new tire you buy for your personal car B. tires Ford buys to put on a car C. used tires bought by a used car dealer to put on a car on his lot D. a used tire you buy for your personal car

A. a new tire you buy for your personal car

Jake retired from the police force. He started working an hour or two a day at a paid job in​ city's courthouse. Jake is A. employed. B. unemployed. C. not in the labor force. D. in the labor force.

A. employed

Discouraged workers are A. not considered as part of the labor force. B. considered frictionally unemployed. C. considered cyclically unemployed. D. considered structurally unemployed.

A. not considered as part of the labor force.

If the​ labor-force participation rate is​ 82% and the total population 16 years of age or older is 1 million​ people, the labor force is A. 820,000 people. B. 910,000 people. C. ​740,000 people. D. ​180,000 people.

A. ​820,000 people.

Refer to the information provided in Table 7.4 below to answer the questions that follow. Table 7.4 Price per Unit in Units Purchased 2014 2015 2016 Good A 5 ​$1.00 ​$1.50 ​$1.50 Good B 10 ​$2.00 ​$2.50 ​$3.00 Good C 4 ​$4.00 ​$4.50 ​$5.00 Refer to Table 7.4. If 2014 is the base​ period, the price index in 2014 is A. 1000. B. 100. C. 10. D. 1.

B. 100.

Production Prices Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Good X 60 80 100 ​$1.00 ​$1.00 ​$1.40 Good Y 100 110 130 ​$0.80 ​$0.90 ​$1.00 Assume that this economy produces only two​ goods: Good X and Good Y. If year 1 is the base​ year, the value for this​ economy's GDP deflator in year 2 is A. 179. B. 106.5. C. 100. D. 93.9.

B. 106.5.

Refer to the information provided in the table at right to answer the question that follows. Durable goods=800 Nonresidential investment=400 Federal purchases of goods=300 Exports=400 State and local purchases of goods=200 Residential investment=50 Services=500 Imports=250 Change in business inventories=−25 Nondurable goods=700 The value for net exports in billions of dollars is A. 800. B. 150. C. 250. D. 650.

B. 150.

Refer to the information provided in the table below to answer the question that follows. Employed=14,000 people Unemployed=3,000 people Not in the Labor Force=4,000 people The labor force equals: A. 14,000 people. B. 17,000 people. C. 21,000 people. D. 18,000 people.

B. 17,000 people.

Refer to the information provided in the table at right to answer the question that follows. Durable goods=800 Nonresidential investment=400 Federal purchases of goods=300 Exports=400 State and local purchases of goods=200 Residential investment=50 Services=500 Imports=250 Change in business inventories=−25 Nondurable goods=700 The value for gross private domestic investment in billions of dollars is A. 450. B. 425. C. 300. D. 375.

B. 425.

Refer to the information provided in the table at right to answer the question that follows. Durable goods=800 Nonresidential investment=400 Federal purchases of goods=300 Exports=400 State and local purchases of goods=200 Residential investment=50 Services=500 Imports=250 Change in business inventories=−25 Nondurable goods=700 The value of government spending in billions of dollars is A. 200. B. 500. C. 300. D. 100.

B. 500.

Refer to the information provided in the table below to answer the question that follows. Employed=14,000 people Unemployed=3,000 people Not in the Labor Force=4,000 people The​ labor-force participation rate is A. 75.0%. B. 80.9%. C. 77.8%. D. 66.7%.

B. 80.9%

Which of the following is an example of a final good or​ service? A. wheat a bakery purchases to make bread B. a computer purchased by Federal Express to track shipments C. coffee beans Starbucks purchases to make coffee D. lumber purchased by a construction company to used in building houses

B. a computer purchased by Federal Express to track shipments

Gross national product is the total market value of A. all final goods and services produced in a country in a given​ year, regardless of who owns the resources. B. all final goods and services produced by resources owned by a​ country, regardless of where production takes place. C. all final and intermediate goods and service produced by resources owned by a country in a given year. D. all final and intermediate goods and services produced in a​ country, regardless of who owns the resources.

B. all final goods and services produced by resources owned by a​ country, regardless of where production takes place.

A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as A.structurally unemployed. B. frictionally unemployed. C. not in the labor force because his employer had a legitimate reason for firing him. D. cyclically unemployed.

B. frictionally unemployed.

The PPI is a price index that tends to be a leading indicator of A. past economic performance. B. future inflation rates. C. unemployment trends. D. nominal GDP.

B. future inflation rates.

The total market value of all final goods and services produced within a given period by factors of production located within a country is A. net national income. B. gross domestic product. C. gross national product. D. net national product.

B. gross domestic product.

Real GDP is gross domestic product measured A. in current dollars. B. in the prices of a base year. C. at a constant output level but at current prices. D. as the difference between the current​ year's GDP and last​ year's GDP.

B. in the prices of a base year.

An auto worker in Ohio who loses her job because the company relocated the plant to another country represents an example of A. natural unemployment. B. structural unemployment. C. frictional unemployment. D. cyclical unemployment.

B. structural unemployment.

An individual who cannot find a job because his or her job skills have become obsolete is an example of A. seasonal unemployment. B. structural unemployment. C. frictional unemployment. D. cyclical unemployment.

B. structural unemployment.

Telephone operators who have lost their jobs as a result of computerized switchboards are an example of A. cyclical unemployment. B. structural unemployment. C. frictional unemployment. D. voluntary unemployment.

B. structural unemployment.

Inflation is an increase in A. the price of one item. B. the overall price level. C. the average income level. D. real gross national product.

B. the overall price level.

Cyclical unemployment is the A. portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries. B. unemployment that occurs during recessions and depressions. C. unemployment that results when people become discouraged about their chances of finding a job so they stop looking for work. D. portion of unemployment that is due to the normal working of the labor market.

B. unemployment that occurs during recessions and depressions.

Refer to the information provided in the table below to answer the question that follows. Employed=14,000 people Unemployed=3,000 people Not in the Labor Force=4,000 people The employment rate is: A. 75.0%. B. ​82.4%. C. 83.3%. D. 85.7%.

B. ​82.4%.

Assume that this economy produces only two goods Good X and Good Y. The value for this​ economy's nominal GDP in year 2 is A. $120. B. $122. C. $132. D. $140.

C. $132.

Production Prices Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Good X 60 80 100 ​$1.00 ​$1.00 ​$1.40 Good Y 100 110 130 ​$0.80 ​$0.90 ​$1.00 Assume that this economy produces only two​ goods: Good X and Good Y. The value for this​ economy's nominal GDP in year 3 is A. $250. B. $222. C. $270. D. $204.

C. $270.

Refer to the information provided in the table at right to answer the question that follows. Federal purchases of goods=800 Services=500 Imports=200 Change in business inventories=40 Durable goods=300 Nondurable goods=600 Exports=50 Residential investment=200 State and local purchases=200 Nonresidential investment=650 The value of government spending in billions of dollars is A. 600. B. 200. C. 1,000. D. 800.

C. 1,000.

If nominal GDP is​ $8 trillion and real GDP is​ $6 trillion, the GDP deflator is A. 48. B. 75. C. 133.33. D. 480.

C. 133.33.

If the price index in period 2 is 109 and the price index in period 3 is​ 125, the rate of inflation between period 2 and period 3 is A. ​16%. B. 8.7%. C. 14.7%. D. 9%.

C. 14.7%.

Refer to the information provided in the table below to answer the question that follows. Employed=14,000 people Unemployed=3,000 people Not in the Labor Force=4,000 people The unemployment rate is: A. 14.3%. B. 16.7%. C. ​17.6%. D. 25.0%.

C. 17.6%

Refer to the information provided in the table at right to answer the question that follows. Durable goods=800 Nonresidential investment=400 Federal purchases of goods=300 Exports=400 State and local purchases of goods=200 Residential investment=50 Services=500 Imports=250 Change in business inventories=−25 Nondurable goods=700 Personal consumption expenditures in billions of dollars are A. ​1,500. B. 1,300. C. 2,000. D. ​1,000.

C. 2,000.

Durable goods=600 Nonresidential investment=400 Federal purchases of goods=350 Exports=300 State and local purchases of goods=100 Residential investment=150 Services=900 Imports=100 Change in business inventories=−40 Nondurable goods=800 The value for net exports in billions of dollars is A.−200. B. 100. C. 200. D. 400.

C. 200.

Durable goods=600 Nonresidential investment=400 Federal purchases of goods=350 Exports=300 State and local purchases of goods=100 Residential investment=150 Services=900 Imports=100 Change in business inventories=−40 Nondurable goods=800 The value of gross domestic product in billions of dollars is A. 3,190. B. 3,430. C. 3,460. D. 3,650.

C. 3,460.

Estimates for the natural rate of unemployment in the United States range from A. 3% to​ 8%. B. 2% to​ 10%. C. 4% to​ 6%. D. 1% to​ 5%.

C. 4% to​ 6%.

A price index is A. a measurement showing the cost of a bundle of goods at a point in time. B. a decrease in the overall price level. C. a measurement showing how the average price of a bundle of goods changes over time. D. a sustained increase in the overall price level.

C. a measurement showing how the average price of a bundle of goods changes over time.

When calculating​ GDP, exports are​ ________ and imports are​ ________. A. added; added B. subtracted; added C. added; subtracted D. subtracted; subtracted

C. added; subtracted

Which prices are used to measure goods and services in calculating​ GDP? A. projected prices B. past year prices C. current prices D. average prices

C. current prices

When the Fed slows the rate of growth of the money supply to slow down the​ economy, the unemployment type that will be directly affected is the A. natural rate of unemployment. B. structural unemployment. C. cyclical unemployment. D. frictional unemployment.

C. cyclical unemployment.

The total market value of all final goods and services produced by resources owned by a​ country, regardless of where production takes place is A. gross domestic product. B. gross private domestic investment. C. gross national product. D. national income.

C. gross national product.

A price index that tends to be a leading indicator of future inflation rates is the A. GDP price index. B. consumer price index. C. producer price index. D. retail price index.

C. producer price index.

Which of the following is not a component of gross domestic​ product? A. net exports B. government purchases C. purchases by consumers of used goods D. purchases by consumers of finished goods

C. purchases by consumers of used goods

The data in the national income and product accounts are compiled by A. the Bureau of Labor Statistics. B. the Federal Reserve. C. the Bureau of Economic Analysis. D. the House Ways and Means Committee.

C. the Bureau of Economic Analysis.

If an economy produced 10 pizzas at​ $20 each and fifteen gallons of root beer at​ $5 each, the total value of these goods and services would be A. $75. B. $200. C. ​$275. D. $2,750.

C. ​$275.

If the labor force is​ 320,000 and the total population 16 years of age or older is​ 400,000, the​ labor-force participation rate is A. 76%. B. ​72%. C. 88%. D. 80%.

D. 80%.

For Joanna to be considered out of the labor​ force, she can be A. working only 10 hours per week. B. self−employed. C. temporarily laid off. D. a full−time student.

D. a full−time student.

GDP is not a perfect measure of social welfare and the​ society's economic​ well-being because A. GDP accounting rules do not adjust for production that causes negative externalities. B. it does not include all economic activities in the economy. C. it does not say anything about the distribution of income. D. all of the above

D. all of the above

Cheryl graduated from college a month ago and is now without work. She accepted a job that will start next month. ​Today, Cheryl is A. not in the labor force. B. employed. C. a discouraged worker. D. in the labor force.

D. in the labor force

Real GDP is gross domestic product measured A. at a constant output level but at current prices. B. as the difference between the current​ year's GDP and last​ year's GDP. C. in current dollars. D. in the prices of a base year.

D. in the prices of a base year.

The total income of the country is A. net national product. B. personal income. C. production income. D. national income.

D. national income.

Annabel retired from the fire department. She started volunteering two hours a day at an unpaid job in the local hospital. Annabel is A. employed. B. a discouraged worker. C. unemployed. D. not in the labor force.

D. not in the labor force.

The GDP deflator is the A. difference between real GDP and nominal GDP multiplied by 100. B. difference between nominal GDP and real GDP multiplied by 100. C. ratio of real GDP to nominal GDP multiplied by 100. D. ratio of nominal GDP to real GDP multiplied by 100.

D. ratio of nominal GDP to real GDP multiplied by 100.

The natural rate of unemployment is generally thought of as the A. ratio of the frictional unemployment rate to the cyclical unemployment rate. B. sum of structural unemployment and cyclical unemployment. C. sum of frictional unemployment and cyclical unemployment. D. sum of frictional unemployment and structural unemployment.

D. sum of frictional unemployment and structural unemployment.

Which of the following would not be counted in​ 2016's GDP? A. the 2016 salary of a used motorcycle salesperson B. the commissions earned by a real estate agent in selling condominiums built prior to 2016 C. the value of a refrigerator manufactured in 2016 but not sold in 2016 D. the value of a 2008 boat you purchase from a boat dealer in 2016

D. the value of a 2008 boat you purchase from a boat dealer in 2016

Refer to the information provided in Table 7.3 below to answer the questions that follow. Table 7.3 Price per Unit in Units Purchased 2013 2014 2015 2016 Blueberries 8 ​$2.00 ​$2.00 ​$2.10 ​$2.40 Pineapples 5 ​$2.00 ​$2.50 ​$2.50 ​$3.00 Cheese 3 ​$2.50 ​$3.00 ​$3.50 ​$4.00 Refer to Table 7.3. Suppose 2014 is the base year. The price index in 2014 is: A. ​1,000. B. 100. C. 10. D. 1.

B. 100.

Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base​ year, the value for this​ economy's real GDP in year 2 is A. $120. B. $122. C. $132. D. $140.

B. $122.

If the CPI in 2015 was 104 and the CPI in 2016 was​ 106, then the rate of inflation between 2015 and 2016 was A. 1.89%. B. 1.92%. C. 2.0%. D. 2.2%.

B. 1.92%.

​If, in​ 2016, an​ economy's total production was 50 bushels of soybeans at​ $20 each and 40 gallons of honey at​ $15 per​ gallon, its gross domestic product would be A. ​$400. B. ​$600. C. $1,000. D. $1,600.

D. $1,600.

Production Prices Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Good X 60 80 100 ​$1.00 ​$1.00 ​$1.40 Good Y 100 110 130 ​$0.80 ​$0.90 ​$1.00 Assume that this economy produces only two​ goods: Good X and Good Y. The value for this​ economy's nominal GDP in year 1 is A. $180. B. $200. C. $160. D. $140.

D. $140.

Federal purchases of goods=1,400 Services=700 Imports=500 Change in business inventories=100 Durable goods=400 Nondurable goods=600 Exports=300 Residential investment=300 State and local purchases=600 Nonresidential investment=700 The value for gross private domestic investment in billions of dollars is A. 800. B. 900. C. 1,000. D. 1,100.

D. 1,100.

Federal purchases of goods=1,400 Services=700 Imports=500 Change in business inventories=100 Durable goods=400 Nondurable goods=600 Exports=300 Residential investment=300 State and local purchases=600 Nonresidential investment=700 Personal consumption expenditures in billions of dollars are A. 1,000. B. 1,100. C. 1,300. D. 1,700.

D. 1,700.

Refer to the information provided in Table 7.3 below to answer the questions that follow. Table 7.3 Price per Unit in Units Purchased 2013 2014 2015 2016 Blueberries 8 ​$2.00 ​$2.00 ​$2.10 ​$2.40 Pineapples 5 ​$2.00 ​$2.50 ​$2.50 ​$3.00 Cheese 3 ​$2.50 ​$3.00 ​$3.50 ​$4.00 Refer to Table 7.3. If 2014 is the base​ year, the price index in 2015 is A. 93.9. B. 94.2. C. 105.8. D. 106.1.

D. 106.1.

Refer to the information provided in Table 7.3 below to answer the questions that follow. Table 7.3 Price per Unit in Units Purchased 2013 2014 2015 2016 Blueberries 8 ​$2.00 ​$2.00 ​$2.10 ​$2.40 Pineapples 5 ​$2.00 ​$2.50 ​$2.50 ​$3.00 Cheese 3 ​$2.50 ​$3.00 ​$3.50 ​$4.00 Refer to Table 7.3 If 2014 is the base​ year, the price index in 2016 is A. 81.2. B. 86.8. C. 118.8. D. 123.2.

D. 123.2.

Refer to the information provided in Table 7.4 below to answer the questions that follow. Table 7.4 Price per Unit in Units Purchased 2014 2015 2016 Good A 5 ​$1.00 ​$1.50 ​$1.50 Good B 10 ​$2.00 ​$2.50 ​$3.00 Good C 4 ​$4.00 ​$4.50 ​$5.00 Refer to Table 7.4. If 2014 is the base​ year, the price index in 2015 is A. 76.8. B. 81.9. C. 119.1. D. 123.2.

D. 123.2.

Durable goods=600 Nonresidential investment=400 Federal purchases of goods=350 Exports=300 State and local purchases of goods=100 Residential investment=150 Services=900 Imports=100 Change in business inventories=−40 Nondurable goods=800 Personal consumption expenditures in billions of dollars are A. 1,400. B. 1,500. C. 1,700. D. 2,300.

D. 2,300.

Refer to the information provided in Table 7.4 below to answer the questions that follow. Table 7.4 Price per Unit in Units Purchased 2014 2015 2016 Good A 5 ​$1.00 ​$1.50 ​$1.50 Good B 10 ​$2.00 ​$2.50 ​$3.00 Good C 4 ​$4.00 ​$4.50 ​$5.00 Refer to Table 7.4. If 2014 is the base​ year, the inflation rate between 2014 and 2015 is A. 12.4%. B. 17.6%. C. 19.1%. D. 23.2%.

D. 23.2%.

Durable goods=600 Nonresidential investment=400 Federal purchases of goods=350 Exports=300 State and local purchases of goods=100 Residential investment=150 Services=900 Imports=100 Change in business inventories=−40 Nondurable goods=800 The value of government spending in billions of dollars is A. 100. B. 250. C. 350. D. 450.

D. 450.