question

A nation's gross domestic product (GDP):

answer

can be found by summing C + Ig + G + Xn.

question

GDP is the:

answer

monetary value of all final goods and services produced within the borders of a nation in a particular year.

question

National income accountants can avoid multiple counting by:

answer

only counting final goods.

question

Which of the following is a final good or service?

answer

A haircut purchased by a father for his 12 year-old son.

question

Alejandro Scoobertini owns a store specializing in soccer jerseys. In 2012, he purchased $150,000 worth of jerseys from manufacturers, employed one worker for $40,000, purchased $20,000 worth of supplies from an office supply store, and sold jerseys for $280,000. Based on this information, what was the value added at Alejandro's store in 2012?

answer

$70,000.

question

Which of the following transactions would be included in GDP?

answer

Peter buys a newly constructed house.

question

Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete. It sells 10,000 cubic yards of concrete at $30 a cubic yard. The value added by Setup Corporation is:

answer

$200,000.

question

If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that:

answer

net investment is negative.

question

Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment Economy C: gross investment exceeds depreciation Refer to the information. Positive net investment is occurring in:

answer

economy C only.

question

In national income accounting, the consumption category of expenditures includes purchases of:

answer

consumer durable goods, consumer nondurable goods, and services.

question

Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. GDP in year 2 is:

answer

$210 billion.

question

In calculating GDP, governmental transfer payments, such as Social Security or unemployment compensation, are:

answer

not counted.

question

The largest component of total expenditures in the United States is:

answer

consumption.

question

Answer the question on the basis of the following data. All figures are in billions of dollars: Refer to the data. GDP is:

answer

$121

question

Answer the question on the basis of the following data. All figures are in billions of dollars: Refer to the data. GDP is:

answer

$417.

question

Answer the question on the basis of the following data. All figures are in billions of dollars. The gross domestic product for the above economy is:

answer

$110.

question

Answer the question on the basis of the following data. All figures are in billions of dollars. Refer to the data. The gross domestic product is:

answer

$307

question

Answer the question on the basis of the following data. All figures are in billions of dollars. Refer to the data. Personal income is:

answer

$228

question

Answer the question on the basis of the following national income data. All figures are in billions of dollars. Refer to the data. U.S. imports are:

answer

$14.

question

Answer the question on the basis of the following national income data. All figures are in billions of dollars. Refer to the data. Personal consumption expenditures:

answer

cannot be calculated.

question

Nominal GDP is:

answer

the sum of all monetary transactions involving final goods and services that occur in the economy in a year.

question

A price index is:

answer

a comparison of the current price of a market basket to a fixed point of reference.

question

Recurring upswings and downswings in an economy's real GDP over time are called:

answer

business cycles.

question

The phase of the business cycle in which real GDP declines is called:

answer

a recession.

question

In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

answer

Expansion.

question

Answer the question on the basis of the following information about the hypothetical economy of Scoob. All figures are in millions. Refer to the given information. The labor force in Scoob is:

answer

102 million.

question

Answer the question on the basis of the following information about the hypothetical economy of Scoob. All figures are in millions. Refer to the given information. The unemployment rate in Scoob is:

answer

6.9 percent

question

Kara voluntarily quit her job as an insurance agent to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management. Kara presently is:

answer

frictionally unemployed.

question

Alex works in his own home as a homemaker and full-time caretaker of his children. Officially, he is:

answer

not in the labor force.

question

Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are employed, the unemployment rate is:

answer

6 percent.

question

Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, all else equal, the official unemployment rate would:

answer

decline.

question

Susie has lost her job in a Vermont textile plant because of import competition. She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be available. We can say that Susie is faced with:

answer

structural unemployment.

question

Dr. Homer Simpson, an economics professor, decided to take a year off from teaching to run a commercial fishing boat in Alaska. That year, Professor Simpson would be officially counted as:

answer

employed

question

Which of the following constitute the types of unemployment occurring at the natural rate of unemployment?

answer

Structural and frictional unemployment.

question

Answer the question on the basis of the following information about a hypothetical economy: Refer to the given information. The unemployment rate is:

answer

12.5 percent.

question

A large negative GDP gap implies:

answer

a high rate of unemployment.

question

If potential GDP is $330 billion and there is a positive GDP gap of $30 billion, real GDP is:

answer

$360 billion.

question

Okun's law:

answer

shows the relationship between the unemployment rate and the size of the negative GDP gap.

question

Inflation means that:

answer

prices on average are rising, although some particular prices may be falling.

question

If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced:

answer

deflation of 3.33 percent.

question

GDP is the market value of:

answer

All final goods and services produced in an economy in a given year

question

To avoid multiple counting in national income accounts:

answer

Only final goods and services should be counted

question

An example of intermediate goods would be:

answer

Paper and ink bought by a publishing company

question

A business buys $5,000 worth of inputs from other firms in order to produce a product. The business makes 100 units of the product and each of them sells for $65. The value added by the business to these products is:

answer

$1,500

question

Firm A produces something that Firm B uses as an input. The product of Firm B, in turn, is purchased and used as an input by Firm C, and so on down the line through Firm E, which produces the end product. The total value added by Firms A-E from the production of the end product described here is:

answer

$3,800

question

Which of the following is a private transfer payment?

answer

A check for $250 sent by a parent to a daughter at college

question

The two ways of looking at GDP are the:

answer

Expenditures approach and income approach

question

The largest expenditure component of GDP is:

answer

Personal consumption expenditures

question

Which of the following is not a component of GDP in the expenditures approach?

answer

Workers' wages and other compensation

question

Business inventories increase when firms produce:

answer

More than they sell, and the inventory increase is added to GDP

question

When gross private domestic investment exceeds depreciation, it can be concluded that:

answer

Net investment is positive

question

Net exports is a positive number when:

answer

A nation's exports of goods and services exceed its imports

question

GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,410 billion. Net exports must be:

answer

-$84 billion

question

The following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320); imports ($35); exports ($22); personal consumption expenditures ($2,460); and, government purchases ($470). What is GDP in this economy?

answer

$3,237 billion

question

The following data about a hypothetical economy are in billions of dollars. Refer to the above data. GDP in this economy is:

answer

$6,230 billion

question

(The following national income data are in billions of dollars.) Refer to the above data. This nation's exports are:

answer

$24 billion

question

Refer to the above data. The expenditures approach to GDP calculation can be done by adding:

answer

8 through 11

question

Refer to the above data. Gross domestic product in this economy is:

answer

$1,079 billion

question

Refer to the above data. Disposable income in this economy is:

answer

$611 billion

question

Refer to the above data. National income is:

answer

$384 billion

question

If the price index in year A is 130, this means that:

answer

Prices in year A are on average 30 percent higher than in the base year

question

The GDP deflator or price index equals:

answer

Nominal GDP divided by real GDP

question

The base year is 2005, and the GDP price index in 2004 is 92.0. This implies that the:

answer

Prices in 2005 were higher than in 2004

question

Consumers in an economy buy only three general types of products, A, B, and C. Changes in the prices of these items over a period are shown below: Using year 1 as the base year, the country's price index in year 2 is:

answer

106.3

question

The recurrent ups and downs in the level of economic activity extending over several years are referred to as:

answer

Business cycles

question

Refer to the diagram above. The phases of the business cycle from points A to D are, respectively:

answer

Peak, recession, trough, expansion

question

Which phase of the business cycle would be most closely associated with an economic contraction?

answer

Recession

question

Full-time homemakers and retirees are classified in the BLS data as:

answer

Not in the labor force

question

The unemployed are those people who:

answer

Are not employed but are seeking work

question

Which of the following is the correct way to calculate the unemployment rate?

answer

[(unemployed)/(labor force)] × 100

question

If the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, then the unemployment rate would be:

answer

8 percent

question

The unemployment rate in an economy is 6%. The total population of the economy is 290 million, and the size of the civilian labor force is 150 million. The number of unemployed workers in this economy is:

answer

9 million

question

The total adult population of an economy is 175 million, the number of employed is 122 million, and the number of unemployed is 17 million. The percent of adults who are not in the labor force is:

answer

20.6 percent

question

The best example of a "frictionally unemployed" worker is one who:

answer

Is in the process of voluntarily switching jobs

question

A worker who loses a job at a call center because the company moved the call center operations to another country is an example of:

answer

Structural unemployment

question

Kevin has lost his job in an automobile plant because the company switched to robots for its welding step in the assembly line. Kevin plans to go to technical school to learn how to repair microcomputers. The type of unemployment Kevin is faced with is:

answer

Structural

question

The following items describe the responses of four individuals to a Bureau of Labor Statistics (BLS) survey of employment. 1. Mollie just graduated from college and is now looking for work. She has had three job interviews in the past month, but still has not gotten a job offer. 2. George used to work in an automotive assembly plant. He was laid off six months ago as the economy weakened. He expects to return to work in a few months when national economic conditions improve. 3. Jeanette worked as an aircraft design engineer for a company that produces military aircraft until she lost her job last year when the Federal government cut defense spending. She has been looking for similar work for a year but no company seems interested in her aircraft design skills. 4. Ricardo lost his job last year when his company downsized and laid off middle-level managers. He tried to find another job for a year, but was unsuccessful and quit looking for work. Refer to the above information. Which individual is frictionally unemployed?

answer

Mollie

question

The natural rate of unemployment:

answer

Is equal to the total of frictional and structural unemployment

question

Okun's law indicates that for:

answer

Every 1 percent that the actual unemployment rate exceeds the natural unemployment rate, a 2 percent GDP gap is generated

question

Inflation is a rise in:

answer

The general level of prices over time

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