Question 1

Which of the following would be classified as a consumer nondurable?

Accepted Answer

A)  New clothing 
B)  A new central heating system 
C)  A new car 
D)  A new bedroom suite 
E)  A new riding mower 
A)  New clothing 
B)  A new central heating system 
C)  A new car 
D)  A new bedroom suite 
E)  A new riding mower A

Question 2

Which of the following is a flow variable?

Accepted Answer

A)  the number of cars registered in the U.S. 
B)  the number of unemployed workers this week 
C)  your total net worth yesterday 
D)  the government debt this year 
E)  a salary of $4,000 per month 
A)  the number of cars registered in the U.S. 
B)  the number of unemployed workers this week 
C)  your total net worth yesterday 
D)  the government debt this year 
E)  a salary of $4,000 per month E

Question 3

Improvements in the quality of goods and services over time

Accepted Answer

A)  cause GDP statistics to understate true output growth from year to year 
B)  cause GDP statistics to overstate true output growth from year to year 
C)  are fully accounted for in the Bureau of Economic Analysis' measurement of GDP 
D)  are reflected in higher prices and therefore do not affect the measurement of real GDP 
E)  are offset by declining productivity over time 
A)  cause GDP statistics to understate true output growth from year to year 
B)  cause GDP statistics to overstate true output growth from year to year 
C)  are fully accounted for in the Bureau of Economic Analysis' measurement of GDP 
D)  are reflected in higher prices and therefore do not affect the measurement of real GDP 
E)  are offset by declining productivity over time A

Question 4

The largest component of private investment expenditure is

Accepted Answer

A)  inventories 
B)  the capital stock 
C)  new home construction 
D)  purchases of newly-produced plant and equipment 
E)  government investment in private industries 
A)  inventories 
B)  the capital stock 
C)  new home construction 
D)  purchases of newly-produced plant and equipment 
E)  government investment in private industries

Question 5

Which of the following people would be considered frictionally unemployed?

Accepted Answer

A)  The President of the United States 
B)  An elementary school student 
C)  A lifeguard unemployed during the winter 
D)  A high school graduate entering the labor market for the first time 
E)  A person laid off from his job 
A)  The President of the United States 
B)  An elementary school student 
C)  A lifeguard unemployed during the winter 
D)  A high school graduate entering the labor market for the first time 
E)  A person laid off from his job

Question 6

Suppose the Bureau of Labor Statistics reports that the noninstitutional civilian population is 250 million.Of those,150 million are employed and 5 million are unemployed.Of the 150 million employed,5 million would like to be working twice as many hours and of the 250 million,5 million have given up the search for work.The unemployment rate reported by the BLS would be __________,while if the BLS counted the discouraged workers as unemployed the unemployment rate would be __________.

Accepted Answer

A)  6.25%;3.2% 
B)  2%;6.25% 
C)  6.25%;2% 
D)  3.2%;6.25% 
E)  6%;6.25% 
A)  6.25%;3.2% 
B)  2%;6.25% 
C)  6.25%;2% 
D)  3.2%;6.25% 
E)  6%;6.25%

Question 7

Suppose a U.S.automobile manufacturer produced $200 million worth of automobiles in the United States in 2009,but $50 million worth went unsold.How much was the company's contribution to GDP?

Accepted Answer

A)  $50 million 
B)  $250 million 
C)  $150 million 
D)  $200 million 
E)  -$150 million 
A)  $50 million 
B)  $250 million 
C)  $150 million 
D)  $200 million 
E)  -$150 million

Question 8

Full employment occurs only when the unemployment rate is 0%.

Accepted Answer

A) True 
 B)False

Question 9

Increases in inventories are subtracted from GDP because they reflect output that is produced but not sold.

Accepted Answer

A) True 
 B)False

Question 10

The sale of which of the following would appear without any modification in GDP?

Accepted Answer

A)  Used automobiles 
B)  Iron ore mined from the ground 
C)  Maid services 
D)  Aluminum rods used in construction 
E)  Wood pulp 
A)  Used automobiles 
B)  Iron ore mined from the ground 
C)  Maid services 
D)  Aluminum rods used in construction 
E)  Wood pulp

Question 11

An example of a frictionally unemployed individual is

Accepted Answer

A)  Sylvia,who quit her job to spend more time with her children 
B)  Rod,the lifeguard,who cannot find a job because the temperature is too low in October 
C)  Ileana,a college student who quits her job to return to school 
D)  Steve,an individual does not have skills to keep his job as an aerospace engineer 
E)  Samantha,who quits her job to look for better one 
A)  Sylvia,who quit her job to spend more time with her children 
B)  Rod,the lifeguard,who cannot find a job because the temperature is too low in October 
C)  Ileana,a college student who quits her job to return to school 
D)  Steve,an individual does not have skills to keep his job as an aerospace engineer 
E)  Samantha,who quits her job to look for better one

Question 12

Mike is an automobile worker.Because of technological changes in the way automobiles are produced and the increased use of automation,Mike was recently laid off and is currently seeking another job.Mike is best described as being

Accepted Answer

A)  frictionally unemployed 
B)  structurally unemployed 
C)  seasonally unemployed 
D)  not in the labor force 
E)  cyclically unemployed 
A)  frictionally unemployed 
B)  structurally unemployed 
C)  seasonally unemployed 
D)  not in the labor force 
E)  cyclically unemployed

Question 13

Personal consumption spending now comprises approximately what fraction of GDP?

Accepted Answer

A)  One-third 
B)  One-sixth 
C)  Three-quarters 
D)  One-quarter 
E)  One-half 
A)  One-third 
B)  One-sixth 
C)  Three-quarters 
D)  One-quarter 
E)  One-half

Question 14

Some of the inaccuracies in measuring GDP are attributable to

Accepted Answer

A)  monopolization 
B)  ignoring production by U.S.-owned plants abroad 
C)  the underground economy and quality changes 
D)  tax evasion and inflation 
E)  short-term changes in spending 
A)  monopolization 
B)  ignoring production by U.S.-owned plants abroad 
C)  the underground economy and quality changes 
D)  tax evasion and inflation 
E)  short-term changes in spending

Question 15

Which of the following would be included in the expenditures approach to calculating U.S.GDP?

Accepted Answer

A)  Wage and salary payments to U.S.workers 
B)  Interest paid on borrowed funds 
C)  Government payments of social security benefits 
D)  Purchases of new trucks by Federal Express 
E)  Wage payments to U.S.citizens working outside the U.S. 
A)  Wage and salary payments to U.S.workers 
B)  Interest paid on borrowed funds 
C)  Government payments of social security benefits 
D)  Purchases of new trucks by Federal Express 
E)  Wage payments to U.S.citizens working outside the U.S.

Question 16

An example of a good whose production is counted in this year's GDP is

Accepted Answer

A)  a share of corporate stock 
B)  a used book 
C)  an acre of farm land 
D)  a used car 
E)  a new shirt 
A)  a share of corporate stock 
B)  a used book 
C)  an acre of farm land 
D)  a used car 
E)  a new shirt

Question 17

If we included the purchases of used goods in GDP,

Accepted Answer

A)  we would be overestimating GDP 
B)  we would be underestimating GDP 
C)  we would be accurately measuring GDP 
D)  the effect on GDP would vary depending on what year the goods were sold new 
E)  we could offset any measurement problems by also including purchases of stocks and bonds 
A)  we would be overestimating GDP 
B)  we would be underestimating GDP 
C)  we would be accurately measuring GDP 
D)  the effect on GDP would vary depending on what year the goods were sold new 
E)  we could offset any measurement problems by also including purchases of stocks and bonds

Question 18

Which of the following four elements contribute to GDP in the expenditure approach?

Accepted Answer

A)  Consumption spending,private investment,government purchases,net exports 
B)  Consumption spending,business investment,government purchases,imports 
C)  Consumption of services,private investment,government consumption,exports 
D)  Consumption of goods,private investment,government investment,government consumption 
E)  Consumption of durable goods,private investment,government purchases,net exports 
A)  Consumption spending,private investment,government purchases,net exports 
B)  Consumption spending,business investment,government purchases,imports 
C)  Consumption of services,private investment,government consumption,exports 
D)  Consumption of goods,private investment,government investment,government consumption 
E)  Consumption of durable goods,private investment,government purchases,net exports

Question 19

Real GDP is calculated because

Accepted Answer

A)  it is a much better measure of economic behavior than nominal GDP 
B)  the value of the dollar is increasing 
C)  it allows us to make comparisons between countries 
D)  nominal GDP has no theoretical foundation 
E)  nominal GDP is corrected for inflation 
A)  it is a much better measure of economic behavior than nominal GDP 
B)  the value of the dollar is increasing 
C)  it allows us to make comparisons between countries 
D)  nominal GDP has no theoretical foundation 
E)  nominal GDP is corrected for inflation

Question 20

An example of a service counted in this year's GDP is

Accepted Answer

A)  buying shampoo to give your pet a bath 
B)  cleaning your house 
C)  trimming your own hair 
D)  hiring a gardener to weed your garden 
E)  polishing your friend's car as a friendly gesture 
A)  buying shampoo to give your pet a bath 
B)  cleaning your house 
C)  trimming your own hair 
D)  hiring a gardener to weed your garden 
E)  polishing your friend's car as a friendly gesture

Which of the following would be classified as a consumer nondurable?

Which of the following is a flow variable?

Improvements in the quality of goods and services over time

The largest component of private investment expenditure is

Which of the following people would be considered frictionally unemployed?

Suppose a U.S.automobile manufacturer produced $200 million worth of automobiles in the United States in 2009,but $50 million worth went unsold.How much was the company's contribution to GDP?

Full employment occurs only when the unemployment rate is 0%.

Increases in inventories are subtracted from GDP because they reflect output that is produced but not sold.

The sale of which of the following would appear without any modification in GDP?

An example of a frictionally unemployed individual is

Mike is an automobile worker.Because of technological changes in the way automobiles are produced and the increased use of automation,Mike was recently laid off and is currently seeking another job.Mike is best described as being

Personal consumption spending now comprises approximately what fraction of GDP?

Some of the inaccuracies in measuring GDP are attributable to

Which of the following would be included in the expenditures approach to calculating U.S.GDP?

An example of a good whose production is counted in this year's GDP is

If we included the purchases of used goods in GDP,

Which of the following four elements contribute to GDP in the expenditure approach?

Real GDP is calculated because

An example of a service counted in this year's GDP is

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 6: Production, Income, and Employment

Which of the following would be classified as a consumer nondurable?

Which of the following is a flow variable?

Improvements in the quality of goods and services over time

The largest component of private investment expenditure is

Which of the following people would be considered frictionally unemployed?

Suppose a U.S.automobile manufacturer produced $200 million worth of automobiles in the United States in 2009,but $50 million worth went unsold.How much was the company's contribution to GDP?

Full employment occurs only when the unemployment rate is 0%.

Increases in inventories are subtracted from GDP because they reflect output that is produced but not sold.

The sale of which of the following would appear without any modification in GDP?

An example of a frictionally unemployed individual is

Mike is an automobile worker.Because of technological changes in the way automobiles are produced and the increased use of automation,Mike was recently laid off and is currently seeking another job.Mike is best described as being

Personal consumption spending now comprises approximately what fraction of GDP?

Some of the inaccuracies in measuring GDP are attributable to

Which of the following would be included in the expenditures approach to calculating U.S.GDP?

An example of a good whose production is counted in this year's GDP is

If we included the purchases of used goods in GDP,

Which of the following four elements contribute to GDP in the expenditure approach?

Real GDP is calculated because

An example of a service counted in this year's GDP is

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters