Exam 11: Measuring Macroeconomic Activity

The purchase of a Boeing airplane by the U.S.government is considered part of government consumption expenditures and gross investment.

Changes in the amount of goods produced, but not sold in a given year is called:

Suppose an apartment complex is converted to an owner occupied condominium.Suppose that the estimated value of the condominium owners' housing services is now the same as their former rent.

Distinguish between real and nominal GDP.Which one is a better measure of the business cycle?

The core rate of inflation is a measure of the relative price changes that excludes changes in energy and food prices.

The BLS obtains employment information from a monthly survey of a sample of approximately 60,000 households.

In the value added approach to calculating GDP, counting both the intermediate good and the final product would understate the contribution to GDP.

The labor force is 100 million and the unemployment rate is 5 percent.One million people quit looking for a job.What is it called when an individual leaves the labor force, and in this case what is the new unemployment rate?

A French citizen lives in Detroit, but works in Windsor, Canada; his income is counted in U.S.GDP.

Determine whether each of the following outputs is considered an intermediate good, a final good, or neither for purposes of calculating GDP in the current year. a.New tires put on a new Corvette at Big O Tire store b.The net sales price of a home built in 1990 when it is resold in 1997 c.The commission earned by a stock broker on the sale of stock d.The net price that is paid for 1000 shares of stock in Dell

Declining real GDP for two quarters in a row is often called a recession.

Table 11.1 -Refer to Table 11.1.What is the value of net exports or the trade balance?

Policymakers often use the natural rate of unemployment as a basis in policy formulations.

Those individuals 16 years of age and over who are working in a job or actively seeking employment are called:

The largest expenditure component in the U.S.is investment expenditures.

The labor force includes discouraged workers.

What is the relationship between unemployment and the price level in the short run?

The value of currently produced final goods and services measured in constant prices is called:

The following data summarize the expenditures for the country of XYZ during 2003 in millions of alphabet, the currency of country XYZ. a.Calculate net exports b.Calculate GDP c.Calculate national income d.Assume that the GDP deflator is 120 and calculate real GDP for 2003.

In year one, the GDP deflator is 100 and in year two 110.If nominal GDP in year two is $300 billion, what is real GDP for year two?