Exam 5: Macroeconomics: the Big Picture

The value, at current market prices, of the final goods and services produced during a particular period is:

Figure 5-1 shows the path of real GDP growth over time. Use the figure to answer questions . -Refer to Figure 5-1. A typical business cycle begins:

Suppose nominal GDP in a country rose in the third quarter of 2008 (from the second quarter). Yet, real GDP fell in the third quarter of 2008. What could have accounted for this?

Table 5-7 shows a mechanic's hourly wage and the respective price indexes for the years 1975 and 2005. Use the table to answer questions . Table 5-7 -Refer to Table 5-7. What has happened to a mechanic's real hourly wage between 1975 and 2005?

Assuming a constant level of nominal income, the real income of an individual rises:

An indexed payment is a payment for which:

The phases of a business cycle are identified by examining the growth of real GDP.

Figure 5-1 shows the path of real GDP growth over time. Use the figure to answer questions . -Refer to Figure 5-1. The peak of the business cycle occurs:

Inflation refers to an increase in the average level of prices in an economy.

The point on a business cycle where real GDP stops rising and begins falling is called a(n):

Define the natural rate of unemployment. Identify three factors that may cause the natural rate to change over time.

Which of the following statements is true of inflation?

When the media reports the U.S. inflation rate, the number cited is usually a rate computed using:

In the Case in Point entitled "Might Increased Structural Unemployment Explain the 'Jobless Recovery' Following the 2001 Recession," economists Erica Goshen and Simon Potter note that when a layoff is temporary, the employer "suspends" the job, due to slack demand, and the employee expects to be recalled once demand picks up. With a permanent layoff, the employer eliminates the job. Which of the following statements is consistent with their observations?

Since late 2006, OPEC has successfully raised world oil prices significantly. These price increases have caused governments and firms to explore alternative sources of energy, for example bio-fuels. Consumers too have started switching toward hybrid automobiles and toward automobiles that use bio-fuels, both of which are cheaper to operate than gasoline engines. Which problems in the construction of the CPI does this situation represent?

The total labor force comprises:

Nominal GDP of a particular year is calculated as the total value of final goods and services in that year in terms of the base-year prices.

Table 5-3 shows price and output data for a small nation. Consider 2003 as the base period. Use the table to answer question 61. Table 5-3 -Refer to Table 5-3. What is the value of nominal output in 2003?

If a nation liberalizes its immigration laws and receives a significant influx of young workers:

The point in the business cycle at which a recession begins is known as the trough.