Exam 6: Production, Income, and Employment

Using the table below,calculate GDP for a particular year. Wages and salaries \ 2,000 Government purchases of goods and services \ 500 Exports \ 800 Rental income \ 300 Consumption spending \ 3,000 Transfer payments \ 300 Private investment spending \ 600 Profit \ 1,200 Imports \ 600 Interest income \ 800 Purchases of corporate stock \ 500 Based on the above information,GDP in this year was

GDP can be used to measure both short-term changes (i.e. ,over several months)and long-term changes in economic activity.

Which of the following factors may lead to an underestimation of the significance of unemployment when evaluating the overall unemployment rate?

Which of the following would be included in a year's GDP?

Suppose that in 2009,private investment spending was $500 billion,government investment was $300 billion,and depreciation was $250 billion.How much did the capital stock increase in 2009 (assume there were no other changes that affect the capital stock)?

At what U.S.unemployment rate do most economists believe full employment occurs?

If the full-employment rate of unemployment is 5 percent,and the economy is experiencing a 7 percent unemployment rate,what is the rate of cyclical unemployment?

A firm's value added is

This year,Shirts Inc.purchased $1,000 worth of silk from the Silky Silkworm Company,$100 worth of buttons from Barney's Buttons,and $200 worth of thread from Tracy's Thread Company.Shirts Inc.sold the shirts they produced for $2,000.As a result of these transactions,how much did Shirts Inc.contribute to GDP this year?

Cyclical unemployment

Frictional unemployment is joblessness

In the factor payments approach,owners of land receive

Transfer payments are

GDP is used in the __________ to __________.

Assume that the telephone company built a new plant this year.The value of the new plant is

Which of the following would be classified as a government purchase?

If GDP is $1,000,consumption is $750,interest payments are $200,rent payments are $400,and profits are $200,what must wages and salaries equal?

What fraction of the labor force is cyclically unemployed when structural unemployment is 2 percent,frictional unemployment is 2.5 percent,seasonal unemployment is 1 percent,and the overall unemployment rate is 8 percent?

Which of the following is the best definition of potential output?

The presence of involuntary part-time workers