Question 1

Real GDP per capita refers to the ratio of real GDP to the total _____ in the economy.

Accepted Answer

A)  capital 
B)  population 
C)  labor force 
D)  exports 
A)  capital 
B)  population 
C)  labor force 
D)  exports

Question 2

By _____ the real value of payments that must be made, an increase in inflation typically is _____ for the borrowers in the economy.

Accepted Answer

A)  increasing; beneficial 
B)  increasing; harmful 
C)  decreasing; beneficial 
D)  decreasing; harmful 
A)  increasing; beneficial 
B)  increasing; harmful 
C)  decreasing; beneficial 
D)  decreasing; harmful

Question 3

An economy has an increasing number of workers who are employed part-time but would like to work full-time. Will the unemployment rate overstate or understate the severity of the problem of unemployment in the economy? Justify your answer.

Accepted Answer

In this case, the unemployment rate numb

Question 4

An economy has a labor force of 1,000. The total number of employed workers in the economy is 900, and the number of discouraged workers in the economy is 50. The unemployment rate in the economy in this case is _____ percent.

Accepted Answer

A)  5 
B)  10 
C)  15 
D)  20 
A)  5 
B)  10 
C)  15 
D)  20

Question 5

Suppose that U.S Metals sells steel to U.S Auto, which uses the steel to manufacture a car that is sold to a college student for personal use. In this case, steel is an example of _____ good, and the car is an example of _____ good.

Accepted Answer

A)  a capital; an intermediate 
B)  an intermediate; a final 
C)  a final; an intermediate 
D)  an intermediate; a capital 
A)  a capital; an intermediate 
B)  an intermediate; a final 
C)  a final; an intermediate 
D)  an intermediate; a capital

Question 6

Suppose that a can of soda cost 30 cents in 1970 and an identical can cost $2.00 in 2016. If the Consumer Price Index (CPI) in 1970 was 36, then the CPI in 2016 was:

Accepted Answer

A)  240. 
B)  250. 
C)  260. 
D)  270. 
A)  240. 
B)  250. 
C)  260. 
D)  270.

Question 7

The high point of a business cycle is called _____, and the low point of a business cycle is called a:

Accepted Answer

A)  an expansion; contraction. 
B)  an expansion; trough. 
C)  a peak; contraction. 
D)  a peak; trough. 
A)  an expansion; contraction. 
B)  an expansion; trough. 
C)  a peak; contraction. 
D)  a peak; trough.

Question 8

Which of the following will NOT be included in the U.S. GDP?

Accepted Answer

A)  social security payments made by the federal government to U.S citizens 
B)  the purchase of new military equipment by the federal government for the U.S military 
C)  spending by the federal government to maintain national parks 
D)  spending by the local government on public schools 
A)  social security payments made by the federal government to U.S citizens 
B)  the purchase of new military equipment by the federal government for the U.S military 
C)  spending by the federal government to maintain national parks 
D)  spending by the local government on public schools

Question 9

Which of the following is NOT included in the calculation of a country's GDP?

Accepted Answer

A)  consumer spending on final goods and services 
B)  government spending on the military 
C)  spending on new machinery by firms 
D)  spending on intermediate goods by firms 
A)  consumer spending on final goods and services 
B)  government spending on the military 
C)  spending on new machinery by firms 
D)  spending on intermediate goods by firms

Question 10

If both the real and nominal GDP of a country increase, then we can be sure that:

Accepted Answer

A)  production must have increased. 
B)  prices must have increased. 
C)  production must have decreased. 
D)  prices must have decreased. 
A)  production must have increased. 
B)  prices must have increased. 
C)  production must have decreased. 
D)  prices must have decreased.

Question 11

The unemployment that results because of a mismatch between the skills that workers have and the skills that employers seek is known as _____ unemployment.

Accepted Answer

A)  the natural rate of 
B)  structural 
C)  seasonal 
D)  frictional 
A)  the natural rate of 
B)  structural 
C)  seasonal 
D)  frictional

Question 12

Which one of the following will NOT benefit from a decrease in the rate of inflation?

Accepted Answer

A)  A worker at a manufacturing plant receives a fixed nominal income. 
B)  A lender has lent money to a firm at a fixed nominal interest rate. 
C)  A firm has borrowed money from a bank and must pay it back at a fixed nominal interest rate. 
D)  A person owns bonds that pay a fixed nominal interest. 
A)  A worker at a manufacturing plant receives a fixed nominal income. 
B)  A lender has lent money to a firm at a fixed nominal interest rate. 
C)  A firm has borrowed money from a bank and must pay it back at a fixed nominal interest rate. 
D)  A person owns bonds that pay a fixed nominal interest.

Question 13

During periods of rapid inflation, people hold less cash and make more frequent trips to banks and ATM machines. The costs associated with this are an example of _____ costs.

Accepted Answer

A)  menu 
B)  fixed 
C)  variable 
D)  shoe-leather 
A)  menu 
B)  fixed 
C)  variable 
D)  shoe-leather

Question 14

If an economy has a labor force of 1,000 workers out of which 900 are employed, then the unemployment rate of the economy is _____ percent.

Accepted Answer

A)  90 
B)  50 
C)  20 
D)  10 
A)  90 
B)  50 
C)  20 
D)  10

Question 15

Refer to the table Spending Data for Stewarton 2018 for fictional 2018 data for the nation of Stewarton. Use the data to calculate the GDP of Stewarton in 2018.
Table: Spending Data for Stewarton 2018

Accepted Answer

GDP = $5,000 (durable goods) + 6,000 (no

Question 16

If the real GDP per capita of a country increases over time, then it can be concluded that the:

Accepted Answer

A)  real GDP of the country must be increasing. 
B)  population of the country must be increasing. 
C)  real GDP of the country must be increasing faster than the population. 
D)  population of the country must be increasing faster than the real GDP. 
A)  real GDP of the country must be increasing. 
B)  population of the country must be increasing. 
C)  real GDP of the country must be increasing faster than the population. 
D)  population of the country must be increasing faster than the real GDP.

Question 17

The economy of the country of Stewarton has a structural unemployment rate of 2 percent, a frictional unemployment rate of 3 percent, and a cyclical unemployment rate of 2 percent (because the economy is in a recession). If there is no seasonal unemployment, then what is the natural rate of unemployment for Stewarton?

Accepted Answer

A)  3 percent 
B)  4 percent 
C)  5 percent 
D)  7 percent 
A)  3 percent 
B)  4 percent 
C)  5 percent 
D)  7 percent

Question 18

If the economy is at full employment, then there is no:

Accepted Answer

A)  unemployment. 
B)  frictional unemployment. 
C)  structural unemployment. 
D)  cyclical unemployment. 
A)  unemployment. 
B)  frictional unemployment. 
C)  structural unemployment. 
D)  cyclical unemployment.

Question 19

The real GDP of the country of Stewarton is $500 million, and it has a population of 2 million people. The real GDP per capita of Stewarton is:

Accepted Answer

A)  $100. 
B)  $150. 
C)  $200. 
D)  $250. 
A)  $100. 
B)  $150. 
C)  $200. 
D)  $250.

Question 20

Which of the following statements is NOT true?

Accepted Answer

A)  Inflation measures the rate of change in the overall price level in the economy. 
B)  If inflation is higher than expected, then the borrowers who owe a fixed amount of money lose. 
C)  If inflation is higher than the growth of income, then the workers lose. 
D)  Menu costs are an example of the transaction costs that are associated with inflation. 
A)  Inflation measures the rate of change in the overall price level in the economy. 
B)  If inflation is higher than expected, then the borrowers who owe a fixed amount of money lose. 
C)  If inflation is higher than the growth of income, then the workers lose. 
D)  Menu costs are an example of the transaction costs that are associated with inflation.

Real GDP per capita refers to the ratio of real GDP to the total _____ in the economy.

By _ the real value of payments that must be made, an increase in inflation typically is _ for the borrowers in the economy.

An economy has an increasing number of workers who are employed part-time but would like to work full-time. Will the unemployment rate overstate or understate the severity of the problem of unemployment in the economy? Justify your answer.

An economy has a labor force of 1,000. The total number of employed workers in the economy is 900, and the number of discouraged workers in the economy is 50. The unemployment rate in the economy in this case is _____ percent.

Suppose that U.S Metals sells steel to U.S Auto, which uses the steel to manufacture a car that is sold to a college student for personal use. In this case, steel is an example of _ good, and the car is an example of _ good.

Suppose that a can of soda cost 30 cents in 1970 and an identical can cost $2.00 in 2016. If the Consumer Price Index (CPI) in 1970 was 36, then the CPI in 2016 was:

The high point of a business cycle is called _____, and the low point of a business cycle is called a:

Which of the following will NOT be included in the U.S. GDP?

Which of the following is NOT included in the calculation of a country's GDP?

If both the real and nominal GDP of a country increase, then we can be sure that:

The unemployment that results because of a mismatch between the skills that workers have and the skills that employers seek is known as _____ unemployment.

Which one of the following will NOT benefit from a decrease in the rate of inflation?

During periods of rapid inflation, people hold less cash and make more frequent trips to banks and ATM machines. The costs associated with this are an example of _____ costs.

If an economy has a labor force of 1,000 workers out of which 900 are employed, then the unemployment rate of the economy is _____ percent.

Refer to the table Spending Data for Stewarton 2018 for fictional 2018 data for the nation of Stewarton. Use the data to calculate the GDP of Stewarton in 2018. Table: Spending Data for Stewarton 2018

If the real GDP per capita of a country increases over time, then it can be concluded that the:

If the economy is at full employment, then there is no:

The real GDP of the country of Stewarton is $500 million, and it has a population of 2 million people. The real GDP per capita of Stewarton is:

Which of the following statements is NOT true?

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Exam 13: Measuring an Economys Performance

Real GDP per capita refers to the ratio of real GDP to the total _____ in the economy.

By _____ the real value of payments that must be made, an increase in inflation typically is _____ for the borrowers in the economy.

An economy has an increasing number of workers who are employed part-time but would like to work full-time. Will the unemployment rate overstate or understate the severity of the problem of unemployment in the economy? Justify your answer.

An economy has a labor force of 1,000. The total number of employed workers in the economy is 900, and the number of discouraged workers in the economy is 50. The unemployment rate in the economy in this case is _____ percent.

Suppose that U.S Metals sells steel to U.S Auto, which uses the steel to manufacture a car that is sold to a college student for personal use. In this case, steel is an example of _____ good, and the car is an example of _____ good.

Suppose that a can of soda cost 30 cents in 1970 and an identical can cost $2.00 in 2016. If the Consumer Price Index (CPI) in 1970 was 36, then the CPI in 2016 was:

The high point of a business cycle is called _____, and the low point of a business cycle is called a:

Which of the following will NOT be included in the U.S. GDP?

Which of the following is NOT included in the calculation of a country's GDP?

If both the real and nominal GDP of a country increase, then we can be sure that:

The unemployment that results because of a mismatch between the skills that workers have and the skills that employers seek is known as _____ unemployment.

Which one of the following will NOT benefit from a decrease in the rate of inflation?

During periods of rapid inflation, people hold less cash and make more frequent trips to banks and ATM machines. The costs associated with this are an example of _____ costs.

If an economy has a labor force of 1,000 workers out of which 900 are employed, then the unemployment rate of the economy is _____ percent.

Refer to the table Spending Data for Stewarton 2018 for fictional 2018 data for the nation of Stewarton. Use the data to calculate the GDP of Stewarton in 2018. Table: Spending Data for Stewarton 2018

If the real GDP per capita of a country increases over time, then it can be concluded that the:

If the economy is at full employment, then there is no:

The real GDP of the country of Stewarton is $500 million, and it has a population of 2 million people. The real GDP per capita of Stewarton is:

Which of the following statements is NOT true?

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

By _ the real value of payments that must be made, an increase in inflation typically is _ for the borrowers in the economy.

Suppose that U.S Metals sells steel to U.S Auto, which uses the steel to manufacture a car that is sold to a college student for personal use. In this case, steel is an example of _ good, and the car is an example of _ good.