Question 1

Which of the following events would increase the unemployment rate, if nothing else changed?

Accepted Answer

A) Unemployed workers leave the labor force 
B) Employed workers leave the labor force 
C) Workers from outside the labor force become employed 
D) Unemployed workers become employed 
A) Unemployed workers leave the labor force 
B) Employed workers leave the labor force 
C) Workers from outside the labor force become employed 
D) Unemployed workers become employed

Question 2

In a country with 200 million people aged 16 years and older, 120 million are in the labor force, and 114 million are employed, what is the participation rate?

Accepted Answer

A) 40 percent 
B) 57 percent 
C) 60 percent 
D) 95 percent 
A) 40 percent 
B) 57 percent 
C) 60 percent 
D) 95 percent

Question 3

Suppose a jar of DeLux popcorn that is ultimately sold to a customer at Friendly Groceries is produced by the following production process:  
$$\begin{array} { | l | c | c | } 
\hline { \text { Name of Campany } } & \text { Revenues } & \text { Cast af Pur chased Inguts } \
\hline \text { Fulton Farrily Farm } & \$ 0.50 & \mathbf { 0 } \
\hline \text { DeLux Popconl Co. } & \$ 2.50 & \$ 0.50 \
\hline \text { Friendly Groceries } & \$ 4.00 & \$ 2.50
\end{array}$$  
 What is the value added of Fulton Family Farm?

Accepted Answer

A) $0.00 
B) $0.50 
C) $1.50 
D) $2.50 
A) $0.00 
B) $0.50 
C) $1.50 
D) $2.50

Question 4

The four components of aggregate expenditures are:

Accepted Answer

A) consumption, imports, government spending, and net exports. 
B) consumption, interest payments, government spending, and net exports. 
C) consumer durables, investment, government spending, and net exports. 
D) consumption, investment, government spending, and net exports. 
A) consumption, imports, government spending, and net exports. 
B) consumption, interest payments, government spending, and net exports. 
C) consumer durables, investment, government spending, and net exports. 
D) consumption, investment, government spending, and net exports.

Question 5

Assume an economy produces only footballs and baseballs and the base year is 2016.   
  Given the data in the table above, what is the value of nominal GDP in 2017?

Accepted Answer

A) $10,000 
B) $12,000 
C) $12,500 
D) $16,500 
A) $10,000 
B) $12,000 
C) $12,500 
D) $16,500

Question 6

If an automobile manufacturer pays $200 for a car windshield, $400 for four car tires, $100 for a car radio, and sells cars made with these parts for $20,000, then each car the automobile manufacturer sells contributes how much to GDP?

Accepted Answer

A) $19,300 
B) $20,000 
C) $20,200 
D) $20,700 
A) $19,300 
B) $20,000 
C) $20,200 
D) $20,700

Question 7

Net export spending is expenditures on:

Accepted Answer

A) stocks, bonds, and other financial instruments. 
B) goods and services sold abroad minus goods and services produced abroad. 
C) consumer durables, nondurables, and services. 
D) goods and services by federal, state, and local governments. 
A) stocks, bonds, and other financial instruments. 
B) goods and services sold abroad minus goods and services produced abroad. 
C) consumer durables, nondurables, and services. 
D) goods and services by federal, state, and local governments.

Question 8

Two groups of workers not counted as unemployed in the official unemployment statistics are ________ workers.

Accepted Answer

A) chronically unemployed and short-term unemployed 
B) chronically-unemployed and discouraged 
C) chronically unemployed and involuntary part-time 
D) discouraged and involuntary part-time 
A) chronically unemployed and short-term unemployed 
B) chronically-unemployed and discouraged 
C) chronically unemployed and involuntary part-time 
D) discouraged and involuntary part-time

Question 9

The most commonly used measure of an economy's output is:

Accepted Answer

A) the rate of employment. 
B) the rate of inflation. 
C) gross domestic product. 
D) the Dow Jones stock market index 
A) the rate of employment. 
B) the rate of inflation. 
C) gross domestic product. 
D) the Dow Jones stock market index

Question 10

Educational services provided by public schools are:

Accepted Answer

A) included in GDP at market prices. 
B) included in GDP at cost. 
C) excluded from GDP because they are not sold in markets. 
D) excluded from GDP because they are intermediate goods. 
A) included in GDP at market prices. 
B) included in GDP at cost. 
C) excluded from GDP because they are not sold in markets. 
D) excluded from GDP because they are intermediate goods.

Question 11

Which of the following is NOT a capital good?

Accepted Answer

A) Batteries purchased by a car manufacturer to install in new cars 
B) Machines purchased by a car manufacturer to measure metal thicknesses 
C) A new house purchased by a family 
D) A new apartment building purchased by a corporation 
A) Batteries purchased by a car manufacturer to install in new cars 
B) Machines purchased by a car manufacturer to measure metal thicknesses 
C) A new house purchased by a family 
D) A new apartment building purchased by a corporation

Question 12

If two countries are economically identical except that citizens in one country have more leisure time, then the level of GDP:

Accepted Answer

A) will be higher in the country with more leisure time. 
B) will be higher in the country with less leisure time. 
C) will be the same in both countries. 
D) will be greater than the level of economic well-being in each country. 
A) will be higher in the country with more leisure time. 
B) will be higher in the country with less leisure time. 
C) will be the same in both countries. 
D) will be greater than the level of economic well-being in each country.

Question 13

Capital income includes:

Accepted Answer

A) profits, rent, and interest. 
B) wages and salaries. 
C) earnings of the self-employed. 
D) capital gains from stock sales. 
A) profits, rent, and interest. 
B) wages and salaries. 
C) earnings of the self-employed. 
D) capital gains from stock sales.

Question 14

Which of the expenditure components of GDP can be negative?

Accepted Answer

A) Consumption spending on durables 
B) Net exports are negative when imports exceed exports 
C) Consumption spending on services 
D) Net exports 
A) Consumption spending on durables 
B) Net exports are negative when imports exceed exports 
C) Consumption spending on services 
D) Net exports

Question 15

Which of the following is not classified as a final good?

Accepted Answer

A) New clothing purchased by a college student 
B) Fresh vegetables purchased by a restaurant 
C) A new car purchased by a family 
D) A new machine purchased by a business 
A) New clothing purchased by a college student 
B) Fresh vegetables purchased by a restaurant 
C) A new car purchased by a family 
D) A new machine purchased by a business

Question 16

Involuntary part-time workers are:

Accepted Answer

A) chronically unemployed. 
B) considered out of the labor force. 
C) short-term unemployed workers. 
D) not counted as unemployed. 
A) chronically unemployed. 
B) considered out of the labor force. 
C) short-term unemployed workers. 
D) not counted as unemployed.

Question 17

________ is/are the market value of final goods and services produced within a country during a given period of time.

Accepted Answer

A) GDP 
B) Consumption 
C) Value added 
D) Transfer payments 
A) GDP 
B) Consumption 
C) Value added 
D) Transfer payments

Question 18

Susan Suarez would like to work forty hours per week, but can only find twenty hours per week of work. In the official employment statistics, Susan is classified as:

Accepted Answer

A) employed. 
B) unemployed. 
C) out of the labor force. 
D) underemployed. 
A) employed. 
B) unemployed. 
C) out of the labor force. 
D) underemployed.

Question 19

A person 16 years or older who does not work and does not look for work is officially classified as:

Accepted Answer

A) employed. 
B) unemployed. 
C) chronically unemployed. 
D) out of the labor force. 
A) employed. 
B) unemployed. 
C) chronically unemployed. 
D) out of the labor force.

Question 20

The duration of an unemployment spell is a measure of the:

Accepted Answer

A) income lost while unemployed. 
B) length of time a spell of unemployment lasts. 
C) number of times during a year a worker becomes unemployed. 
D) number of workers unemployed during a specific period of time. 
A) income lost while unemployed. 
B) length of time a spell of unemployment lasts. 
C) number of times during a year a worker becomes unemployed. 
D) number of workers unemployed during a specific period of time.

Exam 17: Measuring Economic Activity: GDP and Unemployment

Which of the following events would increase the unemployment rate, if nothing else changed?

In a country with 200 million people aged 16 years and older, 120 million are in the labor force, and 114 million are employed, what is the participation rate?

The four components of aggregate expenditures are:

Assume an economy produces only footballs and baseballs and the base year is 2016. Given the data in the table above, what is the value of nominal GDP in 2017?

If an automobile manufacturer pays $200 for a car windshield, $400 for four car tires, $100 for a car radio, and sells cars made with these parts for $20,000, then each car the automobile manufacturer sells contributes how much to GDP?

Net export spending is expenditures on:

Two groups of workers not counted as unemployed in the official unemployment statistics are ________ workers.

The most commonly used measure of an economy's output is:

Educational services provided by public schools are:

Which of the following is NOT a capital good?

If two countries are economically identical except that citizens in one country have more leisure time, then the level of GDP:

Capital income includes:

Which of the expenditure components of GDP can be negative?

Which of the following is not classified as a final good?

Involuntary part-time workers are:

________ is/are the market value of final goods and services produced within a country during a given period of time.

Susan Suarez would like to work forty hours per week, but can only find twenty hours per week of work. In the official employment statistics, Susan is classified as:

A person 16 years or older who does not work and does not look for work is officially classified as:

The duration of an unemployment spell is a measure of the:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

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