Question 1

Which of the following would increase the net export component of U.S. GDP?

Accepted Answer

A) A bottle of California wine is purchased in London 
B) A car produced in Japan is purchased in California 
C) A bottle of French wine is purchased in New York 
D) A car produced in Michigan is purchased in Louisiana 
A) A bottle of California wine is purchased in London 
B) A car produced in Japan is purchased in California 
C) A bottle of French wine is purchased in New York 
D) A car produced in Michigan is purchased in Louisiana

Question 2

Gross domestic product (GDP)equals the ________ of final ________ produced within a country during a given period of time.

Accepted Answer

A) market value; goods 
B) market value; services 
C) market value; goods and services 
D) quantity; goods and services 
A) market value; goods 
B) market value; services 
C) market value; goods and services 
D) quantity; goods and services

Question 3

GDP equals the value added by producers of:

Accepted Answer

A) intermediate goods and services only. 
B) final goods and services only. 
C) intermediate goods and services, as well as final goods and services. 
D) intermediate and final goods only. 
A) intermediate goods and services only. 
B) final goods and services only. 
C) intermediate goods and services, as well as final goods and services. 
D) intermediate and final goods only.

Question 4

Who from among the following would be classified as out of the labor force?

Accepted Answer

A) A person with a part-time job who wants and is looking for a full-time job. 
B) A person who is willing to work and has looked for a job in the last week. 
C) A person who is willing to work but has not looked for a job in two months. 
D) None of these people would be classified as out of the labor force. 
A) A person with a part-time job who wants and is looking for a full-time job. 
B) A person who is willing to work and has looked for a job in the last week. 
C) A person who is willing to work but has not looked for a job in two months. 
D) None of these people would be classified as out of the labor force.

Question 5

Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process:  
$$\begin{array} { | l | c | r | } 
\hline { \text { Name of Campany } } & \text { Revenues } & \text { Cast af Pur chased Inguts } \
\hline \text { Citrus Growers Inc. } & \$ 0.75 & \mathbf { 0 } \
\hline \text { Florida Jarn Cormpany } & \$ 2.00 & \$ 0.75 \
\hline \text { The Corner Store } & \$ 2.50 & \$ 2.00 \
\hline
\end{array}$$  
What is the sum of the value added of all the firms?

Accepted Answer

A) $2.50 
B) $2.75 
C) $4.50 
D) $5.25 
A) $2.50 
B) $2.75 
C) $4.50 
D) $5.25

Question 6

Consumption expenditures include spending by households on:

Accepted Answer

A) exports. 
B) inventories. 
C) residential housing. 
D) services. 
A) exports. 
B) inventories. 
C) residential housing. 
D) services.

Question 7

Investment spending includes spending on:

Accepted Answer

A) consumer durable goods. 
B) new capital goods. 
C) services. 
D) stocks and bonds. 
A) consumer durable goods. 
B) new capital goods. 
C) services. 
D) stocks and bonds.

Question 8

In a small town of 100 people, there are 10 children under 16, 10 retired people, 60 people with full-time jobs, 3 people with part-time jobs, 3 full-time students over 16, and 4 full-time homemakers. The remaining people did not have jobs, but wanted jobs. What is the unemployment rate in this town?

Accepted Answer

A) 10.0 percent 
B) 11.0 percent 
C) 13.7 percent 
D) 14.5 percent 
A) 10.0 percent 
B) 11.0 percent 
C) 13.7 percent 
D) 14.5 percent

Question 9

Data for an economy shows that the unemployment rate is 10 percent, the participation rate 80 percent, and 200 million people 16 years or older are not in the labor force. How many people are in the working-age population in this economy?

Accepted Answer

A) 250 million 
B) 800 million 
C) 1.0 billion 
D) 1.6 billion 
A) 250 million 
B) 800 million 
C) 1.0 billion 
D) 1.6 billion

Question 10

The value added by any firm equals the firm's ________ from selling the product minus ________.

Accepted Answer

A) revenue; labor expenses 
B) revenue; the cost of inputs purchased from other firms 
C) profits; labor expenses 
D) profits; the cost of inputs purchased from other firms 
A) revenue; labor expenses 
B) revenue; the cost of inputs purchased from other firms 
C) profits; labor expenses 
D) profits; the cost of inputs purchased from other firms

Question 11

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 real GDP in 2017?

Accepted Answer

A) $9,000 
B) $10,000 
C) $12,000 
D) $12,500 
A) $9,000 
B) $10,000 
C) $12,000 
D) $12,500

Question 12

Suppose a jar of DeLux popcorn that is ultimately sold to a customer at Friendly Groceries is produced by the following production process:  
$$\begin{array} { | l | c | r | } 
\hline { \text { Name of Campany } } & \text { Revenues } & \text { Cast af Pur chased Inguts } \
\hline \text { Citrus Growers Irc. } & \$ 0.75 & \mathbf { 0 } \
\hline \text { Florida Jarn Cormparty } & \$ 2.00 & \$ 0.75 \
\hline \text { The Comer Store } & \$ 2.50 & \$ 2.00 \
\hline
\end{array}$$ If the corn was grown and the jar of popcorn produced in the year 2017, but the jar was sold at Friendly Groceries in the year 2018, what is the contribution of these transactions to GDP in the year 2018?

Accepted Answer

A) $0.00 
B) $0.50 
C) $1.50 
D) $4.00 
A) $0.00 
B) $0.50 
C) $1.50 
D) $4.00

Question 13

In a small town of 100 people, there are 10 children under 16, 10 retired people, 60 people with full-time jobs, 3 people with part-time jobs, 3 full-time students over 16, and 4 full-time homemakers. The remaining people did not have jobs, but wanted them. What is the participation rate in this town?

Accepted Answer

A) 63.0 percent 
B) 72.0 percent 
C) 81.1 percent 
D) 87.5 percent 
A) 63.0 percent 
B) 72.0 percent 
C) 81.1 percent 
D) 87.5 percent

Question 14

Profits, rents, interest, and royalties are examples of:

Accepted Answer

A) consumption. 
B) labor income. 
C) capital income. 
D) investment. 
A) consumption. 
B) labor income. 
C) capital income. 
D) investment.

Question 15

National defense services provided by the military 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 16

Consumption spending includes spending on:

Accepted Answer

A) durables, nondurables, and services. 
B) stocks, bonds, and other financial instruments. 
C) capital goods, residential housing, and changes in inventories. 
D) goods and services by federal, state, and local governments. 
A) durables, nondurables, and services. 
B) stocks, bonds, and other financial instruments. 
C) capital goods, residential housing, and changes in inventories. 
D) goods and services by federal, state, and local governments.

Question 17

If prices in the current year are higher on average than in the base year, real GDP in the current year ________ nominal GDP in the current year.

Accepted Answer

A) is greater than 
B) is less than 
C) is equal to 
D) could be greater than or less than 
A) is greater than 
B) is less than 
C) is equal to 
D) could be greater than or less than

Question 18

All of the following are costs of unemployment EXCEPT:

Accepted Answer

A) lost leisure time. 
B) lost tax revenue. 
C) lost self-esteem. 
D) lost income. 
A) lost leisure time. 
B) lost tax revenue. 
C) lost self-esteem. 
D) lost income.

Question 19

The table below gives the quantities and prices for 2005 and 2015 for an economy that produces just two goods: sailboats and coconuts.    
For this economy that produces just sailboats and coconuts, and with 2005 as the base year, nominal GDP was approximately ________ times larger in 2015 than it was in 2005.

Accepted Answer

A) 1.34 
B) 1.65 
C) 1.77 
D) 2.19 
A) 1.34 
B) 1.65 
C) 1.77 
D) 2.19

Question 20

In the base year, real GDP ________ nominal GDP.

Accepted Answer

A) is greater than 
B) is less than 
C) is equal to 
D) could be greater than or less than 
A) is greater than 
B) is less than 
C) is equal to 
D) could be greater than or less than

Exam 17: Measuring Economic Activity: GDP and Unemployment

Which of the following would increase the net export component of U.S. GDP?

Gross domestic product (GDP)equals the ________ of final ________ produced within a country during a given period of time.

GDP equals the value added by producers of:

Who from among the following would be classified as out of the labor force?

Consumption expenditures include spending by households on:

Investment spending includes spending on:

Data for an economy shows that the unemployment rate is 10 percent, the participation rate 80 percent, and 200 million people 16 years or older are not in the labor force. How many people are in the working-age population in this economy?

The value added by any firm equals the firm's ________ from selling the product minus ________.

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 real GDP in 2017?

Profits, rents, interest, and royalties are examples of:

National defense services provided by the military are:

Consumption spending includes spending on:

If prices in the current year are higher on average than in the base year, real GDP in the current year ________ nominal GDP in the current year.

All of the following are costs of unemployment EXCEPT:

In the base year, real GDP ________ nominal GDP.

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

Filters

Gross domestic product (GDP)equals the of final produced within a country during a given period of time.

The value added by any firm equals the firm's from selling the product minus .