Question 1

Who from among the following would be classified as unemployed?

Accepted Answer

A) Brenda Smith, an 18 year old full-time college student 
B) Mario Faubert, a NHL hockey player at home sick with the flu 
C) Jack Little, a 21 year old new college graduate actively looking for his first job 
D) Sarah Lopez, a retired public school teacher 
A) Brenda Smith, an 18 year old full-time college student 
B) Mario Faubert, a NHL hockey player at home sick with the flu 
C) Jack Little, a 21 year old new college graduate actively looking for his first job 
D) Sarah Lopez, a retired public school teacher

Question 2

Intermediate goods and services are ________ production and ________ counted in GDP.

Accepted Answer

A) the end products of; are 
B) the end products of; are not 
C) used up in the process of; are 
D) used up in the process of; are not 
A) the end products of; are 
B) the end products of; are not 
C) used up in the process of; are 
D) used up in the process of; are not

Question 3

The labor force divided by the working age population equals the:

Accepted Answer

A) unemployment rate. 
B) employment rate. 
C) participation rate. 
D) population rate. 
A) unemployment rate. 
B) employment rate. 
C) participation rate. 
D) population rate.

Question 4

Which of the following activities is most likely to be counted in GDP?

Accepted Answer

A) Fran volunteers at the local veteran's hospital twice a month. 
B) Stu gave $5 to a homeless man he met in the park. 
C) Gail buys paper and crayons to donate to poor children in need of school supplies. 
D) Bud works hard five hours each week to make sure that his lawn always looks nice. 
A) Fran volunteers at the local veteran's hospital twice a month. 
B) Stu gave $5 to a homeless man he met in the park. 
C) Gail buys paper and crayons to donate to poor children in need of school supplies. 
D) Bud works hard five hours each week to make sure that his lawn always looks nice.

Question 5

If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?

Accepted Answer

A) $3 
B) $4 
C) $7 
D) $11 
A) $3 
B) $4 
C) $7 
D) $11

Question 6

A firm's revenue from selling its product minus the cost of inputs purchased from other firms is called:

Accepted Answer

A) profits. 
B) investment. 
C) value added. 
D) production costs. 
A) profits. 
B) investment. 
C) value added. 
D) production costs.

Question 7

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

Accepted Answer

A) You purchase a new washing machine produced in the U.S. 
B) You purchase a new washing machine produced in France. 
C) A laundry in Seattle purchases a new washing machine produced in the U.S. 
D) A laundry in Mexico purchases a new washing machine produced in the U.S. 
A) You purchase a new washing machine produced in the U.S. 
B) You purchase a new washing machine produced in France. 
C) A laundry in Seattle purchases a new washing machine produced in the U.S. 
D) A laundry in Mexico purchases a new washing machine produced in the U.S.

Question 8

If an economy produces 3 million oranges that sell for $0.25 each and 100,000 cars that sell for $25,000 each, then when the market value of total output is calculated:

Accepted Answer

A) oranges receive a greater weight than cars. 
B) oranges receive the same weight as cars. 
C) oranges receive a smaller weight than cars. 
D) the market value of oranges is excluded. 
A) oranges receive a greater weight than cars. 
B) oranges receive the same weight as cars. 
C) oranges receive a smaller weight than cars. 
D) the market value of oranges is excluded.

Question 9

Goods and services that are consumed by the ultimate user are called ________ goods and services.

Accepted Answer

A) intermediate 
B) final 
C) value added 
D) nominal 
A) intermediate 
B) final 
C) value added 
D) nominal

Question 10

The total market value of production in an economy must equal total:

Accepted Answer

A) profits. 
B) revenues from all transactions. 
C) consumption. 
D) spending on final goods and services. 
A) profits. 
B) revenues from all transactions. 
C) consumption. 
D) spending on final goods and services.

Question 11

Involuntary part-time workers are:

Accepted Answer

A) counted as employed. 
B) considered out of the labor force. 
C) counted as unemployed. 
D) discouraged workers. 
A) counted as employed. 
B) considered out of the labor force. 
C) counted as unemployed. 
D) discouraged workers.

Question 12

The sum of the value added by all firms equals total:

Accepted Answer

A) profits. 
B) spending on capital goods. 
C) investment spending. 
D) value of final goods and services. 
A) profits. 
B) spending on capital goods. 
C) investment spending. 
D) value of final goods and services.

Question 13

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, real 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 14

Who from among the following would be counted as unemployed?

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) All of these people would be counted as unemployed. 
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) All of these people would be counted as unemployed.

Question 15

Spending on durable goods, nondurable goods, and services is included in:

Accepted Answer

A) consumption expenditures. 
B) investment. 
C) government purchases. 
D) net exports. 
A) consumption expenditures. 
B) investment. 
C) government purchases. 
D) net exports.

Question 16

Changes in business inventories are:

Accepted Answer

A) classified as consumption expenditures. 
B) classified as investment expenditures. 
C) classified as government purchases. 
D) excluded from GDP. 
A) classified as consumption expenditures. 
B) classified as investment expenditures. 
C) classified as government purchases. 
D) excluded from GDP.

Question 17

An economy produces 1,000,000 computers valued at $2,000 each. Households purchase 200,000 computers, of which 100,000 are imported. Businesses purchase 300,000 domestically produced computers, the government purchases 300,000 domestically produced computers, and 100,000 domestically produced computers are sold abroad. At the end of the year, the computer manufacturers hold the unsold computers in inventory. What is the value of the investment component of GDP?

Accepted Answer

A) $0.6 billion 
B) $0.8 billion 
C) $0.9 billion 
D) $1.0 billion 
A) $0.6 billion 
B) $0.8 billion 
C) $0.9 billion 
D) $1.0 billion

Question 18

The four categories of final users of GDP are:

Accepted Answer

A) businesses, firms, governments, and the foreign sector. 
B) households, the Federal Reserve, governments, and the foreign sector. 
C) businesses, corporations, firms, and farms. 
D) households, firms, governments, and the foreign sector. 
A) businesses, firms, governments, and the foreign sector. 
B) households, the Federal Reserve, governments, and the foreign sector. 
C) businesses, corporations, firms, and farms. 
D) households, firms, governments, and the foreign sector.

Question 19

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 employed in this economy?

Accepted Answer

A) 18 million 
B) 180 million 
C) 720 million 
D) 800 billion 
A) 18 million 
B) 180 million 
C) 720 million 
D) 800 billion

Question 20

A person 16 years or older who works part-time 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.

Exam 17: Measuring Economic Activity: GDP and Unemployment

Who from among the following would be classified as unemployed?

Intermediate goods and services are ________ production and ________ counted in GDP.

The labor force divided by the working age population equals the:

Which of the following activities is most likely to be counted in GDP?

If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?

A firm's revenue from selling its product minus the cost of inputs purchased from other firms is called:

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

If an economy produces 3 million oranges that sell for $0.25 each and 100,000 cars that sell for $25,000 each, then when the market value of total output is calculated:

Goods and services that are consumed by the ultimate user are called ________ goods and services.

The total market value of production in an economy must equal total:

Involuntary part-time workers are:

The sum of the value added by all firms equals total:

Who from among the following would be counted as unemployed?

Spending on durable goods, nondurable goods, and services is included in:

Changes in business inventories are:

The four categories of final users of GDP are:

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 employed in this economy?

A person 16 years or older who works part-time is officially classified as:

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

Intermediate goods and services are production and counted in GDP.