Question 1

Three equivalent ways to measure GDP are total ________, total ________, and total ________.

Accepted Answer

A) profits; production; saving 
B) production; income; expenditure 
C) investment; consumption; saving 
D) expenditure; income; profits 
A) profits; production; saving 
B) production; income; expenditure 
C) investment; consumption; saving 
D) expenditure; income; profits

Question 2

Data for an economy show that the unemployment rate is 6 percent, the participation rate 60 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) 30 million 
B) 188 million 
C) 282 million 
D) 300 million 
A) 30 million 
B) 188 million 
C) 282 million 
D) 300 million

Question 3

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2015 was ________ and in 2016 was ________.

Accepted Answer

A) $80,000; $88,000 
B) $80,000; $90,000 
C) $80,000; $99,000 
D) $88,000; $90,000 
A) $80,000; $88,000 
B) $80,000; $90,000 
C) $80,000; $99,000 
D) $88,000; $90,000

Question 4

Using real GDP to compare the level of economic well-being in two countries may be misleading because the value of ________ contributes to economic well-being, but is excluded from real GDP.

Accepted Answer

A) capital goods 
B) services 
C) leisure 
D) formal education 
A) capital goods 
B) services 
C) leisure 
D) formal education

Question 5

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2016?

Accepted Answer

A) $21,000 
B) $21,700 
C) $24,000 
D) $24,800 
A) $21,000 
B) $21,700 
C) $24,000 
D) $24,800

Question 6

Comparisons of economic activity over time should be made using:

Accepted Answer

A) nominal GDP adjusted for unemployment. 
B) nominal GDP per capita. 
C) current-dollar GDP. 
D) real GDP. 
A) nominal GDP adjusted for unemployment. 
B) nominal GDP per capita. 
C) current-dollar GDP. 
D) real GDP.

Question 7

Data for an economy show that the unemployment rate is 6 percent, the participation rate 60 percent, and 200 million people 16 years or older are not in the labor force. How many people are unemployed this economy?

Accepted Answer

A) 12.0 million 
B) 18.0 million 
C) 28.8 million 
D) 43.2 million 
A) 12.0 million 
B) 18.0 million 
C) 28.8 million 
D) 43.2 million

Question 8

Goods and services that are used up in the production of other goods and services 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 9

Suppose that the total production of an economy consists of 4 oranges and 10 candy bars, each orange sells for $0.25, and each candy bar sells for $0.50. What is the market value of production in this economy?

Accepted Answer

A) $0.75 
B) $1.00 
C) $5.00 
D) $6.00 
A) $0.75 
B) $1.00 
C) $5.00 
D) $6.00

Question 10

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was ________ and to real GDP in 2015 was ________.

Accepted Answer

A) $80,000; $80,000 
B) $80,000; $88,000 
C) $80,000; $99,000 
D) $88,000; $90,000 
A) $80,000; $80,000 
B) $80,000; $88,000 
C) $80,000; $99,000 
D) $88,000; $90,000

Question 11

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 sum of the value added of all of the firms?

Accepted Answer

A) $3.00 
B) $4.00 
C) $6.50 
D) $7.00 
A) $3.00 
B) $4.00 
C) $6.50 
D) $7.00

Question 12

The duration of unemployment ________ during a recession.

Accepted Answer

A) increases 
B) decreases 
C) remains constant 
D) varies between 5 and 14 weeks 
A) increases 
B) decreases 
C) remains constant 
D) varies between 5 and 14 weeks

Question 13

Income lost by the unemployed is an example of the ________ cost of unemployment, while the additional spending to control crime is an example of the ________ cost of unemployment.

Accepted Answer

A) social; psychological 
B) economic; social 
C) economic; psychological 
D) psychological; economic 
A) social; psychological 
B) economic; social 
C) economic; psychological 
D) psychological; economic

Question 14

One shortcoming of real GDP as an indicator of society's social well-being is that it fails to take into account the:

Accepted Answer

A) growth in productivity. 
B) increase in the quantity of goods. 
C) non-market production. 
D) change in the price level. 
A) growth in productivity. 
B) increase in the quantity of goods. 
C) non-market production. 
D) change in the price level.

Question 15

Workers whose spells of unemployment are broken up by brief periods of employment or withdrawal from the labor force are referred to as ________ workers.

Accepted Answer

A) short-term unemployed 
B) discouraged 
C) long-term unemployed 
D) chronically unemployed 
A) short-term unemployed 
B) discouraged 
C) long-term unemployed 
D) chronically unemployed

Question 16

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

Accepted Answer

A) You buy a new house. 
B) You buy a pizza. 
C) You buy 1,000 shares of stock. 
D) You buy a used book about economics. 
A) You buy a new house. 
B) You buy a pizza. 
C) You buy 1,000 shares of stock. 
D) You buy a used book about economics.

Question 17

The market value of final goods and services produced within a country during a period of time is called:

Accepted Answer

A) guaranteed direct prices. 
B) general domestic productivity. 
C) government documented production. 
D) gross domestic product. 
A) guaranteed direct prices. 
B) general domestic productivity. 
C) government documented production. 
D) gross domestic product.

Question 18

An economy produces only 1,000,000 computers valued at $2,000 each. Of these, 200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to the government, and 100,000 are sold abroad. No computers are imported. 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) $0.3 billion 
B) $0.4 billion 
C) $0.6 billion 
D) $0.8 billion 
A) $0.3 billion 
B) $0.4 billion 
C) $0.6 billion 
D) $0.8 billion

Question 19

Capital goods are

Accepted Answer

A) long-lived goods used for producing other goods and services. 
B) the end products of production. 
C) publicly provided. 
D) excluded from GDP. 
A) long-lived goods used for producing other goods and services. 
B) the end products of production. 
C) publicly provided. 
D) excluded from GDP.

Question 20

A measure of GDP in which quantities produced are valued at the prices of a fixed base year is called:

Accepted Answer

A) real GDP. 
B) nominal GDP. 
C) base GDP. 
D) current GDP. 
A) real GDP. 
B) nominal GDP. 
C) base GDP. 
D) current GDP.

Exam 17: Measuring Economic Activity: GDP and Unemployment

Three equivalent ways to measure GDP are total ________, total ________, and total ________.

Data for an economy show that the unemployment rate is 6 percent, the participation rate 60 percent, and 200 million people 16 years or older are not in the labor force. How many people are employed in this economy?

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2015 was ________ and in 2016 was ________.

Using real GDP to compare the level of economic well-being in two countries may be misleading because the value of ________ contributes to economic well-being, but is excluded from real GDP.

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2016?

Comparisons of economic activity over time should be made using:

Data for an economy show that the unemployment rate is 6 percent, the participation rate 60 percent, and 200 million people 16 years or older are not in the labor force. How many people are unemployed this economy?

Goods and services that are used up in the production of other goods and services are called ________ goods and services.

Suppose that the total production of an economy consists of 4 oranges and 10 candy bars, each orange sells for $0.25, and each candy bar sells for $0.50. What is the market value of production in this economy?

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was ________ and to real GDP in 2015 was ________.

The duration of unemployment ________ during a recession.

Income lost by the unemployed is an example of the ________ cost of unemployment, while the additional spending to control crime is an example of the ________ cost of unemployment.

One shortcoming of real GDP as an indicator of society's social well-being is that it fails to take into account the:

Workers whose spells of unemployment are broken up by brief periods of employment or withdrawal from the labor force are referred to as ________ workers.

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

The market value of final goods and services produced within a country during a period of time is called:

Capital goods are

A measure of GDP in which quantities produced are valued at the prices of a fixed base year is called:

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

Three equivalent ways to measure GDP are total , total , and total .

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2015 was and in 2016 was .

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was and to real GDP in 2015 was .

Income lost by the unemployed is an example of the cost of unemployment, while the additional spending to control crime is an example of the cost of unemployment.