Question 1

The following provides data for an economy in a certain year.  
  Given the data, compute the investment component of GDP.

Accepted Answer

A) $300 
B) $400 
C) $800 
D) $900 
A) $300 
B) $400 
C) $800 
D) $900

Question 2

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 value added of Citrus Growers Inc.?

Accepted Answer

A) $0.00 
B) $0.50 
C) $0.75 
D) $1.75 
A) $0.00 
B) $0.50 
C) $0.75 
D) $1.75

Question 3

The following provides data for an economy in a certain year.  
  Given the data, compute the government purchases component of GDP.

Accepted Answer

A) $200 
B) $500 
C) $700 
D) $900 
A) $200 
B) $500 
C) $700 
D) $900

Question 4

Who of the following would be considered a discouraged worker?

Accepted Answer

A) Ray wants to work forty hours per week, but can only find work for twenty hours per week. 
B) Anna Marie has been looking for a job every day for the last month, but has not been hired. 
C) Frank would like to work, but has not looked for work because he believes no jobs are available. 
D) Melissa has a Ph.D. in physics, but is currently employed full time driving a taxi. 
A) Ray wants to work forty hours per week, but can only find work for twenty hours per week. 
B) Anna Marie has been looking for a job every day for the last month, but has not been hired. 
C) Frank would like to work, but has not looked for work because he believes no jobs are available. 
D) Melissa has a Ph.D. in physics, but is currently employed full time driving a taxi.

Question 5

Summing the value added of all firms yields the value of final goods and services produced because both measures:

Accepted Answer

A) exclude the value of capital goods. 
B) exclude the value of intermediate goods and services. 
C) use constant prices. 
D) are adjusted for population growth. 
A) exclude the value of capital goods. 
B) exclude the value of intermediate goods and services. 
C) use constant prices. 
D) are adjusted for population growth.

Question 6

The value of goods produced, but unsold, in the current period is:

Accepted Answer

A) excluded from GDP. 
B) counted in GDP as inventory investment. 
C) counted in GDP as consumption spending. 
D) allocated to GDP in future periods when the goods are sold. 
A) excluded from GDP. 
B) counted in GDP as inventory investment. 
C) counted in GDP as consumption spending. 
D) allocated to GDP in future periods when the goods are sold.

Question 7

Each person who is 16 years or older is considered to be in one of the following categories:

Accepted Answer

A) employed, unemployed, or discouraged worker. 
B) part-time worker, full-time worker, or unemployed. 
C) part-time worker, full-time worker, or out of the labor force. 
D) employed, unemployed, or out of the labor force. 
A) employed, unemployed, or discouraged worker. 
B) part-time worker, full-time worker, or unemployed. 
C) part-time worker, full-time worker, or out of the labor force. 
D) employed, unemployed, or out of the labor force.

Question 8

Real GDP is measured in ________ prices; nominal GDP is measured in ________ prices.

Accepted Answer

A) current; base year 
B) base year; current 
C) current; current 
D) base year; base year 
A) current; base year 
B) base year; current 
C) current; current 
D) base year; base year

Question 9

Who from among the following is counted as employed?

Accepted Answer

A) Ray wants to work forty hours per week, but can only find work for twenty hours per week. 
B) Anna Marie spends all of her time taking care of her children at home. 
C) Frank would like to work, but has not looked for work because he believes no jobs are available. 
D) Martin has been offered several jobs in the past four weeks, but has chosen not to accept any of the offers. 
A) Ray wants to work forty hours per week, but can only find work for twenty hours per week. 
B) Anna Marie spends all of her time taking care of her children at home. 
C) Frank would like to work, but has not looked for work because he believes no jobs are available. 
D) Martin has been offered several jobs in the past four weeks, but has chosen not to accept any of the offers.

Question 10

The total income of capital and labor must equal the value of total:

Accepted Answer

A) production. 
B) profits. 
C) revenue. 
D) investment. 
A) production. 
B) profits. 
C) revenue. 
D) investment.

Question 11

A cost of unemployment typically borne by society at large rather than the unemployed themselves is:

Accepted Answer

A) feelings of loss of control over one's life. 
B) lost tax revenue. 
C) lost self-esteem. 
D) lost income. 
A) feelings of loss of control over one's life. 
B) lost tax revenue. 
C) lost self-esteem. 
D) lost income.

Question 12

The largest expenditure component of U.S. GDP is:

Accepted Answer

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

Question 13

Wages and salaries are examples of:

Accepted Answer

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

Question 14

Although GDP is not the same as economic well-being, high levels of GDP are positively correlated with all of the following except:

Accepted Answer

A) longer life expectancies. 
B) higher rates of literacy. 
C) higher material standards of living. 
D) higher rates of infant mortality. 
A) longer life expectancies. 
B) higher rates of literacy. 
C) higher material standards of living. 
D) higher rates of infant mortality.

Question 15

In 2018, Janice Quinn sells a five-year-old car to Used Car, Inc. for $4,000. In the same year, Used Car, Inc. resells the car to Hilda Goner for $4,750. What is the contribution of these transactions to GDP in the year 2015?

Accepted Answer

A) $0 
B) $750 
C) $4,000 
D) $8,750 
A) $0 
B) $750 
C) $4,000 
D) $8,750

Question 16

Despite some problems with equating GDP with economic well-being, higher real GDP per person does imply greater economic well-being because it tends to be positively associated with:

Accepted Answer

A) crime, pollution, and economic inequality. 
B) better education, health and life expectancy. 
C) poverty, depletion of nonrenewable resources, and congestion. 
D) unemployment, availability of goods and services, and better education. 
A) crime, pollution, and economic inequality. 
B) better education, health and life expectancy. 
C) poverty, depletion of nonrenewable resources, and congestion. 
D) unemployment, availability of goods and services, and better education.

Question 17

GDP can be measured as each of the following except:

Accepted Answer

A) the market value of production. 
B) total expenditure on final goods and services. 
C) incomes of capital and labor. 
D) total business revenues. 
A) the market value of production. 
B) total expenditure on final goods and services. 
C) incomes of capital and labor. 
D) total business revenues.

Question 18

The labor force equals the number of people:

Accepted Answer

A) employed. 
B) aged 16 years and older. 
C) both employed and unemployed. 
D) employed, unemployed and discouraged. 
A) employed. 
B) aged 16 years and older. 
C) both employed and unemployed. 
D) employed, unemployed and discouraged.

Question 19

An "unemployment spell" is a period during which:

Accepted Answer

A) the unemployment rate is less than 10 percent. 
B) the unemployment rate exceeds 15 percent. 
C) an unemployed individual leaves the labor force and then returns. 
D) an individual is continuously unemployed. 
A) the unemployment rate is less than 10 percent. 
B) the unemployment rate exceeds 15 percent. 
C) an unemployed individual leaves the labor force and then returns. 
D) an individual is continuously unemployed.

Question 20

Factories and machines are examples of:

Accepted Answer

A) consumption goods. 
B) non-market goods. 
C) value-added goods. 
D) capital goods. 
A) consumption goods. 
B) non-market goods. 
C) value-added goods. 
D) capital goods.

Exam 17: Measuring Economic Activity: GDP and Unemployment

The following provides data for an economy in a certain year. Given the data, compute the investment component of GDP.

The following provides data for an economy in a certain year. Given the data, compute the government purchases component of GDP.

Who of the following would be considered a discouraged worker?

Summing the value added of all firms yields the value of final goods and services produced because both measures:

The value of goods produced, but unsold, in the current period is:

Each person who is 16 years or older is considered to be in one of the following categories:

Real GDP is measured in ________ prices; nominal GDP is measured in ________ prices.

Who from among the following is counted as employed?

The total income of capital and labor must equal the value of total:

A cost of unemployment typically borne by society at large rather than the unemployed themselves is:

The largest expenditure component of U.S. GDP is:

Wages and salaries are examples of:

Although GDP is not the same as economic well-being, high levels of GDP are positively correlated with all of the following except:

In 2018, Janice Quinn sells a five-year-old car to Used Car, Inc. for $4,000. In the same year, Used Car, Inc. resells the car to Hilda Goner for $4,750. What is the contribution of these transactions to GDP in the year 2015?

Despite some problems with equating GDP with economic well-being, higher real GDP per person does imply greater economic well-being because it tends to be positively associated with:

GDP can be measured as each of the following except:

The labor force equals the number of people:

An "unemployment spell" is a period during which:

Factories and machines are examples of:

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

Real GDP is measured in prices; nominal GDP is measured in prices.