Million unemployed people leave the labor force.

Your monthly consumption of hamburgers

2. Which of the following is not a stock variable?

Inventory investment

3. GDP is

A flow.

4. GDP measures

All of the above.

5. Suppose that a farmer grows wheat and sells it to a baker for $1, the baker makes bread and sells it to a store for $2, and the store sells it to the customer for $3. This transaction increases GDP by

$3.

6. Which of the following is not included in GDP?

The value of automobile services enjoyed by car owners

7. In which case is total expenditure in an economy not equal to total income?

None of the above--they are always equal

8. All other things equal, GDP will rise if

Durable goods consumption rises.

9. Which of the following statements describes the difference between nominal and real GDP?

Real GDP is measured using constant base-year prices; nominal GDP is measured using current prices.

10. If production remains the same and all prices double, then real GDP
is constant and nominal GDP doubles.

11. Real GDP equals

Nominal GDP divided by the GDP deflator.

12. If production remains the same and all prices double relative to the base year, then the GDP deflator is

2.

13. Consider the following table:
APPLES/ ORANGES

If 1995 is the base year, what is the GDP deflator for 2000?

14. To obtain the net domestic product (NDP), start with GDP and subtract

Depreciation.

15. To obtain national income, start with GDP and subtract

Depreciation and indirect business taxes.

16. Approximately what percentage of national income consists of compensation of employees?

Percent

17. The consumer price index (CPI)

Measures the price of a fixed basket of goods and services.

18. Suppose that the typical consumer buys one apple and one orange every month. In the base year 1986, the price for each was $1. In 1996, the price of apples rises to $2, and the price of oranges remains at $1. Assuming that the CPI for 1986 is equal to 1, the CPI for 1996 would be equal to

3/2.

19. Consider the following table:

If 1995 is the base year, the CPI in 2000 is

2.

20. Which of the following statements about the CPI and the GDP deflator is true?

The weights given to prices are not the same.

21. All other things equal, if the price of foreign-made cars rises, then the GDP deflator

Will remain the same and the CPI will rise.

22. General Motors increases the price of a model car produced exclusively for export to Europe. Which U.S. price index is affected?

The GDP deflator

23. Which of the following events will cause the unemployment rate to increase?

An increase in the labor force with no change in the number of employed workers

24. An example of a person who is counted as unemployed is a

Senator who resigns her job to run for president.

25. Suppose that a factory worker turns 62 years old and retires from her job. Which statistic is not affected?

Number of unemployed

26. Suppose that the size of the labor force is 100 million and that the unemployment rate is 5 percent. Which of the following actions would reduce the unemployment rate the most?

million unemployed people leave the labor force.

27. Okun's law expresses a relationship between a change in

Date: 2015-12-11; view: 1084