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Macroeconomics Week 3 Quiz Review
Test Description: This should help prepare you for the Week 3 in-class quiz.
Instructions: Answer all questions to get your test result.
1) GDP is the total market value of:
A
All intermediate goods and services produced in an economy in a given year.
B
All expenditures on natural resources, labor, and capital goods in an economy in a given year.
C
All expenditures on consumption, investment, and net exports in an economy in a given year.
D
All final goods and services produced in an economy in a given year.
2) To avoid multiple counting in national income accounts, only:
A
Both final and intermediate goods and services should be counted.
B
Intermediate goods and services should be counted.
C
Final goods and services should be counted.
D
Primary, intermediate, and final goods and services should be counted.
3) The largest component of GDP is:
A
Net foreign factor income earned in the United States
B
Government purchases
C
Personal consumption expenditures
D
Gross private domestic investment
4) GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,410 billion. Net exports are:
A
-$47 billion
B
+$53 billion
C
-$161 billion
D
-$84 billion
5) Gordon James is a person who sells narcotics on the street. This type of illegal activity:
A
Is excluded from GDP figures
B
Causes GDP to be overstated
C
Would be considered double counting in calculating GDP
D
Is estimated and included in GDP figures
6) Money spent on the purchase of a new house is included in the GDP as a part of:
A
The consumption of private fixed capital
B
Personal consumption expenditures
C
Personal saving
D
Investment
7) If the secular trend of labor productivity is 3 percent per year, the number of years that it will take for the standard of living to double will be about:
A
17 Years
B
15 Years
C
23 Years
D
20 Years
8) A statement that is often used to describe demand-pull inflation is:
A
There is no such thing as a free lunch
B
Too much money chasing too few goods
C
A rising tide lifts all boats
D
Money is easily earned, but not easily saved
9) Inflation caused by an increase in aggregate spending is referred to as:
A
Cost-push inflation
B
Demand-pull inflation
C
Demand-push inflation
D
Hyperinflation
10) The natural rate of unemployment:
A
Means that the economy will always operate at its natural rate
B
Is a fixed unemployment rate that does not change over time
C
Is equal to the total of frictional and structural unemployment
D
Means that the economy will always realize its potential output
11) Search and wait unemployment is another way to describe:
A
Cyclical unemployment
B
Structural unemployment
C
Noncyclical unemployment
D
Frictional unemployment
12) A worker who loses a job at a call center because business firms switch the call center to another country is an example of:
A
Frictional Unemployment
B
Cyclical Unemployment
C
Structural Unemployment
D
Disguised Unemployment
13) In calculating the unemployment rate, discouraged workers who are not actively seeking employment are:
A
Are included in the labor force
B
Excluded
C
Treated the same as part-time workers
D
Included
14) In the expansion phase of a business cycle:
A
Employment and output increase
B
The inflation rate decreases, but productive capacity increases
C
Employment increases, but output decreases
D
The inflation rate and productive capacity decrease
15) A recession is defined as:
A
A fall in the natural rate of unemployment
B
A fall in real GDP that lasts six months or longer
C
The minimum point in the business cycle before the recovery phase
D
A rise in the natural rate of unemployment
16) The recurrent ups and downs in the level of economic activity extending over several years are a description of:
A
A business trough
B
A noncyclical fluctuation
C
A recession
D
A business cycle
*select an answer for all questions
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