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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 expenditures on natural resources, labor, and capital goods in an economy in a given year.
B
All expenditures on consumption, investment, and net exports in an economy in a given year.
C
All final goods and services produced in an economy in a given year.
D
All intermediate goods and services produced in an economy in a given year.
2) To avoid multiple counting in national income accounts, only:
A
Primary, intermediate, and final goods and services should be counted.
B
Final goods and services should be counted.
C
Intermediate goods and services should be counted.
D
Both final and intermediate goods and services should be counted.
3) The largest component of GDP is:
A
Government purchases
B
Personal consumption expenditures
C
Net foreign factor income earned in the United States
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
-$84 billion
D
-$161 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
Would be considered double counting in calculating GDP
C
Causes GDP to be overstated
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
Personal consumption expenditures
B
Investment
C
The consumption of private fixed capital
D
Personal saving
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
23 Years
B
15 Years
C
17 Years
D
20 Years
8) A statement that is often used to describe demand-pull inflation is:
A
Too much money chasing too few goods
B
There is no such thing as a free lunch
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
Hyperinflation
C
Demand-push inflation
D
Demand-pull inflation
10) The natural rate of unemployment:
A
Means that the economy will always operate at its natural rate
B
Is equal to the total of frictional and structural unemployment
C
Means that the economy will always realize its potential output
D
Is a fixed unemployment rate that does not change over time
11) Search and wait unemployment is another way to describe:
A
Noncyclical unemployment
B
Cyclical unemployment
C
Frictional unemployment
D
Structural 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
Excluded
B
Treated the same as part-time workers
C
Included
D
Are included in the labor force
14) In the expansion phase of a business cycle:
A
The inflation rate and productive capacity decrease
B
The inflation rate decreases, but productive capacity increases
C
Employment and output increase
D
Employment increases, but output decreases
15) A recession is defined as:
A
The minimum point in the business cycle before the recovery phase
B
A fall in real GDP that lasts six months or longer
C
A fall in the natural rate of unemployment
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 recession
B
A noncyclical fluctuation
C
A business trough
D
A business cycle
*select an answer for all questions
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