Macroeconomics Week 3 Quiz Review Question Preview (ID: 28761)
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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 intermediate goods and services produced in an economy in a given year.
d) All final goods and services produced in an economy in a given year.
To avoid multiple counting in national income accounts, only:
a) Final goods and services should be counted.
b) Intermediate goods and services should be counted.
c) Both final and intermediate goods and services should be counted.
d) Primary, intermediate, and final goods and services should be counted.
The largest component of GDP is:
a) Government purchases
b) Personal consumption expenditures
c) Gross private domestic investment
d) Net foreign factor income earned in the United States
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) +$53 billion
b) -$47 billion
c) -$84 billion
d) -$161 billion
Gordon James is a person who sells narcotics on the street. This type of illegal activity:
a) Would be considered double counting in calculating GDP
b) Is estimated and included in GDP figures
c) Is excluded from GDP figures
d) Causes GDP to be overstated
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
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) 15 Years
b) 17 Years
c) 20 Years
d) 23 Years
A statement that is often used to describe demand-pull inflation is:
a) A rising tide lifts all boats
b) Money is easily earned, but not easily saved
c) Too much money chasing too few goods
d) There is no such thing as a free lunch
Inflation caused by an increase in aggregate spending is referred to as:
a) Cost-push inflation
b) Demand-push inflation
c) Demand-pull inflation
d) Hyperinflation
The natural rate of unemployment:
a) Is equal to the total of frictional and structural unemployment
b) Means that the economy will always operate at its natural rate
c) Means that the economy will always realize its potential output
d) Is a fixed unemployment rate that does not change over time
Search and wait unemployment is another way to describe:
a) Noncyclical unemployment
b) Cyclical unemployment
c) Structural unemployment
d) Frictional unemployment
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) Structural Unemployment
c) Cyclical Unemployment
d) Disguised Unemployment
In calculating the unemployment rate, discouraged workers who are not actively seeking employment are:
a) Excluded
b) Included
c) Treated the same as part-time workers
d) Are included in the labor force
In the expansion phase of a business cycle:
a) The inflation rate decreases, but productive capacity increases
b) The inflation rate and productive capacity decrease
c) Employment increases, but output decreases
d) Employment and output increase
A recession is defined as:
a) A fall in the natural rate of unemployment
b) A rise in the natural rate of unemployment
c) A fall in real GDP that lasts six months or longer
d) The minimum point in the business cycle before the recovery phase
The recurrent ups and downs in the level of economic activity extending over several years are a description of:
a) A recession
b) A business cycle
c) A business trough
d) A noncyclical fluctuation
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