AP Macroeconomics Unit 2 Question Preview (ID: 33184)


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The largest dollar amount of national income is
a) wages and salaries to employees
b) rental payments
c) profit
d) government expenditures on goods and services

Which of the following people would be considered unemployed?
a) A person who stayed at home to raise his kids and now starts looking for a job
b) A person who works two part-time jobs but is looking for a full-time job
c) A person who is qualified to teach but is driving a bus until a teaching job is available
d) A person who quits work to care for aging parents

Which of the following would be an example of an intermediate good or service?
a) Tuition paid by a student at a state university
b) A car purchased by a student’s parents and given to the student
c) Gasoline purchased by an insurance agent to visit clients at their homes
d) A calculator purchased by a college student for taking exams

Which of the following would be included in the calculation of gross domestic product?
a) Social Security payment to a retired military officer
b) Contributions to a charity organization
c) The purchase of a home built 10 years ago
d) Government purchase of a new submarine

Which of the following indicates that the macroeconomy is achieving its economic goals?
a) Unemployment
b) Inflation
c) Declining GDP
d) Economic Growth

Which of the following purchases is included in the calculation of gross domestic product?
a) a car produced in a foreign country
b) Government bonds issued by a foreign firm
c) New harvesting equipment on the farm
d) 1,000 shares of stock in a computer firm

The consumer price index (CPI) is criticized because
a) it recognizes consumers’ ability to substitute goods and services as prices change
b) it does not recognize consumers’ ability to substitute goods and services as prices change
c) it reflects the prices of both intermediate goods and final goods
d) it reflects the quality of goods produced

Which of the following could be counted as investment when calculating gross domestic product?
a) The construction of roads by the government
b) The profit earned when selling shares of stock
c) The purchase of a used computer by an auto manufacturer
d) The construction of a new house

When the actual inflation rates is greater than the anticipated inflation rate,which of the following is most likely to suffer?
a) Employers who hire workers with long-term labor contracts
b) Retired persons with cost-of-living adjustments in their benefits
c) Those who lend at a fixed interest rate
d) Those who lend with flexible interest rates

Which of the following will be counted as unemployed by the United States Bureau of Labor Statistics?
a) Persons who were fired from their previous jobs and are actively applying for work
b) Persons who quit their previous jobs to start their own businesses
c) Persons who were laid off from their previous jobs and have not applied for a job in two years
d) Persons who quit their previous jobs to stay at home to care for sick parents

Country A’s growth rate in per capita real gross domestic product (GDP) has been consistently higher than that of Country B. Which of the following factors can account for these differences in the per capita GDP growth rates?
a) Country B’s government gives more investment tax credits.
b) The labor force of Country A is becoming more skilled than the labor force of Country B.
c) The natural rate of unemployment is higher in Country A.
d) Country A’s central bank is less effective at controlling the inflation rate.

Which of the following is true if real GDP in Year 1 is $5,000 and in Year 2 is $5,200?
a) The economy is experiencing 4 percent inflation
b) The economy is experience a recession
c) Output has increased by 4 percent
d) Output has declined by 4 percent

Frictional unemployment occurs when which of the following happens?
a) A worker switches from working full-time to part-time.
b) A worker undergoes on-the-job training.
c) A worker is replaced by robots on factory assembly lines.
d) A worker voluntarily quits a job to search for a better one.

The natural rate of unemployment can be defined as the
a) unemployment rate consistent with accelerating inflation
b) labor force participation rate minus the unemployment rate
c) unemployment rate of the least-skilled workers
d) economy’s long-run equilibrium rate of unemployment

Nominal GDP is:
a) the inflation adjusted GDP.
b) the real GDP minus depreciation.
c) the current dollar GDP.
d) the constant dollar GDP.

Amy just graduated from college. She recently quit her part time job to focus on finding a full time job which uses her skills she has acquired in college better. Amy is considered:
a) out of the labor force.
b) cyclically unemployed.
c) employed since she is focusing on finding a full time job.
d) frictionally unemployed.

Which of the following represents the best scenario for a bank lending its money to a customer?
a) fixed interest rate of 8% with 1% inflation
b) fixed interest rate of 11% with 5% inflation
c) fixed interest rate of 12% with 7% inflation
d) fixed interest rate of 19% with 15% inflation

Cyclical unemployment is characterized as:
a) unemployment that occurs when people are between jobs.
b) a situation when there are not good matches between available jobs and the skills people have.
c) the normal unemployment around which the actual unemployment rate fluctuates.
d) the deviation in the actual rate of unemployment away from the natural rate.

Which of the following is true concerning interest rates?
a) The nominal interest rate can be negative.
b) The real interest rate cannot be negative.
c) The real interest rate can only be positive.
d) The real interest rate can be zero, positive, or negative.

An example of frictional unemployment is a(n):
a) autoworker who is temporarily laid off from an automobile company due to a decline in sales.
b) geologist who is permanently laid off from an oil company due to a new technological advance.
c) worker at a fast-food restaurant who quits work and attends college full time.
d) real estate agent who leaves a job in Texas and searches for a similar, higher paying job in California.

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