Gross Domestic Product (GDP), Part 1
The purchase of a new automobile is included in
A. consumption expenditures on services.
B. consumption expenditures on durable goods.
C. consumption expenditures on nondurable goods.
B. consumption expenditure on durable goods.
The measure of production that values production using current prices is called:
A. real GDP.
B. nominal GDP.
C. underground GDP.
B. nominal GDP.
Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as
A. unemployed.
B. not in the working-age population.
C. not in the labor force.
C. not in the labor force.
Cyclical unemployment is the result of:
A. a slowdown or recession in the economy.
B. a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.
C. the search process of matching workers with jobs.
A. a slowdown or recession in the economy.
________ are financial securities that represent partial ownership of a firm.
Select one:
A. Stocks
B. Certificates of Deposit (CDs)
C. Bonds
A. Stocks
During the expansion phase of the business cycle
A. employment decreases.
B. production increases.
C. income decreases.
B. production increases.
To calculate GDP by the expenditure method, one must add
Select one:
A. consumption spending, investment spending, government spending, and net exports.
B. wages, rents, interest, and profits.
C. consumption spending, investment spending, government spending, and exports.
A. consumption spending, investment spending, government spending, and net exports.
An example of business fixed investment spending is
A. $200 million of unsold cars at a car dealership.
B. a purchase of a computer to be utilized by an accounting firm.
C. a purchase of a home by a household.
B. a purchase of a computer to be utilized by an accounting firm.
The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill.
A. employed
B. out of the labor force
C. unemployed
A. employed
A student who just graduated from college but has not found a job would most likely be
Select one:
A. cyclically unemployed.
B. structurally unemployed.
C. frictionally unemployed.
C. frictionally unemployed.
________ is the ease with which a financial security can be exchanged for money.
A. The face value
B. Liquidity
C. Risk
B. Liquidity
The period between a business cycle peak and a business cycle trough is called
A. recession.
B. expansion.
C. diffusion.
A. recession.
The purchase of a new house is included in
A. consumption expenditures.
B. government purchases.
C. investment expenditures.
C. investment expenditures.
Which of the following expenditures represent the greatest contribution to the United States GDP?
A. Net exports
B. Investments
C. Consumption
C. Consumption
The labor force equals the number of people
A. unemployed.
B. employed.
C. employed plus unemployed.
The percent increase in the CPI from one year to the next is a measure of the
Select one:
A. inflation rate.
B. real interest rate.
C. GDP deflator.
A. inflation rate.
Which of the following is *NOT one of the key services provided by the financial system?
A. decreasing taxes
B. liquidity
C. generating information
The period of expansion ends with a ________ and the period of recession ends with a ________.
Select one:
A. business cycle peak; business cycle trough
B. business cycle trough; business cycle peak
C. business cycle peak; business cycle peak
A. business cycle peak; business cycle trough
The "underground economy" is also referred to as
A. the halfway economy.
B. the formal sector.
C. the informal sector.
C. the informal sector.
Which of the following expenditures represent the smallest contribution to the United States GDP?
A. Net exports
B. Investments
C. Consumption
A. Net exports
Total population 20,000
Working-age population 15,000
Employment 1,000
Unemployment 100
What is the unemployment rate?
A. (100/1,100) x 100.
B. (100/20,000) × 100.
C. (100/1,000) × 100.
A. (100/1,100) x 100.
The consumer price index is the:
A. average of the prices of new final goods and services produced in the economy over a period of time.
B. cost of a market basket of goods and services typically produced in the current period.
C. average of the prices of the goods and services purchased and consumed by a typical urban family of four.
C. average of the prices of the goods and services purchased and consumed by a typical urban family of four.
In a closed economy, which of the following components of GDP is not included?
A. net exports
B. investment
C. government spending
A. net exports
During a recession, spending on ________ tends to fall more dramatically than spending on ________.
Select one:
A. services; durable goods
B. nondurable goods; durable goods
C. durable goods; nondurable goods
C. durable goods; nondurable goods
If nominal GDP is $5 trillion and real GDP is $4 trillion, the GDP deflator is
A. 125.
B. 80.
C. 12.5.
A. 125.
Which of the following transactions would take place in the "underground economy"?
A. Tom bought an iPad for $499 but decided to sell it on eBay instead of keeping it for $600.
B. Elizabeth tells her mother she's going to work but really goes to see a movie.
C. John makes chain-link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes.
C. John makes chain-link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes.
Total population 20,000
Working-age population 15,000
Employment 1,000
Unemployment 100
What is the labor force participation rate?
A. (1,000/15,000) × 100.
B. (1,100/15,000) × 100.
C. (1,000/1,100) × 100.
B. (1,100/15,000) × 100.
The stated interest rate on a loan is the
A. expected inflation rate.
B. nominal interest rate.
C. real interest rate.
B. nominal interest rate.
Purchases of which of the following goods would be dramatically reduced during a recession?
A. refrigerators
B. tomatoes
C. winter coats
A. refrigerators
________ are financial securities that represent promises to repay a fixed amount of funds.
Select one:
A. Stocks
B. Dividends
C. Bonds
C. Bonds