The approximate rate of inflation in Year 3 is _____ percent.

• 1
• 5
• 20
• 10

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

• 7.5%.
• 10%.
• 67.5%.
• 4%.

You read in the newspaper that the CPI in 2008 was 120, you will conclude that a typical market basket in 2008 would have cost

• 120 percent more than the same market basket purchased in 2007.
• 20 percent more than the same market basket purchased in the base year.
• 20 percent less than the same market basket purchased in the base year.
• 20 percent more than the same market basket purchased in 2007.

Which one of the following transactions is included in a current year's GDP as investment spending?

• Anton purchased his friend's condo.
• Ronnie bought a new BMW.
• Melanie bought a new washing machine for her condominium.
• Maggie bought a play-gym set for her day-care business.

Suppose the real interest rate is 2.1% and the nominal interest rate is 5.4%. Then the expected inflation rate is:

• 3.3%.
• 2.1%.
• 7.5%.
• 3.3%.

When there is deflation in the economy:

• the general price level becomes negative.
• the nominal interest rate rises.
• the general price level increases.
• the general price level falls.

Double counting would occur if:

• imports were subtracted from GDP.
• used goods were included in the GDP calculation.
• inventories were added to the GDP calculation.
• GDP was calculated by adding together C, I, G, and NX.

If the labor force totals 100 million persons and 90 million are actively working, then the unemployment rate is ________.

• 1%
• 10%
• 11%
• 90%

Over the last year, Eli has been working very hard and his employer has taken notice by giving him a 6% raise in his salary. During this last year, overall prices in the economy have increased by 4%. Given this information, Eli's real wage has:

• stayed constant.
• decreased by 4%.
• increased by 10%.
• increased by 2%.

When consumers purchase imported products, this is:

• subtracted from GDP.
• double counting.
• not a part of the GDP calculation.
• considered domestic spending since it is spent by a domestic consumer.