Unit 2 Review (Macro 2.4, 2.5, Macro 3) Part 1

Which of the following is included in the calculation of GDP in the United States?

• government transfers

• used goods

• consumer savings

• work you do at home

• government spending

Investment spending includes spending on which of the following?

• stocks

• physical capital

• inputs

• services

• labor

A worker who is unemployed because of a recession is considered to be:

• frictionally unemployed

• structurally unemployed

• cyclically unemployed

• underemployed

• a discouraged worker

The unemployment rate that corresponds to LRAS, or the economy at full potential, is the

• frictional unemployment rate

• structural unemployment rate

• cyclical unemployment rate

• natural unemployment rate

• maximum unemployment rate

The real interest rate is equal to the nominal interest rate

• minus the inflation rate.

• plus the inflation rate.

• times the inflation rate.

• divided by the inflation rate.

• times one.

If inflation is higher than expected, which of the following is true? (CHOOSE ALL THAT APPLY)

• Real wages will be higher than nominal wages.

• Borrowers are better off.

• Lenders are better off.

• The real interest rate is higher than expected.

• The real interest rate is lower than expected.

Which of the following is an example of a negative supply shock?

• production costs decrease

• new technology leads to an increase in productivity

• world oil supplies are disrupted

• the stock market collapses

• the government budget is in deficit