Macroeconomics Practice Test

Which component of GPA would the following be classified as: Southwire purshasing new software for its computer system.

• Consumption

• Investment

• Government Purchases

• Not included

Jennifer receives a 2 percent increase in wages this year. The inflation rate is 4 percent. Which of the following is most likely to happen to Jennifer's financial situation?

• She will have more income to spend and greater purchasing power

• She will have more income to spend and less purchasing power

• Her cost of living and her purchasing power will decrease

• Her cost of living and her purchasing power will increase

The best example of structural unemployment in an economy is someone...

• between jobs

• out of work due to a change in the business cycle

• out of work due to a seasonal change

• whose job skills do not match the economy's needs

GDP stands for...

• Great Domestic Product

• Gross Domestic Product

• Grown Domestic Product

• None of the above

GDP only counts final goods....

• To avoid counting the value of intermediate goods twice.

• Because those are the only kind of goods than an economy actually produces.

• Because these are the only goods that have a market price.

• Because these are the only goods that a country actually consumes.

A recession ends at which phase of the business cycle?

• contraction

• peak

• expansion

• trough

The Gross Domestic product is...

• The total value of all final goods and services produced in an economy in a year.

• The dollar measure of a nation’s production.

• The sum of all national incomes except personal savings

• The sum of a nation’s total consumption expenditures plus savings.

The most important job of the Federal reserve system is to...

• control stock market buying

• serve as a clearinghouse for checking

• print money

• control the size of the money supply

If someone is let go from their job due to a recession, what type of unemployment are we experiencing?

• Structural

• Frictional

• Seasonal

• Cyclical

If a women married her automobile mechanic and did not employ a new mechanic to maintain her car, what would happen to GDP?

• remain the same

• increase

• decrease

• transfer payments would increase