Economic Indicators Quiz

Which one of the following is an example of consumption spending that would be counted toward GDP this year?

• Samantha bought an oven for her cooking show on Food Network.

• Stephanie bought a laptop for her brother.

• Mr. Smith spent $1500 to buy a used car for his son.

• Elis invested $2000 in a mutual fund through his employer.

• Jim purchased 200 shares of Google stock.

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:

• 4%

• 7.5%

• 10%

• 67.5%

• 30%

Underground activity:

• includes illegal activity.

• includes activity not reported in order to evade taxes.

• is sizable for many countries.

• all of the above.

Products that would be used in calculating GDP include:

• toys manufactured in China at a factory owned by a US company

• cars manufactured in Tennessee at a factory owned by a Japanese automobile company

• plastic manufactured in a factory in Kentucky and sold to toy manufacturers around the world to make plastic toys.

• cotton cloth manufactured in India and sold to clothes makers in the United States

If wages grew at a 3% rate this year and average prices grew off this year compared with last year.

• 3%; better

• faster than 3%; better

• slower than 3%; better

• faster than 10%; better

• slower than 3%; worse

Which statement about the period from 1918 through 1929 is most clearly supported by information in the graph?

• The percentage of income controlled by the wealthiest Americans declined.

• The income gap between the wealthiest fifth and the rest of the population increased.

• The overall per capita income in the United States declined.

• The percentage of income controlled by the poor steadily increased.

Which is the best indicator that an economy is entering the contraction phase of the business cycle?

• Reduction in the average work week

• Increase of inventory in the new home market

• Decrease in business inventory

• Reduced time needed for business deliveries

During the business cycle, an economic expansion occurs:

• At the peak of the business cycle.

• At the trough of a business cycle.

• In between the peak and trough.

• In between the trough and peak.

If Megan can sew 5 pants an hour and Brian can sew 2 pants per hour.

Who has the ABSOLUTE ADVANTAGE in pant production?

• Megan

• Brian

If Megan can bake 2 cupcakes an hour and Brian can bake 5,

Who has the ABSOLUTE ADVATAGE in cupcake production?

• Megan

• Brian