Unemployment and GDP Quiz

Ned is a typewriter repairman. As typewriters are being replaced by computers Ned finds less and less work. What kind of unemployment is Ned experiencing?

• Cyclical

• Frictional

• Seasonal

• Structural

Sean has lost his job at the New York Stock exchange because the country has fallen into a deep recession. What kind of unemployment is Sean experiencing?

• Cyclical unemployment

• Seasonal unemployment

• Structural unemployment

• Temporary unemployment

The unemployment rate affects the economy by influencing

• industrial growth

• consumer spending

• federal regulations

• international trade

Which of the following is NOT included in the Labor Force?

• A mom who stays at home to take care of her kids.

• A recent college graduate who is looking for a job.

• A 20 year old full time nanny

• A man employed for an insurance company full time.

Why are intermediate goods excluded when calculating GDP using the expenditure model?

• because they are imports

• because they are of inferior quality

• because they are used to make final goods

• because they were made in a previous year

Which phrase BEST explains the difference between nominal and real Gross Domestic Product (GDP)?

• Real GDP is adjusted for inflation.

• Nominal GDP measures the total output of a country.

• Real GDP measures the level of wealth of a geographic area.

• Nominal GDP is adjusted using the production possibility curve.

What is the difference between consumer spending and investment?

• Consumer spending is associated with intermediate goods, while investment is associated with final goods.

• Consumer spending is associated with budget deficits, while investment is associated with budget surpluses.

• Consumer spending is associated with Gross Domestic Product (GDP), while investment is associated with the stock market.

• Consumer spending is associated with household spending on final goods and services, while investment is associated with capital goods, new inventory, and new real estate.

The Consumer Price Index (CPI) measures

• The amount of consumer confidence within the economy.

• The average prices of a few consumer goods and services in the market basket.

• The average of the prices paid by urban consumers for a fixed market basket of goods and services.

• The average of the costs paid by businesses to produce a fixed market basket of consumer goods and services.

How is the standard of living affected when inflation occurs rapidly?

• The standard of living declines because wages fail to keep up with rising prices.

• The standard of living improves because the value of currency rapidly increases.

• The standard of living declines because the rising deficit results in higher tax rates.

• The standard of living improves because rising returns on investments increase wealth.

Joshua is retired. He lives on a fixed pension. His daughter Sue just bought a house. She has fixed rate of interest on her mortgage. How would Joshua and Sue be affected by unanticipated inflation in regards to Joshua's pension and Sue's mortgage?

• Joshua and Sue would both lose from unanticipated inflation.

• Joshua and Sue would both benefit from unanticipated inflation.

• Joshua would benefit, and Sue would lose from unanticipated inflation.

• Joshua would lose, and Sue would benefit from unanticipated inflation.