AP Macro Unit 2

Which of these is NOT included in GDP?

• Consumption

• Investment

• Net Exports

• Stocks and Bonds

Government Purchases include transfer payments

• True

• False

1. Y = ?

• C + G + NX

• C + I + G +NX

• C + I + G

• I + G + NX

What does the Consumer Price Index (CPI) measure?

• Unemployment Rate

• 1. Inflation

• Cost of Living

• GDP

Which of these includes seasonal unemployment?

• Frictional Unemployment

• Structural Unemployment

• Natural Rate of Unemployment

• Cyclical Unemployment

How do you calculate the inflation rate?

• (Current CPI - Last Year’s CPI)/Last Year’s CPI

• (Last Year’s CPI - Current CPI)/Last Year’s CPI

• (Last Year’s CPI - Current CPI)/Current CPI

• (Current CPI - Last Year’s CPI)/Current CPI

How do you know if inflation occurs?

• If CPI decreases

• If CPI increases

Which of these is NOT a problem with CPI?

• Unmeasured Quality Change

• Introduction of New Goods

• Substitution Bias

• Inflation

Which of these is corrected for inflation?

• Nominal GDP

• 1. Real GDP

1. Households supply which of the following to firms in the circular flow model?

• 1. Goods and Services

• 1. Factors of Production