Economics Quiz

What is GDP?

• GDP is the sum of the prices of all final goods and services produced by one country.

• GDP is the sum of the prices of all final goods and services produced within one country.

• GDP is the sum of the prices of all intermediate and final goods and services within one country.

• GDP allows economists to measure inflation.

Answer explanation

GDP is the sum of the prices of all final goods and services produced within one country, making the second answer choice the correct one.

Which of the following would be included in calculating GDP?

• Intermediate goods

• Stocks

• Social Security checks

• Unsold goods produced by a business

Answer explanation

Unsold goods produced by a business are included in calculating GDP as they represent the value of goods produced within a country's borders during a specific time period.

Jose just purchased new tires for his ten-year-old car. Is this purchase counted towards GDP?

• Yes

• No

Answer explanation

Yes, the purchase of new tires for Jose's car is counted towards GDP as it represents a final good or service produced within the country's borders.

Which of the following accounts for the biggest portion of GDP in the United States?

• Consumption

• Business Investment

• Government Spending

• Net Exports

Answer explanation

Consumption accounts for the biggest portion of GDP in the United States.

Which of the following helps economists better understand a nation’s standard of living?

• Net Exports

• GDP per capita

• Business Investment

• Nominal GDP

Answer explanation

GDP per capita helps economists better understand a nation's standard of living by providing a measure of the average income per person in the country.

What is the unemployment rate?

• The total population of a country divided by people who are employed (times 100).

• The number of people over 16 actively looking for work divided by the number of people in the labor force (times 100).

• The number of jobless people actively looking for work divided by the number of people in the labor force (times 100).

• The total population of a country divided by people who are unemployed (times 100).

Answer explanation

The number of jobless people actively looking for work divided by the number of people in the labor force (times 100).

Which of the following individuals would be considered part of the labor force?

• A homemaker with four children

• A retired individual volunteering at a local library

• A 15-year-old looking for their first job

• Someone working a few hours a week as a bartender

Answer explanation

The individual working a few hours a week as a bartender is considered part of the labor force as they are actively engaged in paid work.

Who among the following would be classified as unemployed?

• A former TV station employee who has had multiple job interviews

• A university teacher

• An employee at a major corporation

• An architect now teaching at a university

Answer explanation

The correct choice is a former TV station employee who has had multiple job interviews, as they are actively seeking employment and currently unemployed.

How would the Bureau of Labor Statistics categorize a marine serving in the military?

• Employed

• Unemployed

• Underemployed

• Not in the Labor Force

Answer explanation

The Bureau of Labor Statistics would categorize a marine serving in the military as 'Not in the Labor Force' because military personnel are not considered part of the civilian labor force.

If someone with a master's degree in education works at a local fabric store, how would they be classified by the Bureau of Labor Statistics?

• Employed

• Unemployed

• Underemployed

• Not in the Labor Force

Answer explanation

The individual with a master's degree in education working at a fabric store is classified as underemployed by the Bureau of Labor Statistics due to being overqualified for their current job.