What was the growth rate of real GDP for 1930?

−8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.

−8.62%. Nominal GDP is a better gauge of economic well-being than real GDP.

−9.43%. Real GDP is a better gauge of economic well-being than nominal GDP.

−9.43%. Nominal GDP is a better gauge of economic well-being than real GDP.

If an economy's GDP falls, then it must be the case that the economy's

income and expenditure both fall.

income falls and expenditure rises.

Changes in real GDP reflect

only changes in the amounts being produced.

both changes in prices and changes in the amounts being produced.

neither changes in prices nor changes in the amounts being produced.

Because every transaction has a buyer and a seller,

every transaction contributes equally to an economy's income and to its expenditure.

GDP is more closely associated with an economy's income than it is with an economy's expenditure.

the number of firms must be equal to the number of households in a simple circular-flow diagram.

firms' profits are necessarily zero in a simple circular-flow diagram.

In the actual economy, households

divide their income among spending, taxes, and saving.

buy all goods and services produced in the economy.

According to the circular-flow diagram, GDP can be computed as

either the revenue firms receive from the sales of goods and services or the payments they make to factors of production.

the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production.

payments firms make to factors of production but not as revenues they receive from the sales of goods and services.

neither the revenue firms receive nor the payments they make to factors of production.

The value of goods added to a firm's inventory in a certain year is treated as

investment, since GDP aims to measure the value of the economy's production that year.

consumption, since the goods will be sold to consumers in another period.

intermediate goods, and so is not included in that year's GDP.

spending on durable goods, since the goods could not be inventoried unless they were durable.

The steps involved in calculating the consumer price index and the inflation rate, in order, are as follows:

Fix the basket, find the prices, compute the basket's cost, choose a base year and compute the index, and compute the inflation rate.

Choose a base year, update the basket, find the prices, estimate the basket's cost, compute the index, and compute the inflation rate.

Choose a base year, fix the basket, find the prices, compute the inflation rate, compute the basket's cost, and compute the index.

Fix the basket, find the prices, compute the inflation rate, compute the basket's cost, and choose a base year and compute the index.

Consider a small economy in which consumers buy only two goods: pretzels and cookies. In order to compute the consumer price index for this economy for two or more consecutive years, we assume that

neither the number of pretzels nor the number of cookies bought by the typical consumer changes from year to year.

the percentage change in the price of pretzels is equal to the percentage change in the price of cookies from year to year.

the number of pretzels bought by the typical consumer is equal to the number of cookies bought by the typical consumer in each year.

neither the price of pretzels nor the price of cookies changes from year to year.

If the consumer price index was 93 in Year 1, 97 in Year 2, and 100 in Year 3, then the base year must be

the base year cannot be determined from the given information.

The CPI is more commonly used as a gauge of inflation than the GDP deflator is because the

CPI better reflects the goods and services bought by consumers.

CPI includes more goods and services that the GDP deflator does.

GDP deflator cannot be used to gauge inflation.

If the nominal interest rate was 8 percent in Year 2, then

the real interest rate in Year 2 was 4 percent.

the real interest rate in Year 2 was 12 percent.

Will's Year 1 food expenditures in Year 2 dollars amount to $5,800.

Will's Year 1 food expenditures in Year 3 dollars amount to $6,200.

Two common measures of the overall level of prices are

the GDP deflator and the consumer price index.

the inflation rate and the consumer price index.

the inflation rate and the GDP deflator.

the cost of living index and nominal GDP.

The inflation rate was

negative in Year 2 and negative in Year 3.

positive in Year 2 and negative in Year 3.

negative in Year 2 and positive in Year 3.

positive in Year 2 and positive in Year 3.

When the consumer price index falls, the typical family

can spend fewer dollars to maintain the same standard of living.

has to spend more dollars to maintain the same standard of living.

can offset the effects of rising prices by saving more

finds that its standard of living is not affected.

The CPI and the GDP deflator

generally show different patterns of movement.

always show different patterns of movement.

If the price of Italian shoes imported into the United States increases, then

the consumer price index will increase, but the GDP deflator will not increase.

both the GDP deflator and the consumer price index will increase.

neither the GDP deflator nor the consumer price index will increase.

the GDP deflator will increase, but the consumer price index will not increase.

Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate?

The real interest rate is the nominal interest rate minus the rate of inflation.

The real interest rate is the nominal interest rate times the rate of inflation.

The real interest rate is the nominal interest rate plus the rate of inflation.

The real interest rate is the nominal interest rate divided by the rate of inflation.

In Belgium, Norway, and Sweden, the percentage of workers who belong to unions is

greater than it is in the United States.

less than it is in the United States.

about the same as it is in the United States.

Sam has no job but keeps applying to get a job with a business that is unionized. He is qualified and he finds the pay attractive, but the firm is not hiring. Sam is

structurally unemployed. Structural unemployment exists even in the long run.

structurally unemployed. Structural unemployment does not exist in the long run.

frictionally unemployed. Frictional unemployment exists even in the long run.

frictionally unemployed. Frictional unemployment does not exist in the long run.

The unemployment rate is computed as the number of unemployed

divided by the labor force, all times 100.

divided by the number of employed, all times 100.

divided by the adult population, all times 100.

times the labor-force participation rate, all times 100.

Which of the following is not a cause of the decline in the U.S. men's labor-force participation rate over the past several decades?

With more women employed, there are fewer jobs now available to men.

Young men now stay in school longer than their fathers and grandfathers did.

Older men now retire earlier and live longer.

More fathers now stay at home to raise their children.

Sasha is on temporary layoff. The Bureau of Labor Statistics counts Sasha as

unemployed and in the labor force.

unemployed and not in the labor force.

employed and in the labor force.

employed and not in the labor force.

The amount of unemployment varies

substantially over time and across countries.

little over time and across countries.

little over time but substantially across countries.

substantially over time but little across countries.

Of the following groups, who is eligible for unemployment insurance benefits?

The unemployed who were laid off because their previous employers no longer needed their skills

The unemployed who were fired for cause

The unemployed who just entered the labor force

Most spells of unemployment are

short, but most unemployment observed at any given time is long term.

long, and most unemployment observed at any given time is long term.

long, but most unemployment observed at any given time is short term.

short, and most unemployment observed at any given time is short term.

Suppose that the natural rate of unemployment is 5% for those under 55 and 3% for those 55 and older. The cyclical unemployment rate for those under 55 is

0.88%, which is less than the cyclical unemployment rate for those 55 and older.

0.88%, which is greater than the cyclical unemployment rate for those 55 and older.

−0.83%, which is greater than the cyclical unemployment rate for those 55 and older.

−0.83%, which is less than the cyclical unemployment rate for those 55 and older.

Which of the following is an example of an efficiency wage?

An above-equilibrium wage paid by a firm to reduce turnover costs

A higher wage paid to a more experienced worker

A below-equilibrium wage paid by a small business exempt from minimum-wage laws

A wage tied to participation in a government-sponsored job training program

If an unemployed person quits looking for work, then, eventually the unemployment rate

and the labor-force participation rate both decrease.

decreases, and the labor-force participation rate is unaffected.

is unaffected, and the labor-force participation rate decreases.

and the labor-force participation rate are both unaffected.

When a minimum-wage law forces the wage to remain above the equilibrium level, the result is

a surplus of labor and a shortage of jobs.

both a shortage of labor and a shortage of jobs.

a shortage of labor and a surplus of jobs.

both surplus of labor and a surplus of jobs.

Which of the following is not correct?

The unemployment rate occasionally falls to zero.

Most people who become unemployed will soon find jobs.

In an ideal labor market, wages would adjust to ensure that all workers are always fully employed.

There are always some workers without jobs, even when the overall economy is doing well.

the resources that owners have put into the bank.

the machinery, structures, and equipment of the bank.

Macroeconomics unit 2 test

Authored by Christian Funes

Financial Education

University

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60 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The following table contains data for Mindalion for the year 2019.
Gross national product for Mindalion in 2019 is

$198

$200

$202

$216

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Most goods and services produced at home

and most goods and services produced illegally are included in GDP.

are included in GDP while most goods and services produced illegally are excluded from GDP.

are excluded from GDP while most goods and services produced illegally are included in GDP

and most goods and services produced illegally are excluded from GDP.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If in some year nominal GDP was $20 billion and the GDP deflator was 80, what was real GDP?

$100.0 billion

$400.0 billion

$25.0 billion

$60.0 billion

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A statistical discrepancy

exists because data sources are not perfect, so measures of expenditures and income are not equal.

insures that GDP will approximately equal GNP.

explains the close association between GDP and quality of life measures such as literacy and life expectancy.

explains the inadequacy of GDP in capturing the value of leisure and the value of a clean environment.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the national income accounts, depreciation is called

"consumption of fixed capital."

"negative investment."

"diminished value."

"loss due to wear."

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When economists talk about growth in the economy, they measure that growth as the

absolute change in nominal GDP from one period to another.

percentage change in nominal GDP from one period to another.

absolute change in real GDP from one period to another.

percentage change in real GDP from one period to another.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was country Krugeveaux's GDP in 2019?

$1,991

$1,988

$3,676

$7,603

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Macroeconomics unit 2 test

The following table contains data for Mindalion for the year 2019.Gross national product for Mindalion in 2019 is​

Most goods and services produced at home

If in some year nominal GDP was $20 billion and the GDP deflator was 80, what was real GDP?

A statistical discrepancy

In the national income accounts, depreciation is called

When economists talk about growth in the economy, they measure that growth as the

What was country Krugeveaux's GDP in 2019?

What was the growth rate of real GDP for 1930?

If an economy's GDP falls, then it must be the case that the economy's

Changes in real GDP reflect

Access all questions and much more by creating a free account

Popular Resources on Wayground

Discover more resources for Financial Education

The following table contains data for Mindalion for the year 2019.
Gross national product for Mindalion in 2019 is