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WorksheetsMacro GDP, Unemployment, Monetary Review
Total questions: 50
Worksheet time: 17mins
Name
Class
Date
1.
If real GDP=$300 billion and the price index is 200. Nominal GDP is
a)
$30 billion
b)
$600 billion
c)
$300 billion
d)
$15 billion
2.
The value of the output of all goods and services produced within a country in a year.
a)
total ouput
b)
Gross Domestic Product
c)
national income
d)
net domestic product
3.
A shoe lace produced in 2013 and added to a shoe produced in 2014.
a)
Included in 2014 GDP
b)
Included in 2013 GDP
c)
Included in 2012 GDP
4.
A shoe produced in South Korea and sold in the U.S.
a)
Included in U.S. GDP
b)
Included in South Korea GDP
c)
Included in Canadian GDP
5.
In 2015, I personally painted a room in my house.
a)
Included in GDP
b)
Not included in GDP
6.
What year is the base year?
a)
2008
b)
2009
c)
2012
d)
2013
7.
If Real GDP is $300 million and the population is 10 million, what is the Real GDP per capita?
a)
$3,000
b)
$300
c)
$30
d)
$5
8.
When a company buys new computers for their business, what part of the GDP equation does this count as?
a)
Consumption
b)
Investments
c)
Imports
d)
Exports
9.
What type of unemployment did people experience during the Great Depression?
a)
Seasonal
b)
Structural/Technological
c)
Cyclical
d)
Frictional
10.
What type of policy should the Federal Reserve use during a recession?
a)
Expansionary Fiscal Policy
b)
Contractionary Fiscal Policy
c)
Expansionary Monetary Policy
d)
Contractionary Monetary Policy
11.
A series of economic expansion and compression (markets getting bigger or smaller)
a)
business cycle
b)
credit
c)
market
d)
supply
12.
GDP that is NOT adjusted for inflation
a)
real GDP
b)
nominal GDP
c)
price level
d)
net national product
13.
Which is an example of a final good or service
a)
Coffee Beans at Starbucks
b)
T-Shirt at Polo Store
c)
Lumber at furniture store
d)
Wheat at a bakery
14.
Which is an example of an intermediate good
a)
Coffee Beans at Starbucks
b)
T-Shirt at Polo Store
c)
Alarm Clock at Walmart
d)
A car at Ford Dealership
15.
Bob loses his job at the Ford plant because the economy is in a contraction. he is
a)
Cyclically unemployed
b)
Seasonally Unemployed
c)
Structurally Unemployed
d)
Frictionally Unemployed
16.
Danny is quitting his job as a teacher and moving to california. He is
a)
Cyclically unemployed
b)
Seasonally Unemployed
c)
Structurally Unemployed
d)
Frictionally Unemployed
17.
____________always decreases purchasing power
a)
fiscal policies
b)
inflation
c)
monopoly
d)
trade barriers
18.
__________ are common products that consumers buy in a month.(used for CPI)
a)
market basket
b)
inflation
c)
fiscal policies
d)
monetary policy
19.
If the MPC is .7 and gross investment spending increase by $3 billion, GDP will
a)
increase by $10 billion
b)
increase by 2.1 billion
c)
decrease by $4.29 billion
d)
increase by $4.29 billion
20.
The multiplier is:
a)
1/MPC
b)
1/1+MPC
c)
1/MPS
d)
1/1-MPS
21.
The multiplier effect means that
a)
consumption is usually several times as large as savings
b)
a change in consumption can cause a larger change in investment
c)
an increase in investment can change GDP by a larger amount
d)
a decline in MPC can cause GDP to rise by a larger amount
22.
Assume MPC is 2/3. If investment spending increases by $2 billion, GDP will increase by
a)
$3 billion
b)
$2/3 billion
c)
$6 billion
d)
$2 billion
23.
If the MPC is .7 and gross investment spending increase by $3 billion, GDP will
a)
increase by $10 billion
b)
increase by 2.1 billion
c)
decrease by $4.29 billion
d)
increase by $4.29 billion
24.
During a recession, which of the following is likely to occur?
a)
an increase in real wages
b)
an increase in production
c)
and increase in the GDP growth rate
d)
an increase in the unemployment rate
25.
Which of the following is an example of an intermediate good?
a)
a pair of shoes at the mall
b)
a new car
c)
lumber purchased to build a house
d)
a fee paid to real estate agent for sale of a house
26.
Products that would be used in calculating GDP include
a)
Toys manufactured in China at a factory owned by a U.S. company.
b)
Cars manufactured in Tennessee at a factory owned by a Japanese automobile company.
c)
The purchase of a U.S. Treasury Bond.
d)
A social security payment to a retired Georgian.
27.
The calculation of GDP would directly include
a)
the sale of a 25-year-old house.
b)
the income of a person who pays rent by babysitting for the homeowner’s children.
c)
A dinner at Applebee’s.
d)
the price of the steel used to build a new hotel.
28.
this is
a)
cost push inflation
b)
demand pull inflation
c)
disinflation
d)
structural unemployment
29.
Open market operations are
a)
the processes by which money enters into circulation.
b)
reserves greater than the required amounts
c)
the buying and selling of government securities to alter the supply of money.
d)
rates of interest banks charge on short-term loans to their best customers.
30.
The rate banks charge other banks for a loan
a)
reserve ratio
b)
bond rate
c)
discount rate
d)
federal funds rate
31.
Drug dealing is not reflected in GDP because
a)
GDP does not measure the underground economy
b)
GDP does not measure nonmarket activities
c)
one of the "goods" not reported in GDP
d)
one of the "bads" not reported in GDP
32.
IN which of the four sectors that make up GDP would be the purchase of a foreign automobile be included?
a)
Consumer Spending
b)
Business Investment
c)
Government Spending
d)
Net Exports
33.
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?
a)
seasonal
b)
cyclical
c)
frictional
d)
structural
34.
A vehicle produced in the summer of 2009 and sold in December 2012 would be counted in which year's GDP
a)
2009
b)
2010
c)
2011
d)
2012
35.
Monetary policies the Federal Reserve can adopt include all of the following EXCEPT
a)
raising the discount rate.
b)
buying government bonds.
c)
lowering the reserve requirement.
d)
raising personal income tax rates.
36.
The Federal Reserve wants to reduce the nation's money supply. This could be accomplished by doing all of the following EXCEPT
a)
decreasing the discount rate.
b)
increasing the reserve requirement.
c)
selling securities on the open market.
d)
making banks hold a reserve for all types of deposits.
37.
If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would be
a)
decreasing taxes.
b)
decreasing government spending.
c)
reducing the investment tax credit.
d)
balancing the budget.
38.
If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is
a)
decreasing taxes.
b)
decreasing spending.
c)
decreasing the money supply.
d)
decreasing the reserve requirement.
39.
If Roger Rabbit's disposable income increases-from $600 to $650 and his level of personal-consumption expenditures $480 to $520, you may conclude that his marginal propensity to
a)
consume is 0.8
b)
consume is 0.4
c)
consume is 0.25
d)
save is .08
40.
If consumption spending totals $40 million, investment is $30 million, tax revenue totals $15 million, government spending is $10 million, exports are $3 million and imports are $5 million, GDP is...
a)
$103 million
b)
$80 million
c)
$93 million
d)
$78 million
41.
Where on the business cycle are we most likely to see the highest inflation?
a)
A
b)
B
c)
C
d)
D
42.
Where on the business cycle would you find the lowest unemployment?
a)
A
b)
B
c)
C
d)
D
43.
Where on the business cycle would you find the highest unemployment?
a)
A
b)
B
c)
C
d)
D
44.
Which letter represents the Expansion Phase?
a)
A
b)
B
c)
C
d)
D
45.
Which letter represents the Contractionary Phase?
a)
A
b)
B
c)
C
d)
D
46.
The difference between debt and deficit
a)
debt is accumulation of deficits
b)
deficits are larger
c)
deficit is caused by surplus
d)
no difference
47.
The unemployment rate has risen to 9.1%. GDP has dropped for the second quarter in a row, and CPI has fallen 2.1%
Which phase of the business cycle is being described, and what tool would the Federal Reserve Board of Governors most likely suggest be used?
Which phase of the business cycle is being described, and what tool would the Federal Reserve Board of Governors most likely suggest be used?
a)
expansion...easy money policy
b)
recession...lower the discount rate
c)
expansion...lower the reserve requirement
d)
recession...tight money policy
48.
The unemployment rate has dropped to 3.6%. GDP has increased for three consecutive quarters, and the CPI has increased to 7.1%.
Which phase of the business cycle is being described, and what policy would the Federal Reserve Board of Governors most likely suggest?
Which phase of the business cycle is being described, and what policy would the Federal Reserve Board of Governors most likely suggest?
a)
expansion...lower the discount rate
b)
recession...increase the reserve requirement
c)
recession...lower the federal funds rate
d)
expansion...tight money policy
49.
Would the Federal Reserve raise or lower the discount rate during a period of expansion and why?
a)
lower discount rate...to make loans easily available
b)
lower...to limit deflation
c)
raise...to make loans easily available
d)
raise...to limit inflation
50.
Which scenario is MOST likely if the reserve requirement is raised?
a)
More money is required to be kept in bank reserves, and less is available to be loaned out to businesses to invest in the economy
b)
More money is required to be kept in banks to loan out to businesses, so they can invest in their companies
c)
More money is required to be kept in the Federal Reserve banks, which increases the amount of money in circulation and stimulates the economy
d)
More money is required to be kept in the Federal Reserve banks to make it available for loans to member banks in poor economic times
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