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WorksheetsMacroeconomics Unit 2 Quiz
Total questions: 35
Worksheet time: 18mins
A nation's gross domestic product (GDP)
can be found by summing C + S + G + (X-M)
is the dollar value of the total output produced by its citizens, regardless of where they live.
can be found by summing C + Ig + G + (X-M)
is always some amount less than its NDP
Which of the following is a final good or service?
a restaurant meal purchased by a family
fertilizer purchased by a farm supplier
diesel fuel bought for a delivery truck
Chevrolet windows purchased by a General Motors assembly plant
Net exports are
that portion of consumption and investment goods sent to other countries
exports plus imports
imports minus exports
exports minus imports
(CHECK TABLE) 4
Refer to the accompanying data above (all figures in billions of dollars). GDP is
$116
$126.
$130
$134
Refer to the accompanying data above. NDP (net domestic product) is
$116
$121
$124
$150
The amount of after-tax income received by households is measured by
discretionary income
national income
disposable income
personal income
Real GDP refers to
the value of the domestic output after adjustments have been made for environmental pollution.
GDP data that embody changes in the price level but not changes in physical output.
GDP data that do not reflect changes in both physical output and the price level
GDP data that have been adjusted for changes in the price level.
Recurring upswings and downswings in an economy's real GDP over time are called
recessions
business cycles
output yo-yos.
total product oscillations
(CHECK TABLE) 9
Output and price data for a five-year period are shown in the table above. Assume an economy that makes only one product and that year 3 is the base year. The nominal GDP for year 5 is
$56
$64
$16
$49
(CHECK TABLE) 10
Refer to the accompanying data above (all figures in billions of dollars). GDP is
$390
$400
$422
$427
Refer to the same accompanying data above (all figures in billions of dollars). NI is
$362
$382
$447
$412
Countries engaged in international trade specialize in production based on
relative levels of GDP
comparative advantage
relative exchange rates
relative inflation rates
The ‘terms of trade’ reflect the
rate at which gold exchanges internationally for any domestic currency
ratio at which nations will exchange two goods
fact that the gains from trade will be equally divided
cost conditions embodied in a single country's production possibilities curve
Answer the question using the accompanying cost ratios for two products, fish (F) and chicken (C), in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and that these are the only two nations in the world.
Singsong: 1F = 2C Harmony: 1F = 4C
If these two nations specialize based on comparative advantage,
Singsong will both produce chicken and catch fish
Harmony will both produce chicken and catch fish.
Harmony will produce chicken and Singsong will catch fish
Singsong will produce chicken and Harmony will catch fis
The primary gain from international trade is
increased employment in the domestic export sector
more goods than would be attainable through domestic production alone
tariff revenue
increased employment in the domestic import sector
In the real world, specialization is rarely complete because
nations normally experience increasing opportunity costs in producing more of the product in which they are specializing
production possibilities curves are straight lines rather than curves bowed outward as viewed from the origin
customers prefer limited choices
international encourages monopolies
Suppose the domestic price (no-international-trade price) of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States will
have a domestic surplus of copper
export copper
import copper
neither export nor import copper
(CHECK TABLE) 18.
The production possibilities curves above suggest that
West Mudville should specialize in, and export, baseball bats
West Mudville should specialize in, and export, both baseballs and baseball bats
East Mudville should specialize in, and export, baseball bats
workers will try to immigrate from West Mudville to East Mudvill
(CHECK TABLE)
Refer to the diagram above, which shows the domestic demand and supply curves for a specific standardized product in a particular nation. If the world price for this product is $0.50, this nation will experience a domestic
shortage of 160 units, which it will meet with 160 units of imports
shortage of 160 units, which will increase the domestic price to $1.60
surplus of 160 units, which it will export
surplus of 160 units, which will reduce the world price to $1.00
Tariffs
may be imposed either to raise revenue (revenue tariffs) or to shield domestic producers from foreign competition (protective tariffs).
are also called import quotas
are excise taxes on goods exported abroad
are per-unit subsidies designed to promote exports
The phase of the business cycle in which real GDP declines is called
the peak
an expansion
a recession
the trough
(CHECK TABLE 22)
The table above contains data for a hypothetical single-product economy. Real GDP in year 3 is
$200
$300
$100
$400
Julia voluntarily quit her job to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management. Julia is presently
cyclically unemployed
structurally unemployed
frictionally unemployed
not a member of the labor force
Julio works in his house as a homemaker and full-time caretaker of his children. Officially, he is
unemployed
employed
in the labor force
not in the labor force
Assuming the total population is 200 million, the civilian labor force is 60 million, and 40 million workers are employed, the unemployment rate is
3.3 percent
6 percent
7 percent
53 percent
If actual GDP is $500 billion and there is a negative GDP gap of $50 billion, potential GDP is
$500 billion
$450 billion
$550 billion
$50 billion
27. The natural rate of unemployment is 4 percent and the actual rate of unemployment is 9 percent. According to Okun's law, the negative GDP gap as a percentage of potential GDP is
4 percent
8 percent
10 percent
5 percent
If the Consumer Price Index rises from 100 to 111 in a particular year, the rate of inflation is
11 percent
1 percent
0 percent
111 percent
If the rate of inflation is 5 percent per year, using the Rule of 70, the price level will double in about
4.1 years
5.8 years
10.2 years
14 years
Suppose the nominal annual interest rate on a car loan is 8 percent and lenders expect inflation to be 3 percent annually. The annual real rate of interest is
8 percent
3 percent
5 percent
11 percent
The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are
military goods and capital goods
services and nondurable consumer goods
clothing and education
capital goods and durable consumer goods
During a severe recession, we would expect output to fall the most in
the health care industry
in education and training
agriculture
the construction industry
Which of the following is not seen by economists as an underlying cause of business cycle fluctuations?
unexpected financial bubbles that eventually burst
shocks to the money supply by the nation's central bank
supply shocks caused by major innovations
all of these are identified as potential causes of business cycle changes
Which of the following would most likely move the economy into a recession in the short term?
invention of a new product that most consumers want to buy
innovations in management that enhance worker productivity
a major pandemic
Congress passing a reduction in personal income tax rates
The natural rate of unemployment is
higher than the full-employment rate of unemployment
lower than the full-employment rate of unemployment
that rate of unemployment occurring when the economy is at its full, potential output
found by dividing total unemployment by the size of the labor force
