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AP Econ Unit II Review

Total questions: 35

Worksheet time: 26mins

Name
Class
Date
1.

The expenditure by all levels of government on goods and services

a)

Imports of goods and services

b)

Investment

c)

Consumer expenditure

d)

Government expenditure on goods and services

2.

The expenditure by households on consumption goods and services.

a)

Business Cycle

b)

Exports of goods and services

c)

Consumption expenditure

d)

Government expenditure on goods and services

3.

The market value of all the final goods and services produced within a country in a given time period.

a)

Gross Domestic Product

b)

Net exports of goods and services

c)

Nominal GDP

d)

Real GDP

4.

The purchase of new capital goods (tools, instruments, machines, buildings) and additions to inventories

a)

Exports of goods and services

b)

Real GDP

c)

Investment

d)

Net exports of goods and services

5.

The value of the final goods and services produced in a given year expressed in terms of the prices in a reference base year.

a)

Real GDP

b)

Gross Domestic Product

c)

Business Cycle

d)

Nominal GDP

6.

The value of the final goods and services produced in a given year expressed in terms of the prices of the same year.

a)

Real GDP

b)

Nominal GDP

c)

Net exports of goods and services

d)

Gross Domestic Product

7.

Items that firms in the United States produce and sell to the rest of the world

a)

Imports of goods and services

b)

Investment

c)

Nominal GDP

d)

Exports of goods and services

8.

The value of exports of goods and services minus the value of imports of goods and services.

a)

Gross Domestic Product

b)

Net exports of goods and services

c)

Investment

d)

Nominal GDP

9.
Expectant parents buy supplies for the nursery.  Would this be included in GDP? 
a)
Yes - Consumer Spending
b)
Yes - Investment 
c)
No - Intermediate goods
d)
No - Non-market activity
10.
Which of the following purchases is included in the calculation of gross domestic product?
a)
A used economics textbook from the bookstore
b)
1,000 shares of stock in a computer firm
c)
A car produced in a foreign country
d)
New harvesting equipment for the farm
11.
Which of the following would be counted as investment when calculating gross domestic product?
a)
The purchase of a used computer by an auto manufacturer
b)
The purchase of a share of IBM stock by an employee
c)
The construction of a new house
d)
The construction of roads by the government
12.
Which of the following would be an example of an intermediate good or service?
a)
A calculator purchased by a college student for taking exams
b)
Gasoline purchased by an insurance agent to visit clients at their homes
c)
A car purchased by a student’s parents and given to the student
d)
Tuition paid by a student at a state university
13.
Of the following, which is the best example of structural unemployment?
a)
A computer programmer who quits her job to move to a warmer climate
b)
A construction worker who loses his job in the winter
c)
An auto worker who loses her job during a recession
d)
A steel worker who is replaced by a robot
14.
Which of the following is true about the natural rate of unemployment?
a)
It can vary over time.
b)
It is 2 percent orless of the civilian laborforce.
c)
It is equal to the structural unemployment rate.
d)
 It allows for some frictional and cyclical unemployment.
15.
When the actual inflation rate is greater than the anticipated inflation rate, which of the following is most likely to suffer?
a)
Those who lend at a fixed interest rate
b)
Those who borrow at a fixed interest rate
c)
Retired persons with cost-of-living adjustment in their benefits
d)
Employers who hire workers with longterm labor contracts
16.
Which of the following would NOT be considered part of the labor force?
a)
Tyler, a banker who feels he is overqualified for his job.
b)
Savana, who is unemployed but has attended  three job interview in the last month.
c)
Ricky, who has a part-time job but wants a full-time job.
d)
Garrett, a stay-at-home dad.
17.
If you live on a fixed income, how will you be affected by inflation.
a)
You are hurt because your purchasing power has decreased.
b)
You are helped because your purchasing power has increased.
c)
You are helped because interest rates rise.
d)
You are hurt because interest rates rise.
18.
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
19.

What is the size of the Labor Force?

Unemployed (Looking for job) = 200

Retired = 5

Prison = 2

School (full time, not looking for job) = 10

Employed = 180

Unemployed (not looking for job) = 20

a)

180

b)

200

c)

220

d)

237

20.
The unemployment rate is calculated as the number of
a)
unemployed persons divided by number of employed persons
b)
persons in the labor force divided by the number of unemployed
c)
unemployed divided by size of the labor force
d)
employed persons divided by number of unemployed persons
21.
A general rise in overall prices is called:
a)
Deflation
b)
Inflation
c)
Consumer Price Index
d)
Federal Reserve
22.
What occurred between June and July of 2016?
a)
Inflation
b)
Hyperinflation
c)
Deflation
d)
Cost-push Inflation
23.
What occurred between 2007 and 2008?
a)
Inflation
b)
Deflation
c)
Hyperinflation
d)
Consumer Price Index
24.

A Chik-fil-A milkshake today costs $2.75. The Hapeville, Georgia location sold 5,000,000 this year. In 1967, it cost $0.80 and they sold 2,000,000. How do I find the nominal GDP for Chik-fil-A milkshakes in 1967?

a)

2.75 x 5,000,000

b)

.80 x 2,000,000

c)

.80 x 5,000,000

d)

2.75 x 2,000,000

25.
Each individual on food stamps in Delaware can receive up to $194 a month.  Is this included in government spending?
a)
Yes - Government spending
b)
Yes - Consumer Spending
c)
No - Intermediate Goods
d)
No - Tranfer Payment
26.

Ms. Fremming is quitting his job as a teacher and moving to California. She is

a)

Cyclically unemployed

b)

Seasonally Unemployed

c)

Structurally Unemployed

d)

Frictionally Unemployed

27.
The unemployment rate does not account for which two types of people?
a)
discouraged workers (hidden unemployed) and those employed
b)
full time carers and those in school
c)
retirees and those in prison
d)
discouraged workers (hidden unemployed)  and underemployed
28.
The unemployment rate does not account for which two types of people?
a)
discouraged workers (hidden unemployed) and those employed
b)
full time carers and those in school
c)
retirees and those in prison
d)
discouraged workers (hidden unemployed)  and underemployed
29.
Who is most likely to be hurt by inflation?
a)
someone who borrowed money
b)
a retiree on a fixed income
c)
a business owner
d)
the U.S. government
30.
Which of the following would not affect the size of real GDP?
a)
Consumer purchase of a new car for personal use.
b)
Government purchase of a new car for the military
c)
Consumer purchase of a rare renaissance painting. 
d)
Business purchase of a new car for a delivery vehicle.
31.
Which of the following people would be considered structurally unemployed? 
a)
Unemployed auto assembly line factory worker during a recession.
b)
A high school student who mows lawns during the summer, but is out of work because it is winter
c)
An auto assembly line worker who quit her job to go back to school full-time to improve her job skills
d)
Unemployed auto assembly line factory worker who was replaced with a robot
32.
Which of the following will most likely occur during the expansionary phase of the business cycle? 
a)
Real GDP rises and unemployment falls.
b)
Real GDP rises and unemployment rises. 
c)
Real GDP declines and inflation rises.
d)
Interest rates rise and the number of business failures rise. 
33.
If the consumer price index (CPI) were 131 at year-end 1999 and 125 at year-end 1998, then inflation during 1999 was 
a)
zero; prices were stable during 1999
b)
4.8 percent
c)
6.0 percen
d)
8.4 percent
34.
Frictional unemployment 
a)
would be eliminated if the economy were operating at full employment levels of GDP.
b)
is zero when we have achieved the Natural rate of unemployment.
c)
is present even when labor markets are working well.
d)
is the result of worker skills not matching the jobs available
35.
Which result occurs when federal government expenditures are greater than the federal government's total receipts?
a)
reduced net exports
b)
increased excise taxes
c)
a federal budget surplus
d)
a federal budget deficit

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