1. A increase in the price of plastic would result in

A. an increase in the supply if plastic

B. a decrease in the supply of plastic.

C. an increase in quantity supplied of. plastic

D. a decrease in quantity supplied of plastic

E. an increase in the supply of plastic milk cartons.

2. If real GDP was $900 billion and the CPI was 150, then nominal GDP was approximately

A. 1350

B. 600

C. 60

D. 6

E. 1.67

3. If nominal GDP was $1,500 billion in 2005 and the GDP deflator was 150, then real GDP would have been approximately

A. 10 billion

B. 1,000 billion

C. 1,350 billion

D. 2,250 billion

E. 3,000 billion

4. The unemployment rate published by the government is the percentage of the

A. population that is not working

B. population that is collecting unemployment

C. population that is unemployed

D. labor force with part-time jobs

E. labor force that is unemployed

5. The unemployment rate in the United States underestimates true unemployment because

A. the underground economy is not included in the figures

B. part time workers are not included in the figures

C. only workers who are structurally unemployed are included in the figures

D. discouraged workers are not included in the figures

E. only workers who are frictional and structurally unemployment are included in the figures

6. When inflation is increasing in the economy, what phase of the business cycle is active?

A. Trough

B. Expansion

C. Contraction

D. Peek

E. Slump

7.

-Describe two ways of calculating gross domestic product.

-Some items are not counted in GDP for various reasons. Identity three categories that are not counted and explain why they are excluded.