1. Which of the following would not be included in GDP?

Group of answer choices

Salary to a public school teacher.

You buy some flour to bake a cake at home.

You write songs as your hobby, and you do not sell your songs.

You buy a pair of shoes at a department store.

A company buys some production machines.

2. Which of the following is included in the Consumption category of gross domestic product (GDP)?

Group of answer choices

increase in business inventories

purchase of a farming tractor by an agricultural company.

purchase of a new house

purchase of a new computer for your own entertainment

building public schools

3. Which of the following will lead to a decrease in unemployment rate?

Group of answer choices

Some unemployed people become discouraged and leave the labor force.

The economy enters a recession.

The government increases the unemployment benefit received by the unemployed.

College graduates enter the labor force and have not found a job yet.

Many companies replaced workers with robots. The laid-off workers keep looking for work.

4. For each of the following situations, classify whether the person is now either

• employed
• structurally unemployed
• frictionally unemployed
• cyclically unemployed
• not in the labor force but work eligible
• not work eligible

Group of answer choices

Tim has just relocated to Seattle. He is looking for a job with 10 interviews lined up.

[ Choose ] cyclically unemployed not in the labor force but work eligible not work eligible frictionally unemployed employed structurally unemployed

Celine studies at North Seattle College. She has an online business selling hand-made cards.

[ Choose ] cyclically unemployed not in the labor force but work eligible not work eligible frictionally unemployed employed structurally unemployed

Jane has retired. She taught Japanese language to her grandchildren at home.

[ Choose ] cyclically unemployed not in the labor force but work eligible not work eligible frictionally unemployed employed structurally unemployed

Peter is looking for a job, but he cannot find one yet. His skills are not needed in the economy any more.

[ Choose ] cyclically unemployed not in the labor force but work eligible not work eligible frictionally unemployed employed structurally unemployed

Mary was laid off due to a recession. She has stopped looking for a job.

[ Choose ] cyclically unemployed not in the labor force but work eligible not work eligible frictionally unemployed employed structurally unemployed

Hans is 9 years old. He spends time helping out in his mom's restaurant.

[ Choose ] cyclically unemployed not in the labor force but work eligible not work eligible frictionally unemployed employed structurally unemployed

5. Consider the following data that gives the quantity produced and unit price for three different goods across two different years. Assume that the base year is 2012.

Good	2012 Price	2012 Quantity	2013 Price
A	$2.00	500	$3.00
B	$4.00	1,000	$5.50
C	$2.00	200	$1.00

Calculate the CPI in 2013. (round your answer to the nearest first decimal place.)

6. In 2021, you received from your mom $500 as a gift. You deposited $100 to a bank account, and spent $400 to buy new textbooks at a bookstore. How much do the above activities contribute to the GDP of 2021? Answer: The contribution to the GDP of 2021 = $_______________

7. In 2021, company X in the US bought chocolate from another US company, which cost $40,000. Company X used the chocolate to make chocolate bars, and sold them for $200,000 in 2021. How much do the above activities contribute to the US GDP in 2021? Answer: The contribution to the US GDP in 2021 = $_______________

You are given the following information about an economy: Labor force: 180 million Not in the labor force but work eligible: 20 million Employed: 150 million

Use all the given information to answer

8. Calculate the unemployment rate. Round your answer to the nearest first decimal place.

(Hint: you need to find the number of unemployed people first.) Answer: the unemployment rate = _________%

9. Calculate the labor force participation rate. Answer: the labor force participation rate = _________%

10. Suppose the natural rate of unemployment = 10%.

(a) Are there any people cyclically unemployed? [ Select ] ["Yes", "No"]

(b) Is the actual real GDP above or below the full-employment output? [ Select ] ["above", "below"]

You are offered two jobs, one in Chicago paying $70,000 and one in Philadelphia paying $82,000. The price index in Chicago is 120, and in Philadelphia it is 150.

Use all the given information to answer

11. Convert the Chicago wage in Philadelphia dollars. Answer: The Chicago wage in Philadelphia dollars = $___________

12. Is the real wage in Chicago higher than the real wage in Philadelphia? [ Select ] ["Yes", "No"]

Suppose country A produces 3 goods only; textbooks, computers and cell-phones. The total production and prices of all three goods are given in the following table. Year 2000 is the base year.

Use all the given information to answer

Item	2000	2001	2002
	Price	Quantity	Price	Quantity	Price	Quantity
Textbooks	$200	12	$250	16	$400	14
Computers	$1,000	5	$1,200	9	$1,500	7
Cell-phones	$600	10	$650	15	$800	12

13. Calculate the nominal GDP in 2002.

Answer: The nominal GDP in 2002 = $________________

14. Calculate the percentage increase in nominal GDP between 2001 and 2002. (Round your answer to the nearest first decimal place.)

Answer: Between 2001 and 2002, nominal GDP increases by _________ %

15. Between 2001 and 2002, explain why the nominal GDP increases even though the quantities of all three goods decrease.

16. Calculate the real GDP in 2002. (Note that year 2000 is the base year.)

Answer: The real GDP in 2002 = $________________

17. What is the GDP deflator in year 2000?

18. Calculate the GDP deflator in 2002. (Round your answer to the nearest first decimal place.)

19. "Suppose students resold their textbooks. We should count the values of the resold textbooks in GDP."

Is the above statement correct? Explain. [ Select ] ["Yes, the statement is correct. If we do not count the values of the resold textbooks, this will lead to double counting.", "No, the statement is not correct. If we count the values of the resold textbooks, this will lead to double counting.", "No, the statement is not correct. The resold textbooks are intermediate product."]