Assume that the consumer price index in 2016 was 120 and in 2017 it was 126. What was the rate of inflation in 2017?

Select one:

a.

3%

b.

26%

c.

20%

d.

5%

e.

6%

How do economists measure the cost of unemployment?

Select one:

a.

By the difference between real GDP and nominal GDP.

b.

By the total costs of unemployment benefits and welfare payments that have to be paid out.

c.

By the difference between GDP and real GNP.

d.

By the amount by which potential GDP exceeds actual GDP

What would be the effect of 100,000 discouraged workers entering the labour force?

Select one:

a.

Both unemployment rates and the size of the labour force would increase

b.

Both unemployment rates and the size of the labour force would decrease.

c.

Unemployment rates would decrease, and the size of the labour force would remain unchanged.

d.

Unemployment rates would increase, and the size of the labour force would remain unchanged.

Suppose that in a particular economy there are 2 million part-time workers, 10 million full-time workers, and 4 million unemployed. What is the effect on the unemployment rate of 2 million of the part-timers become full-time workers?

Select one:

a.

It would increase.

b.

It would remain unchanged.

c.

There will be no immediate change, but in the long run it will decrease.

d.

The size of the labour force will increase.

e.

It would decrease.

Assume that leakages exceed injections. Which of the following is true?

Select one:

a.

Investment is greater than saving.

b.

Recession occurs.

c.

Inventories are decreasing.

d.

Imports are greater than exports.

How could reported GDP remain constant when production has risen?

Select one:

a.

If inventories fall.

b.

If underground production fell.

c.

If the increase in production was in the form of a non-market activity.

d.

If the price level rises.

Which of the following would be included in the measurement of GDP?

Select one:

a.

The value of all stock and share sales.

b.

The amount of government spending on goods and services.

c.

The amount of transfer payments made by the government.

d.

The value of intermediate goods.

If price of a product and consumption of its related product move in thesamedirection then the two goods are substitute.

Select one:

True

False