Q1) The government is primarily concerned with preventing which type of unemployment?

A) Frictional unemployment

B) Cyclical unemployment

C) Structure unemploymnet

D) The natural rate of unemployment (INCORRECT ANSWER)

E) The government is not concerned with preventing unemployment

Q2) Which of the following is a limitation of using a country's nominal GDP as a standard of living measure?

A) Nominal GDP does not account for inflation (INCORRECT ANSWER)

B) All of these are nominal GDP deficiencies

C) None of these options: nominal GDP is the best measure of standard of living available to economists

D) Nominal GDP includes money spent repairing disaster-torn areas

E) Nominal GDP does not account for population change

Q3) The natural rate of unemployment (NRU) in certain countries is higher than the NRU in the United States. Which of the following traits of the other country could account for the difference?

A) Relatively stronger unemployment benefits

B) Relatively weaker work ethic

C) Relatively higher salaries

D) Relatively lower Labor Force Participation Rate (INCORRECT ANSWER)

E) Relatively weaker currency exchange rates

Q4) If the GDP Deflator is 120, and the Real GDP is $50 billion, then the Nominal GDP is:

A) $70 billion

B) None of these responses is correct

C) $60 billion

D) $6000 billion

E) $2.4 billion (INCORRECT ANSWER)

Q5) GDP includes which of the following (assume all purchases are for new, domestic products):

A) All of these options are included in GDP

B) A tractor built in the United States but sold in Mexico

C) The purchase of assembly line equipment by a manufacturing business (INCORRECT ANSWER)

D) Purchases made by an elderly man with his Social Security check

E) The commission paid to a stock broker by a consumer

Q6) Real interest rates are calculated by the following formula:

A) (Nominal interest rate) - (Expected inflation rate)

B) (Nominal interest rate) - (Percent growth of Real GDP)

C) (Nominal interest rate) - (Expected GDP deflator) (INCORRECT ANSWER)

D) None of these are correct

E) (Nominal interest rate) - (Expected CPI)

Q7) Cost-Push Inflation may be caused by:

A) Increased consumer wealth

B) A high natural rate of unemployment

C) Increased factors of production costs

D) Decreased producer wealth (INCORRECT ANSWER)

E) Decreased factors of production costs

Q8) An unemployed typewriter repairman (technology replaced by computers) is an example of which of the following:

I. Cyclical unemployment

II. Frictional unemployment

III. Structural unemployment

IV. Creative destruction

A) III and IV only

B) II only

C) III only

D) I only

E I and II only (INCORRECT ANSWER)

Q9) When calculating unemployment, which of the following persons is considered unemployed:

A) A thirteen-year-old middle school student without a job

B) None of these persons is considered unemployed

C) A part-time technician without a full-time job

D) A voluntarily stay-at-home parent without a job

E) A college student who chooses to focus on school by not working (INCORRECT ANSWER)

Q10) Gross Domestic Product (GDP) does not include which of the following (assume all goods are new, domestic products):

A) A company's payment to its lawyer for legal advice

B) An individual's payment for a doctor's office visit

C) The government's purchase of a fighter jet

D) A company's purchase of a new computer system (INCORRECT ANSWER)

Q11) An attorney who loses his job, wants a job, but refuses to accept a job offer as a cashier for the local supermarket is which of the following:

I. Employed

II. Unemployed

III. A member of the labor force

A) I and III only

B) II and III only

C) II only (INCORRECT ANSWER)

D) None of the options provided

E) I only

Q12) Consider the following table:

Year Nominal GDP Real GDP Deflator 50 50 100 2 75 60 125 3 150 100 150 4 200 125 160