Question 1(3 points)

Gross Domestic Product is ____________.

a

the market value of all final goods and services produced by a country's companies regardless of location.

b

the value of all goods and services bought and sold within a country's borders in a year

c

the market value of all final goods and services produced inside a country's borders in a year

d

a summary of all of the market values of intermediate goods within a country's borders in a year

Question 2(3 points)

What point in the business cycle is realized when real GDP is at its lowest level prior to expansion?

a

trough

b

growth

c

recession

d

peak

Question 3(3 points)

A business cycle graph shows _________________.

a

the cost of inputs used in making goods and services

b

changes in price level and unemployment

c

fluctuations in GDP

d

fluctuations in inflation

Question 4(3 points)

Currently, the per capita GDP in the United States _________.

a

is more than $100,000

b

is less than $1,000

c

is approximately $30,000

d

exceeds $50,000

Question 5(3 points)

Macroeconomics is __________.

a

the study of market regulation

b

the study of the economy as a whole

c

the study of how households and firms make decisions

d

the study of money and financial markets

Question 6(3 points)

A recession is defined as __________.

a

GDP has experienced growth for 2 quarters

b

GDP has declined for 2 consecutive quarters

c

A trough was discovered

d

A period of expansion is enjoyed

Question 7(3 points)

Consumer Spending, as related to GDP, includes all of the following EXCEPT

a

purchasing a new car

b

painting your own house

c

hiring an electrician to fix a light switch

d

buying a new suit from JC Penney

Question 8(3 points)

A recession is defined as ____________.

a

6 quarters of declining GDP

b

2 quarters of declining GDP

c

2 quarters of rising GDP

d

6 quarters of rising GDP

Question 9(3 points)

How is the following scenario counted for the purposes of determining GDP? Thomas mows his grandmother's lawn for her.

a

The item is counted in determining GDP because of spending by "C"

b

The item is counted in determining GDP because of spending by "I"

c

The item is counted in determining GDP because of spending by "Xn"

d

The item is NOT counted in determining GDP

Question 10(3 points)

How is the following scenario counted for the purposes of determining GDP? Cheryl buys a used truck to haul oldWall Street Journalnewspapers to be used as mulch in her garden.

a

The item is counted in determining GDP because of spending by "I"

b

The item is counted in determining GDP because of spending by "G"

c

The item is counted in determining GDP because of spending by "Xn"

d

The item is NOT counted in determining GDP

Question 11(3 points)

An increase in inflation generally hurts which group the least?

a

lenders who issued fixed rate loan

b

people on fixed incomes

c

a person on a retirement income that has no COLA feature

d

doctors who can increase their fees

Question 12(3 points)

Generally during an economic expansion, price level increases and unemployment __________.

a

is constant

b

decreases

c

usually follows a random and unpredictable pattern

d

also increases

Question 13(3 points)

Which of the following workers would The Bureau of Labor Statistics (BLS) consider unemployed?

a

a discouraged worker who has not been looking for a job for one year or more

b

a college graduate who is a door greeter at WalMart, but is looking for a better job

c

a severely disabled person who is not capable of working

d

a worker who lost his job when a robot was placed at the factory

Question 14(3 points)

The BLS considers the labor force participation rate to be ____________.

a

everyone over 16 years of age

b

employed + unemployed persons

c

all person working or actively looking for a job

d

all persons who don't work for the government and are not discouraged

Question 15(3 points)

Technology tends to increase which type of unemployment?

a

seasonal

b

structural

c

discouragement

d

cyclical

Question 16(3 points)

If you quit your job because of working conditions and an unrealistic boss, you would be considered in which unemployment category?

a

cyclical

b

frictional

c

seasonal

d

structural

Question 17(3 points)

Economists say that the only two types of unemployment that are naturally occurring in an economy are:

a

frictional and structural

b

cyclical and discouragement

c

cyclical and frictional

d

cyclical and structural

Question 18(3 points)

When demand increases faster than the amount of goods and services _________ inflation occurs.

a

Consumer

b

Demand Push

c

Demand Pull

d

Cost Push

Question 19(3 points)

Pick the best description for this scenario: The snow has thawed and Adam has lost his job at the Vail Ski Resort Company.

a

Frictional Unemployment

b

Structural Unemployment

c

Seasonal Unemployment

d

Cyclical Unemployment

Question 20(3 points)

The biggest reason people concern themselves with inflation is _________________

a

that with inflation there tends to be high unemployment

b

the fact that banks will be paid with money that has increased in value

c

in the long run costs will decrease

d

the money people have saved will lose some of its value

Question 21(3 points)

The term inflation is used to describe a situation in which _______.

a

incomes in the economy are increasing

b

stock market prices are rising

c

the economy is growing rapidly

d

the overall level of prices in the economy is increasing

Question 22(3 points)

When there is an increase in the general cost of inputs _________ inflation occurs.

a

Consumer

b

Demand Push

c

Demand Pull

d

Cost Push

Question 23(3 points)

The Consumer Price Index is used to ________.

a

track changes in the level of wholesale prices in the economy

b

monitor changes in the cost of living

c

monitor changes in the level of real GDP

d

track changes in the stock market

Question 24(3 points)

The best definition for inflation is ____________________.

a

an increase in the general price level throughout the economy

b

an increase in just a few of the items people buy on a regular basis

c

a large increase in the price of an important item like gasoline

d

a decrease in the general price level throughout the economy

Question 25(3 points)

What agency is responsible for calculating both the CPI and the unemployment rate?

a

The BEA

b

The IRS

c

The BLS

d

The U.S. Department of Treasury

Question 26(3 points)

What economics circumstance occurred during the Revolutionary War, during the Confederacy, and in Europe before WWII?

a

hyperinflation

b

tight money supply

c

excess quantity of goods

d

a slow-down in spending

Question 27(3 points)

The Bureau of Labor Statistics calculates CPI by using _______________________.

a

subtracting the expected rate of inflation from the unexpected rate of inflation

b

the input costs of land, labor and capital

c

averaging the cost of all goods and services produced in one month

d

a survey of the adjusted costs of a basket of predetermined goods

Question 28(3 points)

Identify the graph that correctly illustrates cost-push inflation.

a

Graph A

b

Graph B

c

Graph C

d

Graph D

Question 29(3 points)

Use the information in the table to answer the question below.20022003Nominal GDP1,0001,300CPI120130Population1012

If the Bureau of Labor Statistics recalculated CPI and used 2002 as the base year, what would be the new 2002 CPI ?

a

1000

b

833

c

880

d

100

Question 30(3 points)

Assume the market basket consists of 3 forks and 2 milks. Use the information in the table to answer the question below.20002001Forks$2$3Milk$3$5

Assume that the base year is 2000, what is the cost of the market basket in 2000?

a

5

b

12

c

19

d

100

Question 31(5 points)

Economist A.W. Phillips created the Phillips Curve to explain an important economic theory. Explain what the graph of the short run Phillips Curve below means for an economy.

Your answer:

Question 32(5 points)

In this unit, you learned real GDP growth matters to a nation. Explain why this is true to the citizens of a nation by including at least two of the following economics terms in your explanation: Output, Income, Standard of Living, Rule of 70, Circular Flow of the Economy, Employment, and Price Stability.

Your answer:

Question 28 (3 points) Identify the graph that correctly illustrates cost-push inflation. Graph A Graph B Price Price Level AD1 Level AD AS AD AS AD1 Real GDP Output Real GDP Output Graph C Graph D Price Price Level Level AD AS AS1 AD AS1 AS Real GDP Output Real GDP OutputQuestion 29 (3 points) Use the information in the table to answer the question below. 2002 2003 Nominal GDP 1,000 1,300 CPI 120 130 Population 10 12Question 30 (3 points) Assume the market basket consists of 3 forks and 2 milks. Use the information in the table to answer the question below. 2000 2001 Forks $2 $3 Milk $3 $5