Question 1

In 2015, the average nominal wage rate in country A went up by 1% and the rate of inflation was -2%. The real wage rate growth in 2015 in the country must have been approximately __________.

-3%

-1%

0%

1%

3%

Question 2

Over the past three decades, the real GDP of the United States has increased at an average the rate of 3% per year. The average growth rate of population in the country has been 1% per year. What has been the average growth rate of real per capita GDP in the US during the past three decades?

0%

1%

2%

3%

4%

Question 3

Among the adult population in country C, 50% participate in the labor market and 45% are employed. What is the unemployment rate in country C?

5%

10%

20%

50%

Question 4

In country D, the total adult population and the number of adults with jobs have remained constant since last year, while the labor-force participation rate has declined. In this situation, the unemployment rate this year _________.

must have risen

must have declined

must have remained unchanged

may have risen or declined, depending on other developments in the economy

Question 5

Consider an economy that produces only two goods, soft drinks and hamburgers. The following price and quantity statistics are available about this economy:

Year

Hamburgers

Soft Drinks

2015

Price =$2.00;Quantity =2000

Price =$0.50;Quantity =2000

2016

Price =$2.25;Quantity =2000

Price =$0.50;Quantity =2200

Taking 2015 as the base year, find the growth rate of the constant-price GDP in 2016.Round to the nearest whole percent and enter just the number with no symbols.

Question 6

Consider the same economy as in Question 5. The following price and quantity statistics are available about this economy:

Year

Hamburgers

Soft Drinks

2015

Price =$2.00;Quantity =2000

Price =$0.50;Quantity =2000

2016

Price =$2.25;Quantity =2000

Price =$0.50;Quantity =2200

Taking 2015 as the base year, find the rate of inflation based on GDP deflator in 2016.Round to the nearest whole percentand enter just the number with no symbols.

Question 7

In country M, households have been going to restaurants for half of their meals and for the rest they have been enjoying their own cooking at home. This year, habits have changed and households are having only one quarter of their meals in restaurants. Assume that the total expenditure on all other goods and services remains unchanged from last year.

As a result of this change, the GDP of country M __________.

goes up this year

goes down this year

does not change this year

may go up or down this year

Question 8

The purchase of __________.

a used house does enter GDP

new material for improving a used house does not enter GDP

both a used house and the new material for improving a used house enter GDP

a used house does not enter GDP, but the purchase of new material for improving a used house does

Question 9

An Indian company buys a new machine made in Britain by a Japanese company. No additional resources are used in India for the investment. The machine is made entirely with British labor and British-made parts. Assume that other activities in India, Britain, and Japan are unaffected by this purchase.

As a result, __________.

India's GDP increases, but Japanese and British GDPs are unaffected

Japan's GDP increase, but British and Indian GDPs are unaffected

Britain's GDP increases, but Indian and Japanese GDPs remains unaffected

The GDPs of all three countries increase

Question 10

Consumer price index is a measure of the price level for the goods and services __________.

produced in a country and consumed by households inside and outside the country

imported or produced in a country and consumed by households inside and outside the country

imported or produced in a country and consumed by households in that country

produced and consumed in a country