Question 1 of 70If real GDP in a particular year is $80 billion and nominal GDP is $240 billion, the GDP price index for that year is:

• A.100.
• B.200.
• C.240.
• D.300.

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Question 2 of 70If the number of unemployed workers is 19 million, the number in the working-age population is 500 million, and the unemployment rate is 4%, how many workers are in the labor force?

• A.1 million
• B.20 million
• C.475 million
• D.481 million

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Question 3 of 70Which of the following describes the accuracy of the Consumer Price Index?

• A.Changes in the CPI accurately reflect the true rate of inflation.
• B.Changes in the CPI understate the true rate of inflation.
• C.Changes in the CPI overstate the true rate of inflation.
• D.Changes in the CPI are unrelated to the true rate of inflation.

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Question 4 of 70Assume the average annual CPI values for 2017 and 2018 were 207.3 and 215.3, respectively. What was the percent increase in the CPI between these two years?

• A.0.96
• B.1.04
• C.3.86
• D.8.0

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Question 5 of 70Assume net exports are -$220, consumption is $5,000, tax revenues are $1,000, government purchases are $1,500, and 2003 GDP, calculated by the expenditure approach, is $8,000. We can conclude that

• A.private investment was $1,940
• B.public investment was $310
• C.private investment was $320
• D.private investment was $1,720
• E.public investment was $1,730

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Question 6 of 70Economic growth may cause the following except

• A.rise in life expectancy at birth
• B.deforestation
• C.information asymmetry
• D.greenhouse effect

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Question 7 of 70Which of the following is associated with macroeconomics?

• A.an examination of the incomes of Harvard Business School graduates
• B.an empirical investigation of the general price level and unemployment rates since 1990
• C.a study of the trend of pecan prices since the Second World War
• D.a case study of pricing and production in the textbook industry

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Question 8 of 70The Ghana Statistical Service would categorize a person as ________ if they were temporarily away from their job because they were ill.

• A.employed
• B.unemployed
• C.a discouraged worker
• D.out of the labor force

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Question 9 of 70Suppose a nation's 2003 nominal GDP was $972 billion and the general price index was 90. To make the 2003 GDP comparable with the base year GDP, the 2003 GDP must be:

• A.adjusted downward to $678 billion.
• B.inflated to $1080 billion.
• C.deflated to $896 billion.
• D.deflated to $1080 billion.

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Question 10 of 70Human capital (H) is a produced factor of production. Human capital is less tangible.

• A.Both statements are true, and 2nd statement is the correct explanation of 1st statement
• B.Both statements are true but 2nd statement is not the correct explanation of 1st statement
• C.1st statement is true but 2nd statement is false
• D.1st statement is false but 2nd statement is true

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Question 11 of 70Technological knowledge cannot be shared among many producers.

• A.TRUE
• B.FALSE

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Question 12 of 70If real GDP falls from one period to another, we can conclude that:

• A.deflation occurred.
• B.nominal GDP fell.
• C.inflation occurred.
• D.none of A, B, C necessarily occurred.

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Question 13 of 70Potential GDP is the maximum output a firm is capable of producing. Potential GDP is always greater than real GDP in an economy

• A.Both statements are true
• B.Both statements are false
• C.1st statement is true but 2nd statement is false
• D.1st statement is false but 2nd statement is true

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Question 14 of 70Labor unions cause unemployment because the union contract wage is set

• A.below the market wage, causing a shortage of labor.
• B.below the market wage, causing a surplus of labor.
• C.above the market wage, causing a surplus of labor.
• D.above the market wage, causing a shortage of labor.

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Question 15 of 70In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market.

• A.product; financial
• B.resource; product
• C.product; resource
• D.capital; product

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Question 16 of 70Economic growth always brings about negative externalities.

• A.TRUE
• B.FALSE

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Question 17 of 70In the circular flow model:

• A.households sell resources to firms.
• B.households receive income through the product market.
• C.households spend income in the resource market.
• D.businesses neither buy nor sell resources.

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Question 18 of 70If the number employed is 190 million, the working-age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is

• A.5%.
• B.5.2%.
• C.8%.
• D.10%.
• E.50%.

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Question 19 of 70The nominal interest rate plus the inflation rate equals the real interest rate. If inflation expectations are increasing, we would expect that the nominal interest rate would also be increasing, holding all else constant.

• A.Both statements are true
• B.Both statements are false
• C.1st statement is true, but 2nd statement is false
• D.1st statement is false, but 2nd statement is true

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Question 20 of 70Which of the following is an example of a final good or service?

• A.Paint purchased by Ford, Inc. used to paint their new fleet of Mustangs.
• B.Beef bought by a restaurant owner from a wholesale food distributor.
• C.A brand new economics text book purchased by an legonite student.
• D.Jet Fuel bought by Northwest Airlines to power its fleet of planes.

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Question 21 of 70National income has the following pieces: Net factor income from abroad = 10, Income from private domestic industries = 780, Income from governmental industries = 100. The national accounts also show:Personal consumption expenditures = 500, Government purchases = 250, Exports = 40, Imports = 60, Depreciation = 30. What is gross private domestic investment?

• A.150
• B.180
• C.220
• D.230
• E.240

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Question 22 of 70The University of Chicago, a privately owned school, is currently building a new hospital. This will be classified in U.S. GDP as ________, because ____________.

• A.investment; it increases the capital stock
• B.consumption; it will provide medical services to consumers
• C.government purchases; the construction constitutes government expenditure
• D.net exports; most construction workers are foreigners

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Question 23 of 70Case 3: Given the information below: Base Year (2013) 2018 Product Quantity Price Price Milk 50 $1.20 $1.50 Bread 100 1.00 1.10 From Case 3, assume the market basket for the consumer price index has two productsbread and milkwith the following values in 2013 and 2018 for price and quantity: The Consumer Price Index for 2018 equals

• A.118.
• B.116.
• C.86.
• D.85.

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Question 24 of 70Real GDP is a good gauge of economic progress. With real GDP, the value of output is measured in constant prices.

• A.Both statements are true, and 2nd statement is the correct explanation of 1st statement
• B.Both statements are true but 2nd statement is not the correct explanation of 1st statement
• C.1st statement is true but 2nd statement is false
• D.1st statement is false but 2nd statement is true

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Question 25 of 70Your grandfather tells you that he earned $7,000/year in his first job in 1961. You earn $35,000/year in your first job in 2018. You know that average prices have risen steadily since 1961. You earn

• A.5 times as much as your grandfather in terms of real income.
• B.more than 5 times as much as your grandfather in terms of real income.
• C.less than 5 times as much as your grandfather in terms of real income.
• D.less than 5 times as much as your grandfather in terms of nominal income.

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