ECON 4710 Chapter : Econ4710 Ch2

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15 Mar 2019

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Important economic data: gross domes5c product (gdp) - measures the na5on"s total income and the total expenditure: the consumer price index (cpi) - measures the level of prices in the economy: unemployment rate. - tells us the frac5on of workers who are unemployed: fred (federal reserve economic data) hjp://research. stlouisfed. org/fred2/ Gross domes5c product (gdp: available at every three months, computed by the bureau of economic analysis, two interpreta5ons: Total expenditure on domes5cally- produced nal goods and services. Total income earned by domes5cally- located factors of produc5on: income = expenditure . Two sides of the same coin. Final goods vs. intermediate goods: final goods: Goods that are ul5mately consumed by households, Rms, and government, rather than used in the produc5on of another good (e. g. , car) = value added + value of intermediate goods used. Va = - = . Va = - = .

Related Questions

8. Which of the following items is included in the calculation of GDP?

a.Purchase of a used car.

b.Purchase of 100 shares of General Motors stock.

c.Purchase of an intermediate good.

d.None of the above would be included

9. Difference between Real and Nominal GDP is:

a.Change in price level from base year to current year

b.Measured by excluding some of the sectors

c.That real GDP is always smaller than Nominal GDP

d.None of the above

10. GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,410 billion. Net exports are:

a.+$53 billion

b.-$84 billion

c.-$47 billion

d.-$161 billion

11. Equality (As a tool of measurement for quality of life) refers to a balance of Economic and Political Power between which two groups?

a.Homeless and Employed

b.Men and Women

c. Different ethnic groups

d. Rich and Poor

12.What is inflation?

a.A fall in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelter

b.A rise in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelter

c.A rise in the general level of prices occurs, workers need less money to pay for goods, clothing and shelter

d.A fall in the general level of prices occurs, workers need less money to pay for goods, clothing and shelter

13.Which of the following is the best measure of how inflation affects consumers?

A.The increase in the price of gold

B. The increase in the consumer price index

C. The increase in the price of a single product

D. The decrease in the consumer price index

14. The Consumer Price Index (CPI)

a. Measures the rate of output in the economy over one year.

b.Measures the increase in wholesale prices since a base year.

c.Is deficient because it does not include medical prices.

d.Is used to calculate the rate of inflation over a given period.

15.How is the unemployment rate computed?

a. Number of unemployed persons divided by the number of economically active (i.e. employed and unemployed) persons aged fifteen years and over.

b.Number of unemployed persons divided by the number of people aged fifteen years and over.

c.Number of unemployed persons divided by the number of employed persons aged fifteen years and over.

d.None of the above

byzantiumotter67

This question tests your knowledge of what activities are includedin calculating GDP. Decide for each item whether it is part of GDPand, if so, to which expenditure category it belongs.

2. Purchase of 100 shares of General Motors stock:

A. Not counted in GDP

B. Counted as part of consumption

C. Counted as part of investment

D. Counted as part of government

E. Counted as part of net exports

3. Consider the following three individuals.

Julie did not work for pay last week, but she met with a jobcounselor and went on two job interviews.

Jack was laid off from his job at a furniture store six months ago.He has a family to support and is frustrated with his inability tofind a full-time position. Last week he took a part-time job at afast-food restaurant, but could work only three hours.

Patricia has been out of work for almost a year. She desperatelyneeds a job but has become so discouraged that she has given up onher job search.

Which of these people would be considered unemployed by the Bureauof Labor Statistics (BLS)?

A. Julie

B. Jack

C. Patricia

D. Julie and Jack

E. Julie and Patricia

F. Jack and Patricia

G. All three individuals

H. None of the individuals

4. Which of the following individuals would NOT be consideredunemployed under the Bureau of Labor Statistics criteria?

A. An assembly-line worker for General Motors who is laid offbecause of a reduction in car sales.

B. An assembly-line worker for General Motors who quits her job andreturns to college on a full-time basis.

C. An assembly-line worker for General Motors who quits her job butis interviewing for a position as a part-time bank teller.

D. A recent high-school graduate who is seeking his first job as anassembly-line worker at General Motors.

This table shows employment data for the United States for December2002. The civilian unemployment rate, which is the most commonjobless statistic quoted in the press, only includes non-militaryand non-institutionalized adults 16 years of age and older. Allnumbers are in thousands of people.

Civilian Non-Institutional Population
(16 years of age and over) Employed Unemployed

214,968 133,952 8,590

Source: Economic Report of the President, 2003

5.1. What was the unemployment rate in December 2002? (Express youranswer to the nearest tenth of a percent.)

%
Please enter 1 digit after the decimal point.

This table shows employment data for the United States for December2002. The civilian unemployment rate, which is the most commonjobless statistic quoted in the press, only includes non-militaryand non-institutionalized adults 16 years of age and older. Allnumbers are in thousands of people.

Civilian Non-Institutional Population
(16 years of age and over) Employed Unemployed

214,968 133,952 8,590

Source: Economic Report of the President, 2003

5.2. What was the labor force participation rate in December 2002?(Express your answer to the nearest tenth of a percent.)

%
Please enter 1 digit after the decimal point.

6. The Consumer Price Index measures:

A. The cost of all goods and services produced within a country'sborders

B. The cost of goods and services consumed by a typicalhousehold

C. The change in income received by a typical household

D. The cost of keeping a family above the poverty line

7. Which of the following is NOT a characteristic of discouragedworkers?

A. They want a job.

B. They are not currently working.

C. They are counted as unemployed by the government.

8. If gross investment is $50 billion and depreciation is $20billion, the economy's capital stock rises by:

A. $70 billion

B. $50 billion

C. $30 billion

D. $20 billion

9. The table shows the distribution of total expenditure on the CPImarket basket across several broad categories.
Category of Goods and Services Percent of
Market Basket

Apparel 4%
Education and Communication 6%
Food and Beverages
16%
Housing 41%
Medical Care 6%
Other Goods and Services 4%
Recreation 6%
Transportation 17%

Source: Bureau of Labor Statistics
Which of the following will have the biggest impact on theCPI?

A. A 4% increase in the cost of apparel

B. A 4% increase in the cost of medical care

C. A 4% decrease in the cost of recreation

D. A 4% increase in the cost of food and beverages

. Which of the following activities would be included in thecalculation of GDP for the United States?

A. Texas Instruments produces computer chips at a manufacturingfacility in Indonesia.

B. I chop down a cherry tree on my property and make a dining roomtable. I saw a similar table sell for $800 in a local furniturestore.

C. Honda, a leading Japanese automobile company, produces 25,000Accords at its Indiana plant and exports them back to Japan.

D. Goodyear Tire Company manufactures 250,000 tires. The tires areto be sold to General Motors, which will put them on newautomobiles.

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ECON 4710 Chapter : Econ4710 Ch2

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