ap macro unit 2 multiple choice

Gross Domestic Product is equivalent to the sum of:

e. consumer spending, investment spending, government purchases and net exports

which of the following will be included in the current year's calculation of GDP?

b. income earned as a lifeguard at a summer camp

which of the following would represent an addition to a nation's GDP?

c. the government hires workers to install street lights

if an american student purchases a personal computer made by a korean owned company located in california, what would happen to consumption and the gdp of the USA as a result?

a. consumption: increase/ gdp: increase

which of the following is true regarding nominal and real gdp?

e. the only thing that can increase real gdp is an increase in output

if real gdp is increasing at 5% per yr and nominal gdp is increasing at 10% per yr, which of the following is necessarily true?

c. the price level is increasing

as a measure of economic welfare, gdp underestimates a country's production of goods and services when there is an increase in

b. household production

if purchases of education and medical care were counted as investment rather than consumption, gdp would:

a. not change, because there is no change in total aggregate expenditures

the major difference between real and nominal gdp is that real gdp

c. is adjusted for price-level changes using a price index

assume the cpi increases from 100 to 120 between 2014 and 2015. Which of the follow must be true?

d. the average price of a specific market basket increased 20%

if the consumer price index changes from 100 to 90, economists will know that:

a. there was deflation in the economy

Which of the following is most true regarding unanticipated inflation?

I. Workers with fixed wage rates are hurt by unanticipated inflation

II. Employers that charge fixed wages are hurt by unanticipated inflation

III. Lenders with fixed rate loans are helped by unanticipated inflation.

IV. Borrowers who have fixed rate loans are helped by unanticipated inflation.

b. I and IV only

A mechanic that leaves his job working on cars and is currently looking for a job working on planes is considered

a. frictionally unemployed

Nicole was laid off as a waitress when her restaurant closed down due to the slow economy. Nicole is considered

d. cyclically unemployed

the natural rate of unemployment

c. is the sum of frictional and structural unemployment

A economy facing extremely low employment and high GDP growth will most likely experience which of the following?

b. an increase in price level

The official unemployment rate is not always the most accurate indicator of actual unemployment in the economy because

d. the official rate does not include persons who have given up looking for work

the unemployment rate measures the percentage of

a. people in the labor force who are actively looking, but do not have jobs

If the nominal GDP for a given year is $500 Billion and the real GDP for that year is $400 Billion then which of the following must be true

b. the gdp inflator is 125

demand-pull inflation is most likely to occur when

a. there is an increase in consumer spending