GDP, Unemployment, and Inflation Practice Quiz (practice test)

Gross Domestic Product is defined as...

Use table below to answer the following questions

Personal Consumption Spending ----------------------------- $600

Domestic Investment Spending -------------------------------$300

Imports . --------------------------------------------------------$40

Exports ---------------------------------------------------------$20

Local Government purchases of goods and services --------$300

Federal Government purchases of goods and services ------$200

Consumer Spending + Investment Spending + Government Spending + Exports - Imports

According to the data in the table, how much of GDP is the result of government spending?

Use table below to answer the following questions

Personal Consumption Spending ----------------------------- $600

Domestic Investment Spending -------------------------------$300

Imports . --------------------------------------------------------$40

Exports ---------------------------------------------------------$20

Local Government purchases of goods and services --------$300

Federal Government purchases of goods and services ------$200

$500

According to the data in the table, what is the value of Net Exports?

Use table below to answer the following questions

Personal Consumption Spending ----------------------------- $600

Domestic Investment Spending -------------------------------$300

Imports . --------------------------------------------------------$40

Exports ---------------------------------------------------------$20

Local Government purchases of goods and services --------$300

Federal Government purchases of goods and services ------$200

-$20

According to the data in the table, what is the gross domestic product in this economy?

Use table below to answer the following questions

Personal Consumption Spending ------------------------------- $600

Domestic Investment Spending ---------------------------------$300

Imports . ----------------------------------------------------------$40

Exports -----------------------------------------------------------$20

Local Government purchases of goods and services ----------$300

Federal Government purchases of goods and services --------$200

$1380

A farmer sells cucumbers to a food processor for $1.50 per pound. The food processor makes the cucumbers into pickles and sells each jar of pickles to a grocery store for $2.50. The grocery store sells each jar of pickles for $3.00. How much do these transactions add to GDP

$3.00

Which of the following examples is classified as consumption spending that would be counted towards the United States GDP this year?

The purchase of a computer by a high school student

Which of the following would be classified as investment spending that would be counted toward this year's GDP?

Danielle purchased a new oven for her restaurant

Which of the following is NOT considered a part of this year's GDP?

A college student buys a USED textbook

Which of the following transactions would cause an increase in a nation's gross domestic product?

A school district purchases a new computer for the library

An automobile is produced in 2017, but it is not sold until 2018. How is this automobile counted in GDP?

It is included in GDP as investment spending in 2017

Real GDP is nominal GDP adjusted for...

inflation

If real GDP for a given year is $1000 and nominal GDP is $1500, then the GDP deflator is...

150

The labor force is comprised of...

the employed and unemployed added together

Which of the following individuals is considered officially unemployed?

Madison, who resigned from her job at a hardware store to find work as a carpenter

Which of the following groups is considered officially unemployed?

People who were fired from a previous job but are actively seeking a new job

Based on the data in the table below, what is the unemployment rate for Economy ABC?

Labor Market Data for economy ABC (in millions of persons)

Population ------------------------------ 175

Employed ------------------------------- 93

Unemployed ---------------------------- 7

Not in Labor Force --------------------- 75

7.0%

If the actual rate of unemployment is 7.0% and the natural rate of unemployment is 5.0% then which of the following is necessarily true?

Labor Market Data for economy ABC (in millions of persons)

Population ------------------------------ 175

Employed ------------------------------- 93

Unemployed ---------------------------- 7

Not in Labor Force --------------------- 75

The cyclical unemployment rate is 2.0%

What does the Consumer Price Index (CPI) measure?

The prices of a specific sample of goods and services purchased by consumers.

(the goods basket) They pick random items and see what their price is/ has been among the years.

Based on the data in the table below, what is the inflation rate from Year 2 to Year 3

The Consumer Price Index

Year CPI

1 ------------------- 75

2 ------------------- 100

3 ------------------- 110

4 ------------------- 125

5 ------------------- 150

10 percent

If an economy has experienced unanticipated inflation, which of the following groups has most likely benefitted?

Homeowners who have fixed-rate mortgages

(lenders hurt, borrowers helped)

Tonya earned a 5% raise in her wage during the last year. Prices in the economy have increased by 3% during the past year. Given this information, Tonya's real wage has...

increased by 2%

If the consumer price index rises from 100 to 200, then which of the following is true

the prices in the average consumer's market basket have doubled