Econ 214 Quiz 1
1. In 2008, in the US the 4 components of GDP matched up with their relative importance as follows: C 70 percent of GDP 12 percent of GDP and 21 percent of GDP X: -3 percent of GDP
2. Which of the following would contribute to GDP? A Canadian company produces goods in the united states
3. Which one of the following events will reduce GDP? An automobile manufacturer lays off 200 workers as the result of a firm in the paint shop.
4. Suppose the CPI was 95 in 1955 and suppose currently the CPI is 475. According to the CPI $100 today purchase the same amount of goods and services as — 20.00 purchased in 1955
5. A firm purchases $600,000 worth of raw materials and pays wages and salaries of 100,000 and dividends of 200,000. If the firm sells its output for 1 million the firms value added to GDP is —400,000
6. If a small municipal government buys 5000 worth of business supplies, spends 55,000 to hire an administrator, and spends 26000 for a new automobile used by the administrator, this municipal governments contribution to GDP is 86000
7. Anna a us citizen, working only in Germany. The value she adds to production in Germany is included in german but it is not included in US GDP
8. Which of the following would increase GDP—your car is damaged by a fire, and you hire a mechanic to repair it
9. List of things—- what is this countrys gross domestic product? 1,365
10. Your father tells you he earned 3.00 per hour when he was 18 in 1977 you remember making 6.00 per hour when you were 16 in 1999. Given that the CPI was 36.7 in 1969 and 166.1 in 2007 which of the following is the 2007 real equivalent of your fathers hourly earning when he was 16? 13.58
11. Actual GDP will be below potential GDP during a recession
12. A person who argues that inflation “robs us of the purchasing power of our paychecks” should also consider that—will increase the size of our paycheck as well as the prices of goods
13. What is the employment/population ratio of the economy? 60 percent
14. Jamal now age 54 lost his job. He was very specialized skills that are no longer demand Jamal’s unemployed—structural
15. Which of the following would be classified as unemployed—a 20-year old looking for her first job.
16. Full employment—will always include some unemployment
17. During an economic boom, the output of the economy will exceed its long-run potential output
18. Which of the following is true? Actual output may be either above or below potential output depending on how fully resources are utilized.
19. Which of the following will most likely reduce the natural rate of unemployment? An increase in the proportion of prime-age workers as a share of the labor force
20. At the beginning of a year, decision makers expect the general level of prices to increase at a 5 percent annual rate— decision makers anticipated accurately the inflation that occurred during the year.
21. If expected inflation is constant then when the nominal interest rate increase, the real interest rate increased by the change in the nominal interest rate.
22. The change in the aggregate quantity of goods and services demanded in the US is based on the logic that—WRONG
23. If the actual price level exceeds the expected price level reflected in long-term contracts, many firms will find production more profitable than they had expected and will increase.
24. The aggregate demand curve slopes downward indicating that an increase in the general price level will reduce the aggregate quantity of goods and services
25. American needing foreign currencies get those currencies from a bank. The ultimate source of these currencies — US sales to foreign countries
26. The aggregate supply curve indicates the quantity of goods and services producers will supply at different price levels
27. Other things constant, a decrese in aggregate demand will lead to a decrease in the demand for resources
28. Suppose business decision makers become more optimistic about future economic conditions and desire- the demand for loanable funds will increase, and he interest rate will rise
29. The exchange rate is the price of ones nations currency in terms of the currency of another nation