Problem 1. Gross Domestic Product equals the:
- total output of all goods and services produced by resources located in the U.S.
- market value of all goods and services produced by resources located in the U.S.
- market value of all final goods and services produced by resources located in the U.S.
- value added to the economy by intermediate goods and services minus original cost
Problem 2. Which of the following is not considered a component of investment when calculating GDP?
- new residential construction
- construction of new factories
- net increases in inventory
- purchases of corporate stock
Problem 3. Which is true of leakages and injections in the circular flow?
- Leakages minus injections equal GDP.
- Injections minus leakages equal GDP.
- Leakages minus injections equal zero in equilibrium.
- Domestic leakages must equal domestic injections.
Problem 4. Because of activity in the underground economy,
- GDP statistics understate the true volume of economic activity
- GDP statistics overstate the true prices in the economy
- consumers are not as well off as GDP statistics indicate
- firms' profits are higher than GDP statistics indicate
Problem 5. The consumer price index measures changes in:
- the prices of all goods and services
- the prices of goods that are sold
- the total cost of a specific market basket of consumer goods and services
- the total costs of all goods and services
Problem 6. The unemployment rate is the:
- percentage of people in the economy who do not hold jobs
- percentage of the labor force that does not have a job
- number of people in the economy who have given up looking for employment
- number of people in the labor force without jobs
Problem 7. Which of the following people would be classified as unemployed?
- a person who wants a job as a fashion model but cannot find work in that field
- someone who quits a part-time job to attend school full-time
- someone who gives up looking for a job
- a person who works at a job that underemploys his or her skills
Problem 8. Frictional unemployment refers to unemployment that results from
- a mismatch of skills
- being in the wrong geographical location
- taking the time to find the best job
- seasonal decreases in demand for labor
Problem 9. If the aggregate demand curve shifts rightward,
- the price level increases and output decreases
- the resulting increase in the price level is usually called cost-push inflation
- the resulting increase in the price level is usually called demand-pull inflation
- the price level increases only if there is also a leftward shift of the aggregate supply curve
Problem 10. The Consumer Price Index measures the cost of:
- all goods and services produced in the U.S. economy
- all goods produced in the U.S. economy
- a fixed market basket of consumer goods and services produced in the U.S. economy
- a fixed market basket of producer goods and services