1. If the price of housing (which accounts for roughly 40% of total expenditures in the CPI basket) rises by 15% in one year while the prices of all other goods rises by 25%, by how much will the CPI rise by given this information? A. 10% B. 12% C. 15% D. 21%
2. If nominal GDP is $6,039 billion and the price index for the CPI is 110.1, given this information what would be real GDP? A. $6,648 billion. B. $6,039 billion. C. $5,485 billion. D. $4,200 billion.
3. If substantially more foreign money is invested in Mexico than Mexican citizens have invested abroad in other countries, then one will likely expect: A. Mexican GDP to exceed Mexican GNP. B. Mexican net foreign factor income to be positive. C. Mexican net foreign factor income to be zero. D. Mexican GNP to exceed Mexican GDP.
4. GDP measures the economic activity that occurs within a country regardless of who owns the resources, GNP measures the economic activity of the citizens and businesses of a country. True or False?
5. Classicals would agree that usually: A. all unemployment can be generally attributed to frictional unemployment. B. frictional unemployment is only a small part of total unemployment. C. structural and cyclical unemployment are more common than frictional unemployment. D. society owes a person a job commensurate with his or her training.