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Practice Exam II

Last updated almost 2 years ago

18 questions

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Question 1

1.

The official unemployment rate may understate the true rate of unemployment because of

workers who hold two jobs

increases in worker productivity

changes in wage rates

discouraged workers who no longer are actively seeking work and are excluded from the statistics.

Question 2

2.

Increases in the duration of unemployment may

reflect a general downturn in economic activity that depresses job opening 

increase the number of discouraged workers

increase the unemployment rate

all of the above

Question 3

3.

If a person loses her job because her abilities and skills are a poor match with current requirements of employers, this person is considered

structurally unemployed

frictionally unemployed

discouraged worker 

seasonally unemployed

Question 4

4.

Cyclical unemployment occurs when

individuals enter the labor market and make the rounds of potential employers.

individuals with skills no longer valued in the domestic labor market cannot find employment.

individuals give up the search for employment.

a downturn in economic activity increases employment.

Question 5

5.

The formula for computing a basic price index is

(cost of market basket today/cost of market basket in base year) ´ 100.

(cost of market basket in base year/100) ´ cost of market basket today.

(cost of market basket in base year/cost of market basket today) ´ 100.

(100/cost of market basket in base year) + cost of market basket today.

Question 6

6.

The Consumer Price Index attempts to measure

the average of raw material prices paid by producing firms

the level of prices with respect to goods and services purchased by a typical consumer in urban areas

the level of prices with respect to goods and services purchased by retired couples in rural areas

hourly wages rate of manufacturing workers

Question 7

7.

During a recession

income rise and employment decreases

income fall and employment increases

incomes fall and unemployment fall

incomes rise and unemployment increases

Question 8

8.

To be officially unemployed a person must:

be in the labor force

be 21 years of age or older

have just lost a full time job

be waiting be called back from a layoff

Question 9

9.

Which of the following would most likely be sold in the product market?

a new car

stocks and bonds

iron ore

entrepreneurial ability

Question 10

10.

Economist consider profit to be

a cost of producing goods and services

the same as a salary

a reward for incurring losses

something that should be eliminated by antitrust laws

Question 11

11.

The total market value of final goods and services produced in an economy during a one year period is

gross domestic product

net national product

profit

personal income

Question 12

12.

One method of calculating GDP is to add together

investment, consumption, gross profits, and net exports

consumption, investment, government spending, and net exports

wages, gross profits, net investment, and net exports

consumption, wages, interest, rental income, and exports

Question 13

13.

When economists discuss the nominal value of an economic variable, the variable is

expressed in current dollar

expressed as an index figure

adjusted for a changing price level

expressed as a percentage

Question 14

14.

Economics growth is usually defined as

the rate of increase in the output divided by the increase in labor

the increase in output over time, as measured by real per capita GDP

the increase in input avaliability

the reduction in the real cost of necessities

Question 15

15.

When a nation's real per capita GDP increases, which of the following is true?

Every individual in that nation's shares in the economic gain

A national must channel most of the economic gains to its poorest citizens.

Low income people are guaranteed to lose; they never share in their nation's economic gains.

We don't know who has most benefited form economic growth unless we look at distribution of income

Question 16

16.

Which of the following transaction is included in GDP?

Money borrowed by a college student from her parents 

Money paid by a college student to buy a new car

Money given to a family on welfare

Social Security checks received by an elderly couple

Question 17

17.

Real GDP generally increases over the long term because

investment in new factory machinery are usually more productive than the old machinery

investments in new factory machinery are usually more expensive than the old machinery

prices tend to increase over time

all of the above are possible

Question 18

18.

Imagine that you have learned that nominal GDP increased by 5% last year over the previous year and that the economy produced exactly the same quantities of goods and services as the previous year. This tells you that:

prices rose by 5%

prices fell by 5%

real GDP rose by 5%

real GDP fell by 5%