Question 1

Which of the following is NOT included in the calculation of GDP using the expenditure approach?

Accepted Answer

Purchases of used goods

Question 2

Suppose the nominal GDP of a country increased from $$\1$$,000$$ billion to $$\$$1,100$$ billion in one year, while the GDP deflator increased from $$100 to$$ $$110. $$What is the real GDP growth rate?

Accepted Answer

$$0\%$$

Question 3

Which of the following best describes the difference between nominal and real variables?

Accepted Answer

Nominal variables are measured in current prices, while real variables are measured in constant prices.

Question 4

If the unemployment rate is $$6\%$$ and the natural rate of unemployment is $$4\%$$, what can be inferred about the economy?

Accepted Answer

The economy is experiencing cyclical unemployment.

Question 5

Which of the following is a limitation of using GDP per capita as a measure of standard of living?

Accepted Answer

It does not account for income distribution among the population.

Question 6

The business cycle is best described as:

Accepted Answer

Fluctuations in real GDP around its long-term trend.

Question 7

If the Consumer Price Index (CPI) increases from $$200 to$$ $$210$$ over a year, what is the annual inflation rate?

Accepted Answer

$$5\%$$

Question 8

Which of the following is an example of structural unemployment?

Accepted Answer

A factory worker loses their job because their skills are no longer needed due to automation.

Question 9

Which of the following equations correctly represents the expenditure approach to calculating GDP?

Accepted Answer

$$GDP = C + I + G + (X - M)$$

Question 10

If the labor force is $$150$$ million and $$10$$ million are unemployed, what is the unemployment rate?

Accepted Answer

$$6.67\%$$

Question 11

Which of the following would cause the aggregate demand curve to shift to the right?

Accepted Answer

An increase in consumer confidence leading to higher spending.

Question 12

Which of the following is NOT a component of the natural rate of unemployment?

Accepted Answer

Cyclical unemployment

Question 13

If the U.S. dollar depreciates relative to other currencies, what is the likely effect on U.S. net exports?

Accepted Answer

Net exports will increase.

Question 14

Which of the following best explains why the CPI may overstate the true rate of inflation?

Accepted Answer

It does not fully account for consumers substituting cheaper goods.

Question 15

Suppose the actual unemployment rate is below the natural rate of unemployment. What is the most likely phase of the business cycle?

Accepted Answer

Expansion (boom)

Question 16

Which of the following is a real variable?

Accepted Answer

Real GDP

Question 17

If the labor force participation rate increases while the unemployment rate remains constant, what must be true?

Accepted Answer

The number of people employed has increased.

Question 18

Which of the following would be counted as part of U.S. GDP?

Accepted Answer

A new car produced in Michigan and sold to a Canadian buyer.

Question 19

If the GDP deflator is $$120$$ and nominal GDP is $$\2$$,400$ billion, what is real GDP?

Accepted Answer

$$\2$$,000$ billion

Question 20

Which of the following best describes frictional unemployment?

Accepted Answer

Unemployment that occurs when people are between jobs or entering the labor force.

Macroeconomics: Monitoring the Macroeconomy – Study Guide

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