Assignment:
1) Suppose that instead of Greg not mowing his lawn, he pays his son $10.00 cash. By how much would GDP change?
A) $0
B) $10
C) -$10
D) Not enough information provided
2) Suppose that instead of Greg buying his lunch at a fast-food restaurant for $15.00, he buys $5 worth of food at the grocery store and spends an hour of his time creating his lunch. By how much would GDP change?
A) -$10
B) -$15
C) $5
D) Not enough information provided
3) Suppose that instead of Greg not mowing his lawn, he pays a lawn care business $20.00. He had to buy $5 in gas and took 1 hour of his time when he did it himself. By how much would GDP change?
A) $0
B) $15
C) $20
D) Not enough information provided
4) An electrician accepts payment only in cash to avoid taxes. If he is paid $100, ________.
A) the GDP of his country will increase
B) the GDP of his country will fall
C) the trade surplus of his country will increase
D) the GDP of his country will remain unchanged
5) Jack exported a rare painting illegally. This transaction will ________.
A) cause the GDP of his country to increase
B) cause the GDP of his country to decrease
C) not affect the calculation of his country's GDP
D) cause an increase in the GDP of the country he has exported it to
6) A Japanese businessman opened an automobile showroom in Singapore this year. His income led to a(n) ________.
A) increase in the GDP of Japan
B) decrease in the GDP of Japan
C) increase in the GDP of Singapore
D) decrease in the GDP of Singapore
7) An Indian student paid $16,000 for a course at a university in the United States. This transaction led to a(n) ________.
A) increase in the GDP of India
B) decrease in India's trade deficit
C) increase in the U.S. GDP
D) decrease in the U.S. GDP
8) The income per capita of a country for a particular year is determined by ________ during that year.
A) dividing its GDP by the total number of goods produced
B) dividing its GDP by the total population of the country
C) multiplying its GDP by the total number of goods produced
D) multiplying its GDP by the total population of the country
9) Which of the following forms the largest share of GDP in the United States when measured using the expenditure method?
A) Investment
B) Government expenditure
C) Consumption
D) Foreign expenditure on domestic goods
10) Which of the following is a reason for the rise in U.S. trade over the past 80 years?
A) Falling consumption expenditure
B) Rising government expenditure
C) Improved transportation technology
D) Improved bureaucracy
11) In 2015, which category made up the smallest share of U.S. GDP?
A) Consumption
B) Investment
C) Government spending
D) Net exports
12) How is income per capita calculated?
A) Dividing a nation's aggregate income by the number of people in the country
B) Averaging the individual incomes of all working people
C) Dividing GDP by the number of households
D) None of the above
13) What is necessary for an economic downturn to be classified as a recession?
A) The unemployment rate reaches 10 percent
B) Negative inflation for one year
C) Negative economic growth for one year
D) Aggregate economic output falls for two consecutive quarters
The following table contains statistics for the country of Caddyville in 2013.
|
Population
|
140,000
|
|
Children under 18
|
28,000
|
|
Students in Secondary education
|
7,000
|
|
Age 65 and over
|
24,000
|
|
Not looking for work
|
14,000
|
|
Unemployed
|
4,800
|
|
GDP (national income)
|
$10 billion
|
14) Refer to the table above. What is Caddyville's per capita income for 2013?
A) $52,935
B) $61,067
C) $71,429
D) $87,532
15) Refer to the table above. What is the size of the labor force in Caddyville for 2013?
A) 62,200
B) 67,000
C) 74,000
D) 88,000
16) Refer to the table above. What is the unemployment rate in Caddyville for 2013?
A) 5.5 percent
B) 6.5 percent
C) 7.2 percent
D) 7.7 percent
17) Refer to the table above. What will the labor force be in 2014 for Caddyville if 3,000 people turn 65, 2,000 students graduate from college, 4,000 children turn 18 and don't go to college, and the number of unemployed changes to 4,950? All else remains unchanged.
A) 65,200
B) 67,000
C) 70,000
D) 74,150
18) Refer to the table above. What is the unemployment rate in 2014 for Caddyville if 3,000 people turn 65, 2,000 students graduate college, 4,000 children turn 18 and don't go to college, and the number of unemployed changes to 4,950? All else remains unchanged.
A) 5.8 percent
B) 6.7 percent
C) 6.9 percent
D) 7.1 percent
19) Double counting occurs when ________ included in the calculation of the GDP.
A) inputs are
B) unsold inventories are
C) depreciation is
D) household production is
20) Which of the following is likely to be included in a country's GDP for a particular year?
A) The total amount of steel used in the production of automobiles in that year
B) An unsold inventory of automobiles produced in that year
C) An unused stock of goods produced in the previous year
D) The total amount of flour used by bakeries to make bread in that year
21) A factory in Techland could not sell 20 percent of its output during a certain year due to a decrease in the demand for its product. Which of the following would be true if it produced 20 percent less?
A) Techland's GDP for that year would have been higher.
B) Techland's GDP would have remained the same.
C) Techland's GDP for that year would have been lower.
D) Techland's income per capita for that year would have been higher.
22 There is only one firm in a small island country. The firm produced 1,000 units of Good X during a particular year, out of which it could sell 900 units. If each unit of the good sells for $500, what is the GDP of the country?
A) $40,000
B) $450,000
C) $500,000
D) $150,000
23) The total value of inputs used in the production of 100,000 units of a good manufactured in a country is $150,000. Assume that the country produces only this good and each unit of the good sells for $10. What is the GDP of the country?
A) $1,000,000
B) $1,150,000
C) $150,000
D) $250,000
24) The circular flow diagram implies that if accounting is done correctly, the market value of ________ the market value of ________.
A) production must exceed; expenditure
B) income must exceed; production
C) expenditure must equal; income
D) expenditure must exceed; income
25) Which of the following is an example of physical capital?
A) A stock
B) A bond
C) A factory
D) A worker