Recent Question

If in 1994 nominal GDP is 540 and real GDP is 500, the price index for 1994 is 1. Suppose nominal GDP is $566 billion in 1986, $600 billion in 1987 and $642 billion in 1988. If 1986 is the base year, the price index is 105 in 1987, and real growth in 1988 is 3%, from this information, the price index in 1988 is a) less than 109 b) 109 c) greater than 109 but less than 110 d) 110 or over 2. Suppose hamburgers cost $1.20 last year and ...

Other / Other 07 May 2016

How does this inventory change appear in the GDP calculation when adding up all expenditures 1. Which of the following raises measured GDP a) you are hired by GM to shuffle paper uselessly for $200 b) a steel company sells some steel to an automobile manufacturer c) you are hired by the government to shuffle paper uselessly for $200 d) both a) and c) above 2. "But economists believe that one of the most important sources of bias ...

Other / Other 07 May 2016

Which of the following causes the labor force to grow more slowly 1. "Employment is projected to revive at 3.5 percent per year. Since the trend rate of increase in the labor force is just less than 2 percent per year, that would seem to produce a healthy decline in the unemployment rate of 1.5 percentage points per year. Unfortunately, that probably won't happen." It may not happen because of a) part-time workers b) discouraged workers ...

Other / Other 07 May 2016

The most probable reason why consumer spending increased by more than taxes were reduced 1. "I promise to reduce the federal deficit. That means reducing federal expenditures and, if necessary, increasing taxes. Under present conditions of full employment and steady prices, we can afford to bear the burden of this debt now instead of passing it on to 18 our grandchildren." If the policies of this politician were adopted, what effects wo ...

Other / Other 07 May 2016

Why will this policy affect Canada 1. "Some claim that the fact that both deficits and unemployment have increased together since 1979 proves that fiscal stimulus doesn't work. It's true that our jobless rate rose from 1979 to 1984 while the federal deficit doubled as a percentage of GDP. But the inference about the ineffectiveness of fiscal stimulus is nevertheless wrong, because ......" Complete the argument about to be developed here ...

Other / Other 07 May 2016

If the government increases spending by 8 billion dollars, the budget deficit will 1. If "the" multiplier is 5 and income increased by $65 billion, the increase in autonomous spending must have been a) $11 b b) $13 b c) $325b d) $0.077b 2. If "the" multiplier is 4 and the government wants to increase the level of income by $30 billion, it should increase government spending by a) $4b b) $7.5b c) $30b d)$120b 3. Suppose that the inco ...

Other / Other 07 May 2016

An example of bias in the CPI measure is 1. "He claimed that a better measure of Turkish national income could be obtained by including money sent back to their families by Turks living and working in Germany, something that is currently ignored in the national accounts." This income is a) included in Turkish GDP b) included in Turkish GNP c) included in both Turkish GDP and GNP d) completely ignored in the Turkish accounts 2. "Th ...

Other / Other 07 May 2016

Economists would refer to this situation as a high 1. "In the U.S. or Britain, economic recoveries put people back to work relatively quickly. But Germany is bogged down by high labor costs and other structural factors that discourage hiring. So the recent unemployment rate of 11.4% is not likely to fall by much in the near future." Economists would refer to this situation as a high a) natural rate of unemployment b) cyclical rate of un ...

Other / Other 07 May 2016

How many officially unemployed are there 1. If the population over 15 years of age is 160 million, the number of discouraged workers is 10 million, the labor force is 110 million and total employment is 90 million, then the measured unemployment rate is a) less than 10% b) 10% c) greater than 10% but less than 15% d) 15% or more 2. Suppose the population over age 15 is 160 million, the number of discouraged workers is 5 million, the p ...

Other / Other 07 May 2016

If the price index is 120 in 1989 and 150 in 1990, what is the rate of inflation 1. From the data below, the official measure of GDP is a) below 100 b) between 100 and 103 c) between 104 and 107 d) above 107 Personal Consumption Expenditures 62.0 Depreciation 5.0 Indirect Business Taxes less Subsidies 1.0 Gross Private Domestic Investment 15.0 Exports 12.0 Government Purchases of Goods and Services 20.0 Government Transfer ...

Other / Other 07 May 2016