Question

6) in the U.S., which is not a specific stated goal of Government policies?:

a) price stability

b) full employment

c) growth

d) social well-being (welfare, or "happiness")

7) The unemployment rate is defined as:

a) civilian labor force/civilian non-institutional population

b) unemployed/civilian labor force

0) discouraged workers/civilian labor force

d) none of the above ,

8) The term "final goods" refers to:

a) raw materials

b) goods whose value has been adjusted for changes in the price level

c) goods available to be purchased in their initial completed form, as opposed

to further processing or resale

d) the goods produced in the economy at the end of each fiscal year

9) The Labor Force Participation Flate:

a) has decreased for men, but increased for women in recent years

b) fails when persons retire

c) when it is rising" increases the prospects for economic growth ‘

d) all of the above ‘

10) Which of the following is classified under "Investment" in GDP ‘

Expenditure accounting?: ‘

a) the Government's purchase of an office building i

b) Lady Gaga's purchase of 100 shares of Apple stock from Bradley Cooper ‘

c) construction of new suburban housing

d) the City of Concord's construction of a sewer treatment plant ‘

e) a, c and d l

11) The term "real GDP" refers to" ‘

3) GDP data that reflect changes in the price level. but not changes in ‘

production ‘

b) GDP data that reflects changes in both production and the price level

C) GDP data that changes in production. but not changes in the price level

12) GDP is:

a) a measure of economic growth, generally associated with rising incomes

and standards of living s

b) a measure of inflation ,

c) a measure of employment ‘

13) "Transier payments", such as social security, veterans' benefits,

unemployment benefits?

a) are not included in calculating Expenditure GDP

b) are not considered payments for current production

c) will be included when calculating the overall federal budget

d) all of the above

14) During periods of inflation, there are "winners" and "losers". Losers

include: ‘

a) holders of cash and monetary assets

b) creditors

c) bondholders who receive fixed interest payments

d) all of the above ‘

e) none of the above ‘

15) Bob found a seed and planted an orange tree. He hired Harry at $5 to pick ,

the oranges Bob sold the oranges to Jim for $8, who, at this next stage of ‘

production, transformed it into orange juice. Finally, Carol expended $10 for l

the orange juice. This example illustrates the following approach(es) to }

calculating GDP. ‘

a) expenditure

b) income

c) value—added

d) all of the above

16) A US. car manufacturer located in Germany sells cars manufactured in

2018 to German citizens in 2018. This transaction is:

a) included in GDP, because a US. producer is involved

b) excluded from GDP, because it takes place outside US borders

c) included in GDP when the U.S,-owned Hamburg plant sends money back to

Detroit ,

17) The price of pepsi rises...what will happen to the demand for coke:

a) the quantity demanded of coke will Increase

b) more coke will be sold at each price

c) the demand curve tor coke will shift to the right

d) the demand curve for coke will shift to the left .

e) b and c

.18) Which items are included in GDP?:

a) sales of crack cocaine on a street corner next to Peel's coffee '

b) a prostitute‘s legal earnings at the Bunny Ranch is Nevada, for which she

receives a w-2 tax form .

c) government payments for food stamps to an unemployed worker

d) Medi-Cal payments to an impoverished California family

e) none of the above

19) The number of sellers of a good decreases This will cause the supply

curve to shift to the ----- . Equilibrium price will ----- and equilibrium quantity

Will ----- .

a) left; tall; rise

b) left; rise; fall

c) right; fall: fall

20) Deflation means prices and is associated with .

a) rising; economic booms

b) falling; recessions and depressions I

c) rising; recessions and depressions

21) The US. has full employment it unemployment is only the sum of:

a) frictional and structural unemployment

b) frictional and cyclical unemployment

c) structural and cyclical unemployment

22) Housewives/husbands are:

a) Included In the labor force

b) unemployed

c) excluded from the labor force

d) necessarily considered "discouraged workers"

23) Bill is looking for work, but all the steel mills have permanently shutdown

in Bill's Ohio county. He has no transferable job skills. Bill’s unemployment is

called:

a) structural

b) lrictional

c) seasonal

d) cyclical

24) GDP

a) is an excellent indicator of social well-being

b) includes illegal activities. calculated from crime statistics

c) includes housewife services, valued at minimum wage

d) none oi the above

25) The US. Consumer Price Index (CPI):

a) is an index with a base of 100

b) is based on a survey of spending by typical urban households

0) has as its base the average of the three years: 1982-84

d) all of the above

e) a and b only

ANSWER THE FOLLOWING QUESTIONS AS TRUE OFI FALSE

26) Laid off workers, waiting to be called back, are not counted as

unemployed

a) T V

b) F

27) Discouraged workers are counted as unemployed

a) T

b) F

28) Full—Employment is synonymous with Natural Unemployment

a) T

b) F

29) What foreigners produce while working in the US, is counted as part of

us. GDP

a) T .

b) F

30) A price ceiling above the equilibrium price will cause a shortage in housing

a) T

b) F

31) ln year 1, Dave earns $100,000; in year2, $115,000. The CPI in year 1 is 100 in year 2 is 110. From year 1 to 2, in “real” terms, Dave is better off.:

a) true

b) false

32) The unemployment rate and employment rate do not add up to 100%

a) T

b) F

33) It the City imposes a minimum wage of $7 When the market Prlce 0

Food workers is $8. the City action will not have any effect

a) T

b) F

34) The value~added approach to calculating GDP is the sum of payments to

the tactors ot production

a) T

b) F

35) Real wages increase only it the percentage increase in nominal wages is

greater than that the percentage increase in the CPI.

a) T

b) F

Answer 1

Ans) 1) Government makes policies to bring stability in the economy, increase employment, bring growth and for social well being. But the aim of government is never full employment as full employment will lead to high inflation in the economy.

Option b.

2) Employed are those who work for profit or pay. Both full time and part time workers are considered as employed.

Unemployed are those who are not working anywhere but are actively looking for job. According to this definition those who are not looking for job are not considered as unemployed.

Labour force = employed + unemployed

Unemployment rate = (unemployed ÷ labour force)×100

Option b.

3) Final goods are those which do not go for further processing. Eg- tyre is an intermediate good (because it can be resold to manufacturing company) while car is final good (as it does not need further processing), wheat is an intermediate good while bread is a final good etc.

Option c.

4) Labour force participation rate = (labour force ÷ working age population)×100

In recent years it is seen that participation of men has declined due to spending of more years in college, having privilege to spend time at home as stay at home dads etc. While it is seen that participation of women has increased may be due to inventions like washing machines, mixer grinder, oven etc which has reduced the burden of household work.

Option a.

(As per rules and time constraint only one question is allowed. However I have answered first four. Kindly ask other questions separately. Thank you. )