Question 1

Which of the following would cause a movement along the demand curve for coffee, rather than a shift of the demand curve?

Accepted Answer

A decrease in the price of coffee.

Question 2

If the government imposes a minimum wage above the equilibrium wage, what is the most likely result in the labor market?

Accepted Answer

A surplus of labor, or unemployment.

Question 3

Suppose the price of apples increases. What is the most likely effect on the market for apple juice?

Accepted Answer

The supply curve for apple juice shifts to the left.

Question 4

Which of the following is NOT a shortcoming of GDP as a measure of economic well-being?

Accepted Answer

GDP includes the value of illegal transactions.

Question 5

If nominal GDP in 2023 is $$22 trillion and the GDP deflator is 110, what is real GDP in 2023? Use the formula $$ 	ext{Real GDP} = \frac{	ext{Nominal GDP}}{	ext{GDP Deflator}} 	imes 100 $.

Accepted Answer

$$20$$ trillion

Question 6

Which of the following would cause the demand curve for electric cars to shift to the right?

Accepted Answer

An increase in consumer income, assuming electric cars are normal goods.

Question 7

Suppose the labor force is 150 million, the number of employed is 140 million, and the working-age population is 200 million. What is the unemployment rate? Use $$ 	ext{Unemployment Rate} = \frac{	ext{Unemployed}}{	ext{Labor Force}} 	imes 100 .$$

Accepted Answer

$$6.7\%$$

Question 8

Which of the following best describes structural unemployment?

Accepted Answer

Unemployment caused by a mismatch between workers’ skills and the requirements of available jobs.

Question 9

If the Consumer Price Index (CPI) was 120 in 2020 and 132 in 2021, what was the inflation rate in 2021? Use $$ 	ext{Inflation Rate} = \frac{	ext{CPI}_{2021} - 	ext{CPI}_{2020}}{	ext{CPI}_{2020}} 	imes 100 .$$

Accepted Answer

$$10\%$$

Question 10

Which of the following is directly included in the calculation of GDP using the expenditure approach?

Accepted Answer

The purchase of a new car by a household.

Question 11

A technological advancement in the production of smartphones would be represented by:

Accepted Answer

A rightward shift of the supply curve.

Question 12

If the price of a product is set above the equilibrium price, what will occur in the market?

Accepted Answer

A surplus will develop.

Question 13

Which of the following best describes the value-added approach to calculating GDP?

Accepted Answer

Summing the value added at each stage of production for all goods and services.

Question 14

Suppose the working-age population is 200 million, the labor force is 120 million, and 110 million are employed. What is the labor force participation rate? Use $$ 	ext{Labor Force Participation Rate} = \frac{	ext{Labor Force}}{	ext{Working-Age Population}} 	imes 100 .$$

Accepted Answer

$$60\%$$

Question 15

If the economy is in a recession, which phase of the business cycle is it experiencing?

Accepted Answer

Contraction

Question 16

The Rule of 70 is used to estimate:

Accepted Answer

The number of years it takes for a variable to double, given its annual growth rate.

Question 17

If the CPI in 1950 was 24 and in 2020 it was 260, what is the real value in 2020 dollars of a $$2,400 salary earned in 1950? Use $$ 	ext{Real Value} = 	ext{Nominal Value} 	imes \frac{	ext{CPI}_{2020}}{	ext{CPI}_{1950}} $.

Accepted Answer

$$26,000$$

Question 18

Which of the following is an example of frictional unemployment?

Accepted Answer

A recent college graduate searching for their first job.

Question 19

If the price of oranges rises and oranges are an input in orange juice, what happens to the supply curve for orange juice?

Accepted Answer

It shifts to the left.

Question 20

Which of the following would NOT be included in the calculation of GDP using the income approach?

Accepted Answer

Transfer payments such as Social Security.

Macroeconomics Study Guide: Markets, GDP, Unemployment, and Business Cycles

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