Q: If nominal GDP in 2022 is $$12 trillion and real GDP is 10 $$trillion, what is the GDP deflator?

$$GDP\ Deflator = \frac{Nominal\ GDP}{Real\ GDP} \times 100 = \frac{12}{10} \times 100 = 120$$

Q: If the unemployment rate is 6% and the labor force is 50 million, how many people are unemployed?

$$Unemployed = Unemployment\ Rate \times Labor\ Force = 0.06 \times 50,000,000 = 3,000,000$$

Question 1

Which of the following would cause a movement along the demand curve for coffee?

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 outcome in the labor market?

Accepted Answer

An increase in the quantity of labor supplied and a decrease in the quantity of labor demanded, resulting in unemployment.

Question 3

Which formula correctly calculates GDP using the expenditure approach?

Accepted Answer

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

Question 4

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

Accepted Answer

The supply curve for apple juice shifts to the left.

Question 5

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

Accepted Answer

GDP includes the value of leisure time.

Question 6

If nominal GDP in 2022 is $$12 trillion and real GDP is 10 $$trillion, what is the GDP deflator?

Accepted Answer

$$GDP\ Deflator = \frac{Nominal\ GDP}{Real\ GDP} 	imes 100 = \frac{12}{10} 	imes 100 = 120$$

Question 7

Which of the following best describes frictional unemployment?

Accepted Answer

Unemployment due to workers voluntarily changing jobs.

Question 8

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

Accepted Answer

A shift of the supply curve to the right.

Question 9

If the labor force is 80 million and the working-age population is 100 million, what is the labor force participation rate?

Accepted Answer

$$Labor\ Force\ Participation\ Rate = \frac{Labor\ Force}{Working\ Age\ Population} 	imes 100 = \frac{80}{100} 	imes 100 = 80\%$$

Question 10

Which of the following is directly counted in GDP?

Accepted Answer

A pizza purchased by a consumer.

Question 11

If the unemployment rate is 6% and the labor force is 50 million, how many people are unemployed?

Accepted Answer

$$Unemployed = Unemployment\ Rate 	imes Labor\ Force = 0.06 	imes 50,000,000 = 3,000,000$$

Question 12

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

Accepted Answer

An increase in the price of gasoline.

Question 13

If the Consumer Price Index (CPI) was 120 in 2000 and 150 in 2001, what was the inflation rate for 2001?

Accepted Answer

$$Inflation\ Rate = \frac{CPI_{2001} - CPI_{2000}}{CPI_{2000}} 	imes 100 = \frac{150 - 120}{120} 	imes 100 = 25\%$$

Question 14

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

Accepted Answer

Real values are adjusted for inflation, while nominal values are not.

Question 15

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

Accepted Answer

There will be a surplus and the price will fall.

Question 16

Suppose the base year is 2012. In 2023, Good A sells 500 units at $$15 each and Good B sells 1000 units at 11 $$each. In 2012, Good A sold for $$12 and Good B for 10. $$What is the Consumer Price Index (CPI) for 2023?

Accepted Answer

$$CPI = \frac{(500 	imes 15) + (1000 	imes 11)}{(500 	imes 12) + (1000 	imes 10)} 	imes 100 = \frac{(7500 + 11000)}{(6000 + 10000)} 	imes 100 = \frac{18500}{16000} 	imes 100 = 115.625$$

Question 17

Which of the following is an example of structural unemployment?

Accepted Answer

A factory worker who loses their job because the factory relocates overseas.

Question 18

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 19

Which phase of the business cycle is characterized by rising GDP, falling unemployment, and increasing consumer confidence?

Accepted Answer

Expansion

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

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