Q: Suppose the labor force is 162,848 thousand and the number of unemployed is 7,239 thousand. What is the unemployment rate?

$$\frac{7,239}{162,848} \times 100 = 4.45\%$$

Question 1

Which of the following best describes the concept of opportunity cost?

Accepted Answer

The value of the next best alternative that must be forgone to undertake an activity.

Question 2

Suppose the price of coffee increases. According to the substitution effect, what is likely to happen to the demand for tea, a substitute good?

Accepted Answer

The demand for tea will increase.

Question 3

Which of the following is NOT included in the calculation of GDP using the expenditure approach?

Accepted Answer

Purchases of used goods

Question 4

Given the following data from Table 3.2: Personal Consumption Expenditures (C) = $$15,741.3 billion, Gross Domestic Private Investment (I) = 4$$,119.9 billion, Government Consumption Expenditures and Gross Investment (G) = $$4,052.0 billion, Net Exports (NX) = Exports (2$$,478.3 billion) - Imports ($3,396.5 billion). What is the value of GDP?

Accepted Answer

$$20,516.7$$ billion

Question 5

Using the income approach and the following data: wages = $$500 billion, rent = 50 $$billion, interest = $$40 billion, profits = 120 $$billion, depreciation = $$30 billion, indirect taxes minus subsidies = 20 $$billion. What is GDP?

Accepted Answer

$$760$$ billion

Question 6

Which of the following best explains why GDP excludes the value of intermediate goods?

Accepted Answer

Including intermediate goods would result in double counting.

Question 7

If the nominal GDP in 2020 is calculated using the data: Haircuts (95 × $$15), Apple juice (80 × 6.50$$), Jeans (125 × $$28), Apples (175 × 2.75$$), what is the nominal GDP for 2020?

Accepted Answer

$$6,926.25$$

Question 8

Which of the following is a shortcoming of using GDP as a measure of economic well-being?

Accepted Answer

GDP does not account for household production.

Question 9

Suppose the labor force is 162,848 thousand and the number of unemployed is 7,239 thousand. What is the unemployment rate?

Accepted Answer

$$\frac{7,239}{162,848} 	imes 100 = 4.45\%$$

Question 10

Which of the following would cause a rightward shift in the demand curve for gym memberships?

Accepted Answer

A new study showing significant health benefits from regular exercise.

Question 11

If the CPI in Year 1 (base year) is 100, the cost of the basket in Year 2 is $$115.69, and the cost in Year 1 is 100$$, what is the inflation rate from Year 1 to Year 2?

Accepted Answer

$$15.69\%$$

Question 12

Which of the following best describes structural unemployment?

Accepted Answer

Unemployment caused by a mismatch between workers' skills and the skills needed for available jobs.

Question 13

If the nominal interest rate is $$5\%$$ and the inflation rate is $$3\%$$, what is the real interest rate?

Accepted Answer

$$2\%$$

Question 14

Which of the following is an example of a government policy that would increase supply in a market?

Accepted Answer

Providing subsidies to producers.

Question 15

If the labor force participation rate is calculated as $$\frac{Labor\ Force}{Working\ Age\ Population} 	imes 100$$, and the labor force is 162,848 thousand while the working age population is 274,858 thousand, what is the labor force participation rate?

Accepted Answer

$$59.3\%$$

Question 16

Which of the following would NOT be counted in the U.S. GDP?

Accepted Answer

A used car sold by a private owner in Texas.

Question 17

If the price of a complementary good (e.g., phone chargers) increases, what happens to the demand for the related good (e.g., smartphones)?

Accepted Answer

The demand for smartphones decreases.

Question 18

Which of the following is a reason why the official unemployment rate may understate the true level of unemployment?

Accepted Answer

It excludes discouraged workers.

Question 19

If the cost of a basket of goods in Year 1 is $$51, in Year 2 is 59$$, and in Year 3 is $67.5, what is the CPI for Year 3 using Year 1 as the base year?

Accepted Answer

$$132.35$$

Question 20

Which of the following best describes allocative efficiency?

Accepted Answer

Production is in accordance with consumer preferences.

Macroeconomics Study Guide: GDP, Unemployment, and CPI Calculations

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