w1105 s15 PracticeQuestions final
1) Which of the following would be an example of an intermediate good?
A) An oven purchased by a baker for his business.
B) New tires purchased at your local garage to replace your old ones.
C) A wedding ring purchased by an engineer for his fiancée
D) Flour purchased by a baker to make her cookies.
2) A transfer payment is a payment by the government to an individual
A) for a service.
B) for an investment good.
C) for a consumption good.
D) for which the government does not receive a good or service in return.
3) Investment spending includes spending on
A) stocks.
B) food.
C) changes in business inventories.
D) transfer payments.
4) Emily is a writer. She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000. If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel?
A) $25 million
B) $20 million
C) $500,000
D) $50,000
5) If real GDP increases we know for sure that
A) output has risen.
B) prices have risen.
C) prices have risen but output has remained constant.
D) prices have remained constant.
6) A full-time student who is not working is categorized as
A) unemployed.
B) employed.
C) not in the labor force.
D) a discouraged worker.
7) The short-term unemployment arising from the process of matching workers with jobs is called
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) seasonal unemployment.
8) If consumers purchase fewer of those products that increase most in price and more of those products that decrease in price as compared to the CPI basket, then
A) changes in the CPI accurately reflect the true rate of inflation.
B) changes in the CPI understate the true rate of inflation.
C) changes in the CPI overstate the true rate of inflation.
D) changes in the CPI are unrelated to the true rate of inflation.
9) If workers nominal wages have risen by 50% over a ten-year period and prices have increased by
A) An oven purchased by a baker for his business.
B) New tires purchased at your local garage to replace your old ones.
C) A wedding ring purchased by an engineer for his fiancée
D) Flour purchased by a baker to make her cookies.
2) A transfer payment is a payment by the government to an individual
A) for a service.
B) for an investment good.
C) for a consumption good.
D) for which the government does not receive a good or service in return.
3) Investment spending includes spending on
A) stocks.
B) food.
C) changes in business inventories.
D) transfer payments.
4) Emily is a writer. She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000. If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel?
A) $25 million
B) $20 million
C) $500,000
D) $50,000
5) If real GDP increases we know for sure that
A) output has risen.
B) prices have risen.
C) prices have risen but output has remained constant.
D) prices have remained constant.
6) A full-time student who is not working is categorized as
A) unemployed.
B) employed.
C) not in the labor force.
D) a discouraged worker.
7) The short-term unemployment arising from the process of matching workers with jobs is called
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) seasonal unemployment.
8) If consumers purchase fewer of those products that increase most in price and more of those products that decrease in price as compared to the CPI basket, then
A) changes in the CPI accurately reflect the true rate of inflation.
B) changes in the CPI understate the true rate of inflation.
C) changes in the CPI overstate the true rate of inflation.
D) changes in the CPI are unrelated to the true rate of inflation.
9) If workers nominal wages have risen by 50% over a ten-year period and prices have increased by