TEST 1C OCT 07 ANSWERS

TEST 1C OCT 07 - MIDTERM EXAM 1 OCTOBER 2007 ECON 0110 MACROECONOMICS 1 PM CLASS DR KENKEL THIS IS TEST 1C WITH ANSWERS 20 questions worth 12.5

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MIDTERM EXAM 1: OCTOBER, 2007 ECON 0110: MACROECONOMICS 1 PM CLASS DR. KENKEL THIS IS TEST 1C WITH ANSWERS 20 questions worth 12.5 points each. Total Points = 250 1. Assume the following data apply to a certain country: Year Consumer Nominal Price GDP Index (Trillions) 2003 118.9 10.1 2004 154.6 13.2 2005 180.5 15.5 During 2005, real GDP equals a. Less than 8.0 trillion *b. 8.0 to less than 8.7 trillion c. 8.7 to less than 9.9 trillion d. 9.9 to less than 11.8 trillion e. none of the above ANSWER: 100 X (15.5/180.5) = 8.59 2. Assume the following data apply to a certain country: Population 410.0 million Employed 163.6 million Unemployed 6.4 million Not in Labor Force 106.0 million The unemployment rate is a. Less than 3.0% *b. 3.0% to less than 5.0% c. 5.0% to less than 6.5% d. 6.5% to less than 10.5% e. none of the above ANSWER: Labor force = 163.6 + 6.4 = 170.0; Unemp. Rate = 100% x (6.4/170.0) = 3.76% 3. In the previous question, the labor force participation rate is: a. Less than 30% b. 30% to less than 45% c. 45% to less than 60% *d. 60% to less than 75% e. none of the above ANSWER: LF = 163.6 + 6.4 = 170; CNP = 163.6 + 6.4 + 106 = 276; LFP Rate = 170/276 = .616 4. If the real rate of interest is 4.32% and the inflation rate is 2.12%, the nominal rate of interest will be a. less than 0.0% b. 0.0% to less than 2.3% C. 2.3% to less than 4.0% d. 4.0% to less than 6% *e. none of the above ANSWER: nominal rate - inflation = real rate nominal rate = real rate + inflation rate 4.32 + 2.12 = 6.44
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5. Which, if any, of the following is not a major macroeconomic goal? a.
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This test prep was uploaded on 04/15/2008 for the course ECON 0110 taught by Professor Kenkel during the Fall '08 term at Pittsburgh.

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TEST 1C OCT 07 - MIDTERM EXAM 1 OCTOBER 2007 ECON 0110 MACROECONOMICS 1 PM CLASS DR KENKEL THIS IS TEST 1C WITH ANSWERS 20 questions worth 12.5

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