EC_302_Exam_1_practice_FS08 - EC302 Exam 1 Practice 1 The...

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EC302 Exam 1 Practice 1. The current adult population of an economy is 20,000. 50% of the adult population is in the labor force. There are 600 unemployed workers. a. What is the unemployment rate? b. Over the next 6 months, 50 workers retire, 100 unemployed workers give up and leave the labor force 150 people enter the labor force. 100 new jobs are created What is the new unemployment rate? 2. Identify if each is a stock (S) or a flow (F) _________ Labor Force _________ Investment _________ Capital _________ Gross Domestic Product (GDP) 3. President Bush has pledged cutting the deficit. If a deficit is cut by 50% how does the US debt change? 4. Suppose an economy had the following expenditures on goods and services: Consumption = 5000 (consisting of 3000 domestically produced new goods and 2000 imports) Government purchases = 2000 (all domestically produced) Investment = 1000 (all domestically produced) Exports = 1000 What is the GDP of this economy? 5. The following are excerpts from the January 31, 2007 news release from the Bureau of Economic Analysis (BEA) Real GDP increased 3.4 percent in 2006 (that is, from the 2005 annual level to the 2006 annual level), compared with an increase of 3.2 percent in 2005. . . Current-dollar GDP increased 6.4 percent . . . in 2006.
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This note was uploaded on 02/22/2010 for the course EC EC 302 taught by Professor Wilson during the Fall '08 term at Michigan State University.

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EC_302_Exam_1_practice_FS08 - EC302 Exam 1 Practice 1 The...

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