TEST I mkuprev new - Make up Test Econ 102- Spring 2004...

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Make up Test Econ 102- Spring 2004 Prof. Steve Kyle PART I: Multiple Choice. 10 points (each question worth ½ point) 1. Which of the following would be included in U.S. GNP and not in U.S. GDP? a) Profit earned in the U.S. by Honda Corporation, a Japanese owned company. b) Wages paid to Mexican migrant workers harvesting peaches for a U.S. owned company c) Rent paid to Sean Thornton, the American owner of a piece of property in Ireland. d) Dividends paid to Japanese owners of stock in Honda Corporation, a Japanese-owned company that sells cars in the United States. Ans. c 2. Fill in the blank GDP = final sales + ( change in business inventories ) 3. Economists calculate both nominal GDP and real GDP. Which of the following statements best describes the difference between the two? a) Nominal GDP includes both intermediate and final goods and services, while real GDP includes only final goods and services. b) Nominal GDP is measured using current dollars, while real GDP is measured using constant dollars. c) Nominal GDP measures domestic trade, while real GDP measures international trade. d) Nominal GDP includes the value of the budget deficit, while real GDP excludes the budget deficit. Ans. b 4. “Double counting” would occur if GDP statisticians; a) used market prices without a correction for inflation b) included sales taxes for the market prices of goods and services
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c) added the costs of wood to the furniture maker along with the final price of the chairs d) added government expenditures on roads, and consumer expenditures on gasoline Ans. c 5. The housework done by many women today at home a) counts for GDP b) doesn’t count for GDP, but counts for GNP c) counts for Real GDP only d) none of the above Ans. d 6. Which of the following people are considered unemployed according to the Bureau of Labor Statistics? I. William lost his job four months ago and because of the poor economy has not bothered looking for another job. II. Frank quit his job six weeks ago and went back to school full time. III. Elizabeth lost her full-time job as a bank teller last month. Since then, Elizabeth has been working one day a week through a temp agency. a) William b) Frank c) Elizabeth d) William and Frank
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e) William and Elizabeth f) Frank and Elizabeth g) William, Frank, and Elizabeth h) None of the three Ans. h 7. Which of the following lowers an economy's natural rate of unemployment? a) An increase in the number of weeks a worker can collect unemployment insurance b) More efficient job search through use of the Internet c) An increase in the minimum wage d) The economy entering a recession Ans. b 8. Moving from point A to B in the previous PPF graph is the result of:
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TEST I mkuprev new - Make up Test Econ 102- Spring 2004...

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