This question tests your knowledge of what activities are included in calculatin

Question

This question tests your knowledge of what activities are included in calculating GDP. Decide for each item whether it is part of GDP and, if so, to which expenditure category it belongs.

2. Purchase of 100 shares of General Motors stock:





A. Not counted in GDP


B. Counted as part of consumption


C. Counted as part of investment


D. Counted as part of government


E. Counted as part of net exports



3. Consider the following three individuals.

Julie did not work for pay last week, but she met with a job counselor and went on two job interviews.

Jack was laid off from his job at a furniture store six months ago. He has a family to support and is frustrated with his inability to find a full-time position. Last week he took a part-time job at a fast-food restaurant, but could work only three hours.

Patricia has been out of work for almost a year. She desperately needs a job but has become so discouraged that she has given up on her job search.

Which of these people would be considered unemployed by the Bureau of Labor Statistics (BLS)?




A. Julie


B. Jack


C. Patricia


D. Julie and Jack


E. Julie and Patricia


F. Jack and Patricia


G. All three individuals


H. None of the individuals





4. Which of the following individuals would NOT be considered unemployed under the Bureau of Labor Statistics criteria?




A. An assembly-line worker for General Motors who is laid off because of a reduction in car sales.



B. An assembly-line worker for General Motors who quits her job and returns to college on a full-time basis.


C. An assembly-line worker for General Motors who quits her job but is interviewing for a position as a part-time bank teller.


D. A recent high-school graduate who is seeking his first job as an assembly-line worker at General Motors.





This table shows employment data for the United States for December 2002. The civilian unemployment rate, which is the most common jobless statistic quoted in the press, only includes non-military and non-institutionalized adults 16 years of age and older. All numbers are in thousands of people.

Civilian Non-Institutional Population
(16 years of age and over) Employed Unemployed


214,968 133,952 8,590

Source: Economic Report of the President, 2003


5.1. What was the unemployment rate in December 2002? (Express your answer to the nearest tenth of a percent.)



%
Please enter 1 digit after the decimal point.









This table shows employment data for the United States for December 2002. The civilian unemployment rate, which is the most common jobless statistic quoted in the press, only includes non-military and non-institutionalized adults 16 years of age and older. All numbers are in thousands of people.

Civilian Non-Institutional Population
(16 years of age and over) Employed Unemployed


214,968 133,952 8,590

Source: Economic Report of the President, 2003


5.2. What was the labor force participation rate in December 2002? (Express your answer to the nearest tenth of a percent.)



%
Please enter 1 digit after the decimal point.




6. The Consumer Price Index measures:




A. The cost of all goods and services produced within a country's borders



B. The cost of goods and services consumed by a typical household


C. The change in income received by a typical household



D. The cost of keeping a family above the poverty line


7. Which of the following is NOT a characteristic of discouraged workers?




A. They want a job.



B. They are not currently working.



C. They are counted as unemployed by the government.




8. If gross investment is $50 billion and depreciation is $20 billion, the economy's capital stock rises by:





A. $70 billion


B. $50 billion


C. $30 billion


D. $20 billion







9. The table shows the distribution of total expenditure on the CPI market basket across several broad categories.
Category of Goods and Services Percent of
Market Basket


Apparel 4%
Education and Communication 6%
Food and Beverages
16%
Housing 41%
Medical Care 6%
Other Goods and Services 4%
Recreation 6%
Transportation 17%




Source: Bureau of Labor Statistics
Which of the following will have the biggest impact on the CPI?



A. A 4% increase in the cost of apparel


B. A 4% increase in the cost of medical care


C. A 4% decrease in the cost of recreation


D. A 4% increase in the cost of food and beverages




. Which of the following activities would be included in the calculation of GDP for the United States?




A. Texas Instruments produces computer chips at a manufacturing facility in Indonesia.


B. I chop down a cherry tree on my property and make a dining room table. I saw a similar table sell for $800 in a local furniture store.


C. Honda, a leading Japanese automobile company, produces 25,000 Accords at its Indiana plant and exports them back to Japan.


D. Goodyear Tire Company manufactures 250,000 tires. The tires are to be sold to General Motors, which will put them on new automobiles.

Explanation / Answer

2. Purchase of 100 shares of General Motors stock: ans- C. Counted as part of investment 3. ans--A. Julie 4. ans--B. An assembly-line worker for General Motors who quits her job and returns to college on a full-time basis. 5. The table is not clear... 6. ans--A. The cost of all goods and services produced within a country's borders 7. ans--C. They are counted as unemployed by the government. 8. ans--C. $30 billion 9. ans--D. A 4% increase in the cost of food and beverages 10. ans--C. Honda, a leading Japanese automobile company, produces 25,000 Accords at its Indiana plant and exports them back to Japan.

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