GDP/Unemployment/Inflation Review

What is the best measure of a nation's standard of living?

• real GDP per capita

• population growth

• savings

• national income

Real GDP

• distorts the price level in the GDP

• expresses GDP in constant prices

• measures only intermediate goods

• is another term for GNP

Which is the following is included in GDP?

• an intermediate good

• a service produced and used in another country

• a fish that you catch and eat yourself

• a fish that you buy at a store

When a farm worker loses his job after the harvest, it is an example of

• Frictional unemployment

• Seasonal unemployment

• structural unemployment

• cyclical unemployment

Which statement describes full employment?

• Everybody who wants a job has a job

• There is no unemployment at all

• There is no cyclical unemployment

• There is no structural unemployment

A general increase in prices is called

• inflation

• purchasing power

• the CPI

• a price index

People who underemployed

• no longer look for work

• work part time or at jobs that are below their skills

• are the same as unemployed workers

• experience only frictional employment

The inflation rate is

• the ability to buy goods or services

• measured in fixed dollars

• not an important measure to economists

• the percentage change in prices over time

Inflation reduced people's purchasing power because

• the same amount of money buys ore goods and services

• the same amount of money buys fewer goods and services

• the market basket has to be changed every year

• there is not enough money in the economy

Is this counted in the GDP of the US?

The federal government purchases a new submarine for the US Navy.

• Yes

• No