AP Macroeconomics Unit 2

The purchase of new capital goods (tools, instruments, machines, buildings) and additions to inventories

• Exports of goods and services

• Real GDP

• Investment

• Net exports of goods and services

If the consumer price index (CPI) were 131 at year-end 1999 and 125 at year-end 1998, then inflation during 1999 was 

• zero; prices were stable during 1999
• 4.8 percent
• 6.0 percen
• 8.4 percent

Which of the following will most likely occur during the expansionary phase of the business cycle? 

• Real GDP rises and unemployment falls.
• Real GDP rises and unemployment rises. 
• Real GDP declines and inflation rises.
• Interest rates rise and the number of business failures rise. 

Which result occurs when federal government expenditures are greater than the federal government's total receipts?

• reduced net exports
  
• increased excise taxes
  
• a federal budget surplus
  
• a federal budget deficit

Frictional unemployment 

• would be eliminated if the economy were operating at full employment levels of GDP.
• is zero when we have achieved the Natural rate of unemployment.
• is present even when labor markets are working well.
• is the result of worker skills not matching the jobs available

A general rise in overall prices is called:

• Deflation
• Inflation
• Consumer Price Index
• Federal Reserve

Items that firms in the United States produce and sell to the rest of the world

• Imports of goods and services

• Investment

• Nominal GDP

• Exports of goods and services

Which of the following would not affect the size of real GDP?

• Consumer purchase of a new car for personal use.
• Government purchase of a new car for the military
• Consumer purchase of a rare renaissance painting. 
• Business purchase of a new car for a delivery vehicle.

A Chik-fil-A milkshake today costs $2.75. The Hapeville, Georgia location sold 5,000,000 this year. In 1967, it cost $0.80 and they sold 2,000,000. How do I find the nominal GDP for Chik-fil-A milkshakes in 1967?

• 2.75 x 5,000,000

• .80 x 2,000,000

• .80 x 5,000,000

• 2.75 x 2,000,000

Which of the following would be an example of an intermediate good or service?

• A calculator purchased by a college student for taking exams
• Gasoline purchased by an insurance agent to visit clients at their homes
• A car purchased by a student’s parents and given to the student
• Tuition paid by a student at a state university