GDP, Business Cycle, Unemployment Quiz (27 points)



GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION I

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$50 |$40 |$20 |$5 |$10 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) A professional painter buys paintbrushes and paint.

b) The Japanese government purchases $100,000 worth of US History Books made in the US

c) You get a haircut at the local barbershop.

d) Jay buys a used car.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is unemployment at its lowest? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) Cliff’s business just laid off a large number of people due to the slumping economy.

b) Amos is laid off from his job as a chef because the place he works at is experiencing low sales.

c) Kristie just graduated from college and is looking for her first job.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. What does FULL EMPLOYMENT mean for the economy? (1pt)

7. What is aggregate demand? (1pt)?

8. The CPI numbers for the last 3 months were 214, 212, and 211. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$5bn |$10bn |$15bn |

|CPI |2% |2.5% |3% |

|UNEM |4.5% |4% |3.8% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points): VERSION I

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$50 |$40 |$20 |$5 |$10 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted! (5pts)

a) A professional painter buys paintbrushes and paint.

b) The Japanese government purchases $100,000 worth of US History Books made in the US

c) You get a haircut at the local barbershop.

d) Jay buys a used car.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is unemployment at its lowest? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) Cliff’s business just laid off a large number of people due to the slumping economy.

b) Amos is laid off from his job as a chef because the place he works at is experiencing low sales.

c) Kristie just graduated from college and is looking for her first job.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. What does FULL EMPLOYMENT mean for the economy? (1pt)

7. What is aggregate demand? (1pt)?

8. The CPI numbers for the last 3 months were 214, 212, and 211. What is DEFINITELY happening in this economy? (1pt).

9. Use the chart to the right to answer question #9:

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$5bn |$10bn |$15bn |

|CPI |2% |2.5% |3% |

|UNEM |4.5% |4% |3.8% |

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION 2

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$100 |$100 |$20 |$0 |$10 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) The owner of an apartment complex pays a painter to repaint the building.

b) The US Government purchases $100,000 worth of European History books made in Germany.

c) You get a haircut at the local barbershop.

d) Jay buys a used car.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is unemployment at its HIGHEST? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) Jim leaves his job as a hardware store clerk and begins looking for work as an attorney.

b) In Youngstown, Ohio, many workers who had always worked at the steel mill lost jobs when the steel mill closed.

c) Kristie lost her job as an interior decorator when housing prices dropped and the recession began.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. Why does FULL EMPLOYMENT NOT mean 0% unemployment? (1pt)

7. What is aggregate demand? (1pt)?

8. The CPI numbers for the last 3 months were 214, 212, and 211. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$10bn |$10bn |$10.5bn |

|CPI |3.5% |3.75% |3.75% |

|UNEM |4% |4% |4% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION 2

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$100 |$100 |$20 |$0 |$10 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) The owner of an apartment complex pays a painter to repaint the building.

b) The US Government purchases $100,000 worth of European History books made in Germany.

c) You get a haircut at the local barbershop.

d) Jay buys a used car.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is unemployment at its HIGHEST? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) Jim leaves his job as a hardware store clerk and begins looking for work as an attorney.

b) In Youngstown, Ohio, many workers who had always worked at the steel mill lost jobs when the steel mill closed.

c) Kristie lost her job as an interior decorator when housing prices dropped and the recession began.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. Why does FULL EMPLOYMENT NOT mean 0% unemployment? (1pt)

7. What is aggregate demand? (1pt)?

8. The CPI numbers for the last 3 months were 214, 212, and 211. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$10bn |$10bn |$10.5bn |

|CPI |3.5% |3.75% |3.75% |

|UNEM |4% |4% |4% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION 3

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$50 |$50 |$50 |$50 |$50 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) Mr. Cannon buys his wife a dozen roses.

b) Fayette County Schools buy new projectors for classrooms.

c) The Japanese Government buys $4million worth of Oreo Cookies from US-based Nabisco Inc.

d) Jay buys a used car.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is inflation at its lowest? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) The movie theater laid off Cynthia because fewer and fewer people were attending movies.

b) Amos, a car salesman, recently moved to town from Detroit and is trying to find a car-lot that is hiring.

c) Due to the slumping economy, many former mortgage-brokers are out of work because people aren’t buying houses.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. When the economy has FULL EMPLOYMENT, which type of unemployment is at 0%? (1pt)

7. What is aggregate supply? (1pt)?

8. The CPI numbers for the last 3 months were 200, 212, and 215. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$15bn |$5bn |$1bn |

|CPI |2% |1.5% |1% |

|UNEM |4.5% |6% |8% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION 3

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$50 |$50 |$50 |$50 |$50 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) Mr. Cannon buys his wife a dozen roses.

b) Fayette County Schools buy new projectors for classrooms.

c) The Japanese Government buys $4million worth of Oreo Cookies from US-based Nabisco Inc.

d) Jay buys a used car.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is inflation at its lowest? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) The movie theater laid off Cynthia because fewer and fewer people were attending movies.

b) Amos, a car salesman, recently moved to town from Detroit and is trying to find a car-lot that is hiring.

c) Due to the slumping economy, many former mortgage-brokers are out of work because people aren’t buying houses.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. When the economy has FULL EMPLOYMENT, which type of unemployment is at 0%? (1pt)

7. What is aggregate supply? (1pt)?

8. The CPI numbers for the last 3 months were 200, 212, and 215. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$15bn |$5bn |$1bn |

|CPI |2% |1.5% |1% |

|UNEM |4.5% |6% |8% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION 4

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$100 |$50 |$100 |$50 |$100 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) Low interest rates encourage homeowners to buy more things like refrigerators and washing machines.

b) The Japanese government purchases $100,000 worth of US History Books made in the US

c) Marcel buys a used calculator on ebay.

d) Jay takes his family on vacation to Tyrone, Ga.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is the inflation rate at its highest? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) Cindy, a hotel clerk, is told she is no longer needed because guests can check in online now.

b) Amos, a cashier at Wal-Mart, is laid off when he is replaced by a self-check out machine.

c) Kristie just graduated from college and is looking for her first job.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. What types of unemployment exist even when the economy is at FULL EMPLOYMENT? (1pt)

7. What is aggregate demand? (1pt)?

8. The CPI numbers for the last 3 months were 200, 220, and 230. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$5bn |$10bn |$15bn |

|CPI |2% |2.5% |3% |

|UNEM |4.5% |4% |3.8% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION 4

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$100 |$50 |$100 |$50 |$100 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) Low interest rates encourage homeowners to buy more things like refrigerators and washing machines.

b) The Japanese government purchases $100,000 worth of US History Books made in the US

c) Marcel buys a used calculator on ebay.

d) Jay takes his family on vacation to Tyrone, Ga.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is the inflation rate at its highest? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) Cindy, a hotel clerk, is told she is no longer needed because guests can check in online now.

b) Amos, a cashier at Wal-Mart, is laid off when he is replaced by a self-check out machine.

c) Kristie just graduated from college and is looking for her first job.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. What types of unemployment exist even when the economy is at FULL EMPLOYMENT? (1pt)

7. What is aggregate demand? (1pt)?

8. The CPI numbers for the last 3 months were 200, 220, and 230. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$5bn |$10bn |$15bn |

|CPI |2% |2.5% |3% |

|UNEM |4.5% |4% |3.8% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION 5

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$20 |$40 |$60 |$80 |$100 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) Foreign countries buy US Government produced goods..

b) Farmer Joe buys a tractor and seeds for his farm.

c) You get a haircut at the local barbershop.

d) The movie theater buys a used projector.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is Real GDP at its lowest? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) Cliff’s business just laid off a large number of people because their skills were no longer needed.

b) Amos is laid off from his job as a chef because the place he works at is experiencing low sales.

c) Kristie was a stay at home mom, and is now beginning to look for work again as a secretary.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. What does FULL EMPLOYMENT mean for the economy? (1pt)

7. What is aggregate supply? (1pt)?

8. The CPI numbers for the last 3 months were 214, 212, and 211. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$25bn |$20bn |$15bn |

|CPI |2% |1.5% |.75% |

|UNEM |4.5% |6% |6.8% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

GDP, Business Cycle, Unemployment Quiz (24 points) : VERSION 5

1. Assume an economy has the following numbers (in millions). What is their nominal GDP? (1pt)

|Consumption |Investment |Government |Exports |Imports |

|$20 |$40 |$60 |$80 |$100 |

2. For each of the following, write the component of GDP where the items would be counted. Not all items are counted!(5pts)

a) Foreign countries buy US Government produced goods..

b) Farmer Joe buys a tractor and seeds for his farm.

c) You get a haircut at the local barbershop.

d) The movie theater buys a used projector.

e) Defense spending increases due to a war.

3. Draw a CORRECTLY LABELED business cycle. (6 points)

4. At which point on the business cycle is Real GDP at its lowest? Why? (2pts)

5. Write the type of unemployment each person is experiencing. (4 points)

a) Cliff’s business just laid off a large number of people because their skills were no longer needed.

b) Amos is laid off from his job as a chef because the place he works at is experiencing low sales.

c) Kristie was a stay at home mom, and is now beginning to look for work again as a secretary.

d) In Heavy Metal-land the only jobs available are positions in Heavy Metal bands.

Unfortunately, Mr. Cannon doesn’t have enough skills to get a job so he is unemployed.

6. What does FULL EMPLOYMENT mean for the economy? (1pt)

7. What is aggregate supply? (1pt)?

8. The CPI numbers for the last 3 months were 214, 212, and 211. What is DEFINITELY happening in this economy? (1pt).

| |Quarter 1 |Quarter 2 |Quarter 3 |

|RGDP |$25bn |$20bn |$15bn |

|CPI |2% |1.5% |.75% |

|UNEM |4.5% |6% |6.8% |

9. Use the chart to the right to answer question #9:

a) What type of unemployment do they likely have? (1pt)

b) What part of the business cycle are they on? How do you know? (2pts)

BONUS: Max sees the data below and freaks out. What term SPECIFICALLY describes what is going on in this economy?

JUN JUL AUG SEP

CPI 102 102.5 105 119

UNEMPLOYMENTRATE 4.8% 5% 5.8% 6.4%

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