Nominal GDP was $9,500 billion in Year 1 and $10,000 billion in Year 2. The GDP price index was 170 in Year 1 and 175 in Year 2. Between Years 1 and 2, the rate of growth in real GDP was approximately:

1.   ?    1.6 percent.
2.   ?    2.3 percent.
3.   ?    4.4 percent.
4.   ?    5.3 percent.

Which would be the best economic measure to compare standards of living among nations over time?

1.   ?    changes in labor productivity
2.   ?    changes in real domestic output
3.   ?    changes in real income per capita
4.   ?    changes in nominal income per capita

Economic well-being is understated by growth rates because they:

1.   ?    account for pollution expenditures.
2.   ?    don't account for improvement in products.
3.   ?    account for illegal activity.
4.   ?    don't account for the slowdown in productivity.

When the rate of growth of real GDP per capita is reported, it accounts for:

1.   ?    environmental problems within the economy.
2.   ?    changes in the domestic output per person.
3.   ?    improvement in product quality per person.
4.   ?    increases in available leisure time for people.
   

Which phase of the business cycle would be most closely associated with an economic contraction?

1.   ?    peak
2.   ?    recession
3.   ?    trough
4.   ?    recovery

A recession is a decline in:

1.   ?    the full-employment unemployment rate over a year.
2.   ?    the natural rate of unemployment.
3.   ?    GDP that lasts six months or longer.
4.   ?    GDP that lasts one year or longer.
   

The level of total spending is the immediate determinant of the:

1.   ?    ratio of private to public goods production.
2.   ?    level of real output and employment.
3.   ?    size of the labor force.
4.   ?    inflation rate.

Which industry or sector of the economy would least likely be affected by the business cycle?

1.   ?    automobiles
2.   ?    consumer durables
3.   ?    capital goods
4.   ?    services
   

The total population of an economy is 175 million, the labor force is 125 million, and the number of unemployed is 8 million. The unemployment rate for this economy is:

1.   ?    4.6 percent.
2.   ?    5.8 percent.
3.   ?    6.4 percent.
4.   ?    7.8 percent.

Official unemployment rate statistics may:

1.   ?    overstate the amount of unemployment by including part-time workers in the calculations.
2.   ?    understate the amount of unemployment by excluding part-time workers in the calculations.
3.   ?    overstate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employmen
4.   ?    understate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment.