ECON 2120 Review Questions & Answers
QUESTIONS & ANSWERS
If real GDP per capita measured in 2009 dollars was $6,000 in 1950 and $48,000 in 2024m
we would say the tin 2024, the average American could buy ________ times as many goods
and services as the average American in 1950.
8
When production in an economy grows more quickly than the population in that economy,
which of the following must be occurring?
Real GDP per capita is rising
Referring to the table: Calculate the GDP deflator in 2024
114
What is the largest component of spending in the United States?
Consumption Spending
If your nominal wage rises more slowly than the price level, we can say your real wage has
____ and the purchasing power of a dollar has ____.
fallen; fallen
Inflation tends to ___ during the expansion phase of the business cycle and ____ during the
recession phase of the business cycle
increase; decrease
What two factors are the kets to determining labor productivity?
, the level of technology and the quantity of capital per hour worked
Macroeconomics includes the study of what determines the
Average price levels of goods and services in the economy
Which of the following is NOT a reason why the U.S economy has been more stable since
1950?
Goods have become a larger fraction of GDP and services have become a smaller fraction of
GDP
The unemployment rate for this simple economy equals
10%
Which of the following would be directly counted in GDP in 2024?
kitchen cabinets purchased from Home Depot in 2024 and installed in a house built in 1997
The value of what a U.S owned McDonald's produces in South Korea is included in the U.S
___ and the South Korean ___
GNP; GDP
Suppose that a simple economy produces only four goods and services: shoes, basketballs,
tomatoes, and ketchup. Assume one half of all the tomatoes are used in the production of
ketchup and the other half are purchased by households. Using the information above,
nominal GDP for this simple economy equals:
$6,400
QUESTIONS & ANSWERS
If real GDP per capita measured in 2009 dollars was $6,000 in 1950 and $48,000 in 2024m
we would say the tin 2024, the average American could buy ________ times as many goods
and services as the average American in 1950.
8
When production in an economy grows more quickly than the population in that economy,
which of the following must be occurring?
Real GDP per capita is rising
Referring to the table: Calculate the GDP deflator in 2024
114
What is the largest component of spending in the United States?
Consumption Spending
If your nominal wage rises more slowly than the price level, we can say your real wage has
____ and the purchasing power of a dollar has ____.
fallen; fallen
Inflation tends to ___ during the expansion phase of the business cycle and ____ during the
recession phase of the business cycle
increase; decrease
What two factors are the kets to determining labor productivity?
, the level of technology and the quantity of capital per hour worked
Macroeconomics includes the study of what determines the
Average price levels of goods and services in the economy
Which of the following is NOT a reason why the U.S economy has been more stable since
1950?
Goods have become a larger fraction of GDP and services have become a smaller fraction of
GDP
The unemployment rate for this simple economy equals
10%
Which of the following would be directly counted in GDP in 2024?
kitchen cabinets purchased from Home Depot in 2024 and installed in a house built in 1997
The value of what a U.S owned McDonald's produces in South Korea is included in the U.S
___ and the South Korean ___
GNP; GDP
Suppose that a simple economy produces only four goods and services: shoes, basketballs,
tomatoes, and ketchup. Assume one half of all the tomatoes are used in the production of
ketchup and the other half are purchased by households. Using the information above,
nominal GDP for this simple economy equals:
$6,400
