Econ 98-Chiu Pop Quiz: GDP & Unemployment Spring 2005Name & SID: Date:1. Define gross domestic product as an equation.2. What is the difference between real income (Y) and aggregate expenditures (AE)? Define each term with an equation.3. Check off the people who are considered unemployed.___ William is a full-time college student.___ Joe graduated from Stanfurd 3 years ago and he cannot find a job. He spends his days watching Yu-Gi-Oh cartoons at home and chilling with friends and family.___ Melissa wakes up 6 AM everyday to cook breakfast for her family, afterwards shedrives her kids to school, tidy the house, pick-up the kids from school, and cooks dinner. She does not have a job that pays a salary nor wages, but her rich husband gives her $10,000 everyday that she can use as she wishes.___ Brendan quits his job last week because he received a higher paying job that startsnext week.___ Matt gets fired last week for cooking the books, and has been interviewing for a new job ever since he got laid off. He hasn’t had much luck.4. Categorize the following expenditures as (C)onsumption, (I)nvestment, (G)overnment purchases, (EX)ports, or (IM)ports. Write (NR) if the transaction is not recorded. All the transactions are done within U.S. borders:___ William buys a new Ford___ William buys a used Ford___ Tamara buys a pink “Made-in-Taiwan” sweatshirt from Macy’s___ Brendan sells his used “Dido” CD to William___ William buys an used “New Kids on the Block” CD from Rasputin Music___ Brendan pays his annual tuition to UC Berkeley___ Katy pays her annual tuition to Stanford Law School___ Congress raises welfare benefits to the poor and needy___ Congress funds Iraq’s post-war reconstruction by $87 billion___ State of California buys 10 tons of wood for construction___ Philip Morris buys 50 tons of paper___ Philip Morris raises the salaries of its employees___ Philip Morris hires more employees___ Philip Morris spend $100 million on “anti-smoking” ads___ Philip Morris buys 200,000 new computers from Dell___ Chinese tourist buys a Hershey’s chocolate bar from SafewayPage 1 of 2Econ 98-Chiu Pop Quiz: GDP & Unemployment Spring 2005Name & SID: Date:5. Examine the validity of this statement: The United States has a GDP per capita of $37,600 and Bermuda has a GDP per capita of $35,200. Therefore the standard of living between the two countries is about the same. (GDP per capita from the CIA World Factbook 2003)6. Define the unemployment rate (as an equation).7. Does the unemployment rate under-measure or over-measure the jobless problem? Explain.8. The economy is in a deep recession for over a year. Fortunately, the recent unemployment rate decreases from 30% to 25%. However firms did not hire any new workers during the same period. The president says, “It must be true that the economy is recovering because the unemployment rate fell.” Evaluate the president’s statement.Page 2 of
View Full Document
Unlocking...