Name: Class: Date: Exam 2pm class fall 2016Indicate the answer choice that best completes the statement or answers the question.1. Home is a country that produces two goods, pears and cellular phones. Last year, Home produced 450 bushels of pears and 1050 cellular phones. This year it produced 450 bushels of pears and 2000 cellular phones. Given no other information, which of the following events could explain this change? a. Home experienced an improvement in cellular phone-making technology. b. Home experienced a decline in pear-producing technology. c. Home experienced increased unemployment. d. Home experienced a reduction in resources.2. If an economy is producing efficiently, then a. it is possible to produce more of one good without producing less of another good. b. it is possible to produce more of both goods without increasing the quantities of inputs that are being used. c. there is no way to produce more of one good without producing less of another good. d. it is not possible to produce more of any good at any cost.3. Discouraged workers are included in a. the labor force. b. frictional unemployment. c. the number of unemployed. d. None of the above is correct.4. Workers searching for jobs that best suit them is most closely associated with a. seasonal unemployment. b. cyclical unemployment. c. structural unemployment. d. frictional unemployment.5. In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles ofcologne. A razor cost $20 in 2009 and $25 in 2010. A bottle of cologne cost $30 in 2009 and $40 in 2010. Using 2009 as the base year, which of the following statements is correct? a. The consumer price index is 310 in 2010. b. The rate of inflation is 29.17% in 2010. c. For the typical consumer, the number of dollars spent on razors is equal to the number of dollars spent on cologne in each of the two years. d. None of the above is correct.Copyright Cengage Learning. Powered by Cognero. Page 1Name: Class: Date: Exam 2pm class fall 2016Table 23-3The table below contains data for the country of Crete for the year 2010.Total income $5731Household purchases of durable goods $1108Household purchases of nondurable goods $702Household purchases of non-education services $203Household purchases of education services $302Household purchases of new housing $816Purchases of capital equipment $333Inventory changes $75Purchases of new structures $267Depreciation $401Local government spending on goods and services $236State government spending on goods and services $419Federal government spending on goods and services $1182Transfer payments $707Foreign purchases of domestically produced goods $217Domestic purchases of foreign goods $1296. Refer to Table 23-3. What was Crete’s investment in 2010? a. $1491 b. $675 c. $1090 d. $17937. By not taking into account the possibility of consumer substitution, the CPI a. overstates the cost of living. b. may overstate or understate the cost of living, regardless of how quickly prices rise. c. understates the cost of living. d. may overstate or understate the cost of living, depending on how quickly prices rise.8. GDP is not a perfect measure of well-being; for example, a. GDP incorporates a large number of non-market goods and services that are of little value to society. b. GDP fails to account for the quality of the environment. c. GDP places too much emphasis on the value of leisure. d. All of the above are correct.9. Real GDP will increase a. when prices increase or output increases. b. only when output increases. c. All of the above are correct. d. only when prices increase.Copyright Cengage Learning. Powered by Cognero. Page 2Name: Class: Date: Exam 2pm class fall 201610. Which of the following is a cause of the changing role of women in American society over the past several decades? a. new technologies that have reduced the amount of time required to complete routine household tasks b. improved birth control c. changing political and social attitudes d. All of the above are correct.11. Which of the following statements about real and nominal interest rates is correct? a. Real interest rates must be positive, but nominal interest rates can be either positive or negative. b. Real interest rates and nominal interest rates must be positive. c. Real interest rates can be either positive or negative, but nominal interest rates must be positive. d. Real interest rates and nominal interest rates can be either positive or negative.12. The CPI differs from the GDP deflator in that a. substitution bias is not a problem with the CPI, but it is a problem with the GDP deflator. b. the CPI is an inflation index, while the GDP deflator is a price index. c. increases in the prices of foreign produced goods that are sold to U.S. consumers show up in the GDP deflator but not in the CPI. d. increases in the prices of domestically produced goods that are sold to the U.S. government show up in the GDP deflator but not in the CPI.13. Changes in the producer price index are often thought to be useful in predicting changes in a. stock prices. b. the unemployment rate. c. the consumer price index. d. the rate of output of goods and services.14. Which of the following is correct? a. The amount of unemployment that a country typically experiences is not a determinant of that country's standard of living, and a complex economy can achieve zero unemployment. b. The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and some degree of unemployment is inevitable in a complex economy. c. The amount of unemployment that a country typically experiences is not a determinant of that country's standard of living, and some degree of unemployment is inevitable in a complex economy. d. The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and a complex economy can achieve zero unemployment.15. Suppose an apartment complex converts to a condominium, so that the former renters are now owners of their housingunits. Suppose further that a current estimate of the value of the condominium owners' housing services is the same as the rent they previously paid. What happens to GDP as a result of this conversion? a. GDP is unaffected because neither the rent nor the estimate of the value owner-occupied housing services is included in GDP.Copyright Cengage Learning. Powered by