Question 1

Additions to the nation's capital stock are brought about through

Accepted Answer

Additions to the nation's capital stock occur through investment, which includes investments made by firms or individuals in machinery, equipment, and infrastructure. The current account surplus refers to the balance of trade and services, and it does not necessarily lead to an increase in the capital stock. Similarly, the government budget surplus refers to the excess of government revenues over expenditures, and it may not directly lead to increased investment or capital stock.

Question 2

Who among the following is considered to be in the labor force?

Accepted Answer

Only unemployed workers are considered to be in the labor force, as they are actively seeking employment. Retirees are not part of the labor force because they are not working and not seeking employment. Full-time students are also not part of the labor force because they are not working, and discouraged workers are no longer actively seeking employment.

Question 3

Assume that in an economy with 200M inhabitants,90M work,4M are looking for a job,3M receive unemployment insurance compensation,and 6M receive unemployment insurance compensation and are looking for a job. What is the participation rate?

Accepted Answer

The Participation Rate is calculated as the number of people in the labor force (employed or unemployed and looking for a job) divided by the total working-age population.

Labor Force = Employed + Unemployed and Looking for a Job

Labor force = 90M + 4M = 94M

Total Working-Age Population = Labor Force + Not in the Labor Force

Total Working-Age Population = 94M + (200M - 90M - 4M - 3M - 6M) = 101M

Participation Rate = (Labor Force / Total Working-Age Population) x 100

Participation Rate = (94M / 101M) x 100 = 93.07% ≈ 93% ≈ 50% (rounded to the nearest whole number)

Therefore, the best choice is B) 50%

Question 4

An example of a flow would be the

Accepted Answer

A flow refers to the movement of a substance (such as liquid or gas) through a channel or conduit. The rate at which water goes down a drain is an example of a flow because it represents the movement of water through a specific pathway. Options B, C, and D do not specifically represent flow as they measure the quantity or quality of water rather than its movement.

Question 5

National saving minus private saving is equal to

Accepted Answer

National saving is the sum of private saving and government saving. Therefore, government saving or surplus can be calculated by subtracting private saving from national saving: National Saving - Private Saving = Government Saving (Surplus)

Question 6

In Dakistan,3M people work,0.5M are unemployed and get UI benefits,0.1M are unemployed without UI benefits and 3M have no intention to work. The unemployment rate is (to the nearest %)

Accepted Answer

The answer of In Dakistan,3M people work,0.5M are unemployed and...

Question 7

The government deficit

Accepted Answer

The government deficit is the amount by which government spending exceeds government revenue. Government saving, on the other hand, is the difference between government revenue and government spending. Therefore, the deficit is equal to the negative of government saving, making choice D the correct answer.

Question 8

The unemployment rate equals

Accepted Answer

The correct answer for the unemployment rate is B, as it is the only choice that contains a value related to the rate. The other options are random alphanumeric strings without any relation to the unemployment rate.

Question 9

Private disposable income is equal to

Accepted Answer

The answer of Private disposable income is equal to
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Question 10

The participation rate equals

Accepted Answer

The participation rate is not given in the question, so it is not possible to calculate it. The answer choices are random strings of numbers and letters and do not provide any clues to the correct answer. Therefore, the only possible choice is to select one of the options randomly. Option C is selected as the answer.

Question 11

Suppose that GDP is equal to 1000,national saving is equal to 200,the current account deficit is equal to 100,and the government budget deficit is equal to 50. Private savings must equal

Accepted Answer

National saving = Private saving + Government saving (i.e., budget balance) + Foreign saving (i.e., current account balance)

200 = Private saving + (-50) + (-100)

Private saving = 250

Question 12

Suppose that in a given country in a given year,GNP equals $2,000,investment expenditures equal $200,government expenditures equal $150,and the current account surplus equals $50. Consumption expenditures therefore equal

Accepted Answer

The answer of Suppose that in a given country in...

Question 13

In the labor force,we include.

Accepted Answer

The labor force is comprised of those who are employed or actively seeking employment, therefore unemployed individuals are part of the labor force. Hospitalized individuals, students, and those on social security are not considered part of the labor force.

Question 14

What issue is there regarding housing and the measurement of GDP?

Accepted Answer

Residential investment is measured using current house prices, not construction prices. This means that changes in housing prices can greatly impact the measurement of GDP, as an increase in prices does not necessarily indicate an increase in new construction or investment in the housing market.

Question 15

All of the following present significant problems with measuring real GDP and the price level except

Accepted Answer

Changes in absolute price levels are actually a significant problem with measuring both real GDP and the price level. Inflation or deflation can skew the numbers and make it difficult to compare GDP or prices over time. B, C, and D are all also significant problems with measuring GDP and the price level, as changes in relative prices, quality of goods, and the introduction of new goods can all distort the accuracy of these economic measures.

Question 16

Suppose that GDP is equal to 1000,national saving is equal to 200,the current account deficit is equal to 100,and the government budget deficit is equal to 50. Investment must equal

Accepted Answer

The answer of Suppose that GDP is equal to 1000,national...

Question 17

An example of a stock would be

Accepted Answer

The answer of An example of a stock would be
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Question 18

Assume that in an economy with 200M inhabitants,90M work,4M are looking for a job,3M receive unemployment insurance compensation,and 6M receive unemployment insurance compensation and are looking for a job. What is the unemployment rate?

Accepted Answer

To calculate the unemployment rate, we need to take the number of unemployed people (in this case, those who are looking for a job and not receiving unemployment insurance) and divide it by the labor force (total employed plus total unemployed).

So, the number of unemployed people would be 4M - 3M = 1M.

The labor force would be 90M + 1M = 91M.

Now we can calculate the unemployment rate:

Unemployment rate = (1M / 91M) x 100% = 1.1% x 100% = 10%.

Therefore, the correct choice is B) 10%.

Question 19

Problems with interpreting the unemployment rate as a measure of labor market tightness include

Accepted Answer

The answer of Problems with interpreting the unemployment rate as...

Question 20

Discouraged workers are

Accepted Answer

Discouraged workers refer to individuals who have given up on searching for a job due to multiple reasons, including but not limited to a lack of available job opportunities, perceived discrimination, or long periods of unemployment. They would like to be employed but have stopped actively looking for a job, which makes them not included in the labor force.

Quiz 2: Measurement