CEA Macroeconomic Indicators 2

Question 1

Which component of GDP measures the value of goods produced but not yet sold?

Accepted Answer

Inventory investment

Answer

Inventory investment captures changes in unsold goods held by businesses and is part of the investment (I) component of GDP.

Question 2

If nominal GDP grows 6% and the GDP deflator rises 4%, what is the approximate real GDP growth rate?

Accepted Answer

2%

Answer

Real GDP growth ≈ nominal GDP growth minus inflation, so 6% − 4% = 2%.

Question 3

Which unemployment measure is considered the broadest indicator of labor underutilization in the U.S.?

Accepted Answer

U-6

Answer

U-6 includes the officially unemployed, marginally attached workers, and those working part-time for economic reasons.

Question 4

A sustained decline in the general price level is best described as:

Accepted Answer

Deflation

Answer

Deflation is a persistent fall in the overall price level, distinct from disinflation which is a slowing of the inflation rate.

Question 5

The current account balance is LEAST likely to include which item?

Accepted Answer

Foreign direct investment

Answer

Foreign direct investment appears in the capital/financial account, not the current account.

(CEA) Certified Economic Analyst Practice Test