AP MACRO Measurement of Economic Performance 1

Question 1

Which of the following is included in the calculation of Gross Domestic Product (GDP)?

Accepted Answer

Final goods and services produced domestically

Answer

The purchase of used goods

Answer

Intermediate goods used in production

Answer

Financial transactions such as stock trading

Question 2

If the unemployment rate rises above the natural rate of unemployment, it typically indicates:

Accepted Answer

A recession with cyclical unemployment.

Answer

The economy is operating at full employment.

Answer

The presence of only frictional and structural unemployment.

Answer

A significant increase in labor force participation.

Question 3

What does the Consumer Price Index (CPI) measure?

Accepted Answer

The average change in prices paid by consumers for a market basket of goods

Answer

The total output of goods and services in the economy

Answer

The level of unemployment in the economy

Answer

The growth rate of real GDP

Question 4

Which scenario would contribute to an increase in nominal GDP but not in real GDP?

Accepted Answer

Inflation raising the prices of goods and services

Answer

A significant rise in population

Answer

An increase in the production of goods and services

Answer

A decrease in the unemployment rate

Question 5

Which of the following best describes structural unemployment?

Accepted Answer

Unemployment resulting from a mismatch of skills with job requirements

Answer

Unemployment due to seasonal changes in demand for labor

Answer

Unemployment caused by short-term transitions between jobs

Answer

Unemployment occurring during a recession