Quize

STUDY GUIDE QUIZ # 2

1. (TCO F) The size of the labor force in a community is 1,000, and 850 of these folks are gainfully employed. In this community, 50 people over the age of 16 do not have a job, and are not looking for work. In addition, 80 people in the community are under the age of 16. The unemployment rate is:

2. (TCO F) Suppose nominal GDP in 2005 was $12 trillion and in 2006 it was $14 trillion. The general price index in 2005 was 100 and in 2006 it was 104. Between 2005 and 2006 real GDP rose by what percent?

3. (TCO F) The consumer price index was 185.2 in January of 2004, and it was 190.7 in January of 2005. Therefore, the rate of inflation in 2004 was about:

4. (TCO E) (5 points) As the U.S. dollar appreciates in value relative to the Japanese Yen, what happens to the price of U.S. goods in Japan? What happens to the price of Japanese goods in the U.S.?

(5 points) Why would a country (for example China) choose to keep their currency relatively pegged to the U.S. dollar? If the U.S. dollar were to appreciate considerably against most currencies, what would be the effect on Chinese exports to countries other than the U.S.?

5. Suppose the Indian rupee price of one British pound is 54.392 rupees for each pound. A hotel room in London costs 120 pounds, while a similar hotel room in New Delhi costs 6,500 Indian rupees. In which city is the hotel room cheaper, and by how much?

6. (TCO E) Answer the next question on the basis of the following production possibilities data for Landia and Scandia:

Landia production possibilities:

A B C D E

Fish 8 6 4 2 0

Chips 0 10 20 30 40

Scandia production possibilities:

A B C D E

Fish 24 18 12 6...