Economics

Mey Pheap (To all friends please safe to reviews it. I always stay behind you when you need me)

23 of 30

/. All other things equal, if the price of foreign-made cars rises, then the GDP deflatorA. and the CPI will rise by equal amounts.B. will rise and the CPI will remain the same.C. will remain the same and the CPI will rise.D. and the CPI will rise by different amounts.Correct. The answer is C. Goods and services produced abroad do not enter the GDP deflator, but are included in

the CPI if the foreign goods are in the consumers’ basket. See Section 2

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2.24 of 30

/. General Motors increases the price of a model car produced exclusively for export to Europe. Which U.S.price index is affected?A. the CPIB. the GDP deflatorC. both the CPI and the GDP deflatorD. neither the CPI nor the GDP deflatorCorrect. The answer is B. The GDP deflator is affected because the cars are produced domestically. The CPI does

not change because the cars are not consumed domestically. See Section 2

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2.25 of 30

/. Which of the following events will cause the unemployment rate to increase?A. an increase in population, with no change in the size of the labor forceB. a proportionally equal increase in the labor force and the number of unemployed workersC. an increase in the labor force with no change in the number of employed workersD. an increase in the number of employed workers with no change in the number of unemployed workersCorrect. The answer is C. The unemployment rate is defined as the number of unemployed workers divided by thelabor force. If the labor force increases and employment does not change, the unemployment rate will increase. See

Section 2

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3.26 of 30

/. An example of a person who is counted as unemployed is aA. retired worker below the mandatory retirement age.B. part-time worker who would like to work full-time.C. senator who resigns her job to run for president.D. student going to school full-time.

Correct. The answer is C. For a discussion of who is...