\"In 1980 your income was $30,000 and the Consumer Price Index(CPI) was 100. In 1990 you income was $45,000 and the CPI stood at150. Which of the following is correct?\"

		Your 1980 nominal income was higher than your 1990 nominalincome.
		Your real income was roughly the same in 1980 as in 1990.
		Your real income was higher in 1990 than in 1980.
		Your real income was lower in 1990 than in 1980.

Question 9

1. In the Circular Flow Model firms are defined as those economicunits that

   		buy products in the product markets and sell resources in theresource markets.
   		sell products in the product markets and buy resources in theresource markets.
   		fit the model of a typical corporation.
   		borrow money in the credit markets for purposes ofconsumption.

Personal Income (PI) is equal to

		\"National Income (NI) minus income earned but not received, plusincome received but not earned. \"
		The total market value of final goods and services produced inthe economy during a given year.
		Gross National Product (GNP) minus depreciation (capitalconsumption allowance)
		National Income (NI).

The GDP may be an inaccurate measure of the economy's trueperformance. Which of the following may be responsible for thisinaccuracy?

		Government purchases of goods and services are counted at costrather than at market price.
		Illegal goods and services are not counted.
		Household production is not measured.
		Barter transactions are not measured.
		All of the above.

The unemployment caused by an economic recession is called

		frictional unemployment.
		structural unemployment.
		cyclical unemployment.
		seasonal unemployment.
		involuntary unemployment.

The unemployment rate statistic published by the Bureau of LaborStatistics may underestimate the magnitude of the unemploymentproblem in the economy because

		\"all part-time workers are counted as \"\"employed\"\" even thoughsome would prefer to work full-time (i.e. are underemployed).\"
		some workers are working in jobs for which they areoverqualified (also underemployed).
		\"\"\"discouraged workers,\"\" who are no longer looking for work,are not counted in the labor force.\"
		all of the above.

Underemployment includes the following:

		People employed part time who would prefer full-time work (parttime for economic reasons)
		Those working in jobs below their qualifications and preferredlevel (e.g. a PhD pumping gas)
		Discouraged workers
		All the above
		\"All, but the discouraged workers \"

Which of the following is NOT a problem in using economicstatistics?

		Using GDP statistics to compare income in the U.S. andBangladesh may be inaccurate because household production(non-market) is a much higher percentage of the economy ofBangladesh.
		\"Using the published CPI statistics to calculate changes in thepurchasing power of your income is inaccurate because the CPI iscalculated for the \"\"average consumer's\"\" spending pattern.\"
		\"The same statistics are often interpreted differently bydifferent politicians and reporters, which makes it difficult tounderstand what is really happening without understanding how thestatistics were calculated.\"
		Government statisticians in the U.S. frequently distort thenumbers. Which of the following transactions is directly measured as partof GDP ? childcare and housework services performed without pay by ahomemaker. purchase of a used car. sale of an IBM bond. services of a prostitute. none of the above.