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Which of the following newspaper headlines is more closely related to what microeconomists study than to what macroeconomists study?


A) Unemployment rate rises from 5 percent to 5.5 percent.
B) Real GDP grows by 3.1 percent in the third quarter.
C) Retail sales at stores show large gains.
D) The price of oranges rises after an early frost.

E) B) and C)
F) A) and D)

Correct Answer

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Rachel babysits for her sister for no pay.When she babysits for someone else she charges $8 an hour.When is Rachel's babysitting included in GDP?


A) When she babysits for her sister and when she babysits for someone else.
B) When she babysits for her sister,but not when she babysits for someone else.
C) When she babysits for someone else,but not when she babysits for her sister.
D) Neither when she babysits for her sister nor for someone else.

E) A) and B)
F) A) and C)

Correct Answer

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The Carters' oldest son attends Big State University.He and his parents pay all his fees and tuition.These payments count in GDP as


A) investment.
B) government spending.
C) consumption of services.
D) consumption of durable goods.

E) All of the above
F) None of the above

Correct Answer

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GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut.As a result,


A) U.S.investment,GDP,and GNP all increase by the same amount.
B) U.S.investment increases,but GDP and GNP are unaffected by the purchase.
C) U.S.investment and GDP increase by the same amount,but U.S.GNP increases by a smaller amount.
D) U.S.investment and GNP increase by the same amount,but U.S.GDP increases by a smaller amount.

E) A) and B)
F) A) and C)

Correct Answer

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