Question: 1. In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was Alpha Cabinet Company’s productivity?

Answer: 1/8

Question: In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity?

Answer: 100

Question: Which of the following would increase productivity?

1. human capital per worker

2. b. physical capital per worker

3. c. natural resources per worker

4. d. All of the above are correct.

5. Answer: All of the above are correct

6. Question: The economy’s inflation rate is the

7. Answer: percentage change in the price level from the previous period.

8. Question: Two alternative measures of the overall level of prices are

9. Answer: the GDP deflator and the consumer price index.

10. Question: The CPI and the GDP deflator

11. Answer: generally move together.

12. Question: The CPI differs from the GDP deflator in that

13. Answer: increases in the prices of foreign produced goods that are sold to U.S. consumers show up in the CPI but not in the GDP deflator.

14. Question: The CPI differs from the GDP deflator in that

15. Answer: increases in the prices of domestically produced goods that are sold to the U.S. government show up in the GDP deflator but not in the CPI.

16. Question: Which of the following is always measured in prices from a base-year?

17. a. both nominal and real GDP.

18. b. nominal but not real GDP.

19. c. real but not nominal GDP.

20. d. neither nominal nor real GDP.

21. Answer: c. real but not nominal GDP.

22. Question: Which of the following always uses prices and quantities from the same period?

23. a. both nominal and real GDP.

24. b. nominal GDP but not real GDP.

25. c. real GDP but not nominal GDP.

26. d. neither nominal or real GDP.

27. Answer: b. nominal GDP but not real GDP.