BMF10/BMF11 Quiz

Real GDP for Q3 grew by:

3.0%

12. What has been the range of the decline in real output for U.S. recessions since 1950? A. -0.5 percent to -4.9 percent B. -5.0 percent to -9.9 percent C. -10.0 percent to -14.9 percent D. -15.0 percent to -19.9 percent

A. -0.5 percent to -4.9 percent

13. What has been the range for the duration in months of U.S. recessions since 1950? A. 0 months to 5 months B. 6 months to 16 months C. 17 months to 25 months D. 26 months to 30 months

B. 6 months to 16 months

51. At the full-employment unemployment rate there is only: A. cyclical and frictional unemployment. B. frictional and structural unemployment. C. demand-deficient unemployment. D. "discouraged workers" unemployment.

B. frictional and structural unemployment.

50. The rate of unemployment when the economy is at its potential output is called the: A. full-employment rate of unemployment. B. natural rate of unemployment. C. structural rate of unemployment. D. frictional rate of unemployment.

B. natural rate of unemployment.

44. A nation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end. Consumption of private fixed capital in the year was $25 billion. Assuming stable prices, gross investment was: A. $25 billion. B. $50 billion. C. $75 billion. D. $90 billion.

C. $75 billion.

68. A nation buys three products, A, B, and C. Over two years, the prices of these products change as follows: Over the period referred to, the nation's nominal income increased by 2 percent. The nation's real income changed by approximately: A. 2 percent. B. 3 percent. C. -3 percent. D. -2 percent.

C. -3 percent.

16. In which industry or sector of the economy is output least likely to be affected by the business cycle? A. Housing construction B. Automobile production C. Agricultural commodities D. Capital goods production

C. Agricultural commodities

73. Inflation caused by an increase in aggregate spending is referred to as: A. cost-push inflation. B. demand-push inflation. C. demand-pull inflation. D. hyperinflation.

C. demand-pull inflation.

66. The GDP deflator or price index equals: A. gross private domestic investment less the consumption of fixed capital. B. gross national product less net foreign factor income earned in the United States. C. nominal GDP divided by real GDP. D. real GDP divided by nominal GDP.

C. nominal GDP divided by real GDP.

65. If the price index is 130, this means that: A. prices are 130 percent higher than in the base year. B. prices are .13 times higher than in the base year. C. prices are 30 percent higher than in the base year. D. nominal GDP must be inflated to determine the real GDP

C. prices are 30 percent higher than in the base year.

97. The practice of clipping coins by feudal lords was a subtle form of: A. specialization. B. investment. C. taxation. D. barter.

C. taxation.

43. A nation's capital stock was valued at $500 billion at the start of the year and $575 billion at the end. Consumption of private fixed capital in the year was $35 billion. Assuming stable prices, net investment was: A. $35 billion. B. $40 billion. C. $45 billion. D. $75 billion

D. $75 billion

111. The factor accounting for the largest increase in the productivity of labor in the United States has been: A. the education and training of workers. B. improved resource allocation. C. the quantity of capital. D. technological advance.

D. technological advance.

81. The percentage change in one's real income can be approximated by: A. dividing real income by the price level, expressed as an index number. B. dividing the price level, expressed as an index number, by nominal income. C. the percentage change in price level minus the percentage change in nominal income. D. the percentage change in nominal income minus the percentage change in the price level.

D. the percentage change in nominal income minus the percentage change in the price level.

22.In November 2008, General Motors produced a car that was delivered to a local dealership in December 2008. The auto was sold to Sharon Smith for personal use in February 2009. Following national income accounting practices, this car would be counted as: A.consumption in 2008 and consumption in 2009. B.consumption in 2008 and investment in 2009. C.disinvestment in 2008 and consumption in 2009. D.investmentin 2008 and disinvestment in 2009

D.investmentin 2008 and disinvestment in 2009

34.A distinguishing characteristic of public transfer payments is that: A.they are used to subsidize the major transportation carriers to reduce transportation costs. B.theyare counted as part of government purchases in the calculation of the gross domestic product. C.there is a tax on the amount of the subsidy above a certain income level. D.the recipients make no contribution to current production in return for them.

D.the recipients make no contribution to current production in return for them.

Q3 Real GDP:

• Personal consumption expenditures: 1.62% increase • Gross private domestic investment: 0.98% increase • Net exports of goods and services: 0.41% increase (imports decreased) The component that contributed negatively to GDP in percent change is government consumption expenditures and gross investment. This decreased by 0.02%.

77. Inflation caused by a rise in per-unit production costs is referred to as: A. cost-push inflation. B. demand-pull inflation. C. unanticipated inflation. D. hyperinflation.

A. cost-push inflation.

93. After the First World War, Germany experienced an economic condition that can be best described as: A. hyperinflation. B. cost-push inflation. C. unanticipated inflation. D. anticipated inflation.

A. hyperinflation.

113. Unlike demand-pull inflation, cost-push inflation: A. is self-limiting. B. drives up the price level. C. increases nominal income. D. increases real income.

A. is self-limiting.

144. Skeptics of the recent productivity acceleration say that: A. it is too early to predict whether recent boosts in U.S. productivity are permanent or transitory. B. global capitalism is a media fiction, not an economic reality. C. the growth of service productivity is severely understated. D. many of the factors that slowed productivity in the 1973-1995 period have now reversed themselves.

A. it is too early to predict whether recent boosts in U.S. productivity are permanent or transitory.

___% of 2016 electorate expressed left-center economic views

73.5%

89. You are given the following information about the economy: (1) nominal interest = 8 percent; (2) real rate of interest = 6 percent. The inflation premium is: A. 2 percent. B. 6 percent. C. 8 percent. D. 14 percent.

A. 2 percent.

90. Which is not a supply factor in economic growth? A. An efficient allocation of resources. B. Natural resources. C. The quantity and quality of labor. D. Technological knowledge.

A. An efficient allocation of resources.

112. Which factor has most affected productivity growth since 1929? A. Quantity of capital. B. Education and training. C. Economies of scale. D. Improved resource allocation.

A. Quantity of capital.

146. Proponents of economic growth say that pollution: A. is an inevitable by-product of growth. B. occurs not because of growth, but because common properties are treated as free goods. C. declines as a country moves from agriculture to industry. D. is detrimental to economic growth.

B. occurs not because of growth, but because common properties are treated as free goods.

100. Which of the following formulas is correct? Percentage change in: A. price level approximates percentage change in real income minus percentage change in nominal income. B. real income approximates percentage change in nominal income minus percentage change in price level. C. nominal income approximates percentage change in price level minus percentage change in real income. D. real income approximates percentage change in price level minus percentage change in nominal income.

B. real income approximates percentage change in nominal income minus percentage change in price level.

69. A consumer price index attempts to measure changes in: A. the prices of all goods and services produced by the U.S. economy. B. the price of a select market basket of goods and services. C. the spending patterns of all consumers in the United States. D. the spending patterns of consumers worldwide.

B. the price of a select market basket of goods and services.

123. The case against economic growth is often made using which of the following arguments? A. Limiting growth will contribute to more income equality across nations. B. Common property resources need to be protected by the price system. C. Economic growth permits us to "make a living," but it does not provide us with "the good life." D. Economic growth will contribute to more economic security, but it will also produce more boring life styles.

C. Economic growth permits us to "make a living," but it does not provide us with "the good life."

17. Which statement is correct? A. During a recession spending on capital goods increases. B. Real output and employment usually show little variance over the business cycle. C. The production of nondurable consumer goods is more stable than the production of durable consumer goods over the business cycle. D. Recessions have not been severe because economists and statisticians have been able to predict their occurrence and intensity with high accuracy.

C. The production of nondurable consumer goods is more stable than the production of durable consumer goods over the business cycle.

49. The natural rate of unemployment: A. means that the economy will always operate at its natural rate. B. means that the economy will always realize its potential output. C. is equal to the total of frictional and structural unemployment. D. is a fixed unemployment rate that does not change over time.

C. is equal to the total of frictional and structural unemployment.

138. Increases in the value of a product to each user, including existing users, as the total number of users rises are called: A. information cascades. B. learning effects. C. network effects. D. scale economies.

C. network effects.

78. The view that labor unions may be a source of inflation would be best associated with the: A. supply-shock view of inflation. B. cost-push view of inflation. C. wage-push view of inflation. D. demand-pull view of inflation.

C. wage-push view of inflation.

9.A recession is a decline in: A. the full-employment unemployment rate over a year. B. the natural rate of unemployment. C.GDP that lasts six months or longer. D. GDP that lasts one year or longer.

C.GDP that lasts six months or longer.

18. Which industry or sector of the economy would least likely be affected by the business cycle? A. Automobiles B. Consumer durables C. Capital goods D. Services

D. Services

91. Which is best considered a demand factor in economic growth? A. The quantity of human resources. B. The quality of human resources. C. The quantity of natural resources. D. The full employment of resources.

D. The full employment of resources.

115. The shift of labor out of agriculture to industry in the United States has tended to: A. reduce the rate of productivity growth. B. increase unemployment in the agriculture sector. C. reduce unemployment in the industrial sector. D. increase labor productivity.

D. increase labor productivity.

84. Assume that there is a fixed rate of interest on contracts for borrowers and lenders. If unanticipated inflation occurs in the economy, then: A. both lenders and borrowers benefit. B. both lenders and borrowers are hurt. C. borrowers are hurt, but lenders benefit. D. lenders are hurt, but borrowers benefit.

D. lenders are hurt, but borrowers benefit.

41. When gross investment is positive, net investment: A. is always zero. B. must be negative. C. must be positive. D. may be either positive or negative.

D. may be either positive or negative.

48. The full-employment rate of unemployment is also called the: A. potential rate of unemployment. B. cyclical rate of unemployment. C. frictional rate of unemployment. D. natural rate of unemployment.

D. natural rate of unemployment.

30. Official unemployment rate statistics may: A. overstate the amount of unemployment by including part-time workers in the calculations. B. understate the amount of unemployment by excluding part-time workers from the calculations. C. overstate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment. D. understate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment.

D. understate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment.

11.An example of an intermediate good or service would be: A.bricks bought by a homeowner for constructing a patio. B.sacks of groceries bought by a dentist for his family. C.acar bought by a stockbroker for commuting to work. D.a desk bought by an accountant for her office.

D.a desk bought by an accountant for her office