Chapter 6, 8, 9, & 10 Macro Review

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A ski lift operator who loses his job when the snow melts in the spring

An example of a seasonally unemployed worker would be

$11,071.4 billion

Assume that the nominal GDP for a given year is equal to $12,400 billion and the GDP deflator equals 112. Real GDP for that year is approximately

Increase; frictional

An increase in unemployment insurance payments would, in effect, ___________ The amount of time spent searching for a job, which would increase ___________ unemployment

A liability

Anything owed by a person or a firm is

Corporation

Arturo wants to start a business where he is the chief executive officer and the company does issue stock. The type of business Arturo wants to start is a...

2.5%

If a corporate bond with a face value of $20,000 pays yearly coupon payments of $500, what is the coupon rate?

Motivate workers to increase their productivity

If firms pay what are called efficiency wages, they pay wages that

The GDP would be overtstated

If intermediate goods and services were included in GDP

An additional 8 million people would have been working in 2017 than actually were

If the employment population ratio in 2017 was at the same level as it was in 2006,

Unemployment will rise

If the minimum wage is set above the market wage

5%

If the number employed as a 190 million, The working age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is

80%

If the number employed is 190 million, the number unemployed is 10 million, and the working age population is 250 million, then the labor force participation rate is

Real Gross Domestic Product

Measuring total aggregate production in constant dollars uses which of the following measures?

Corporation

Of the different types of businesses, a _________ has the most government rules and the most government regulations affecting it

United States

Of the following which country has the highest annual real GDP per capital according to the International Monetary Fund and World Bank?

The stock prices of 500 large US firms

One of the most widely followed stock indexes in the United States is the S&P 500. This index represents

Share in the profits of the firm

Owners of a corporation ______________ through dividend payments on shares of that firms stock

Monetary value of all final goods and services produced within a nation in a particular year

The GDP is the:

Accomplish all of the above

The National Income and GDP Accounts help economists and policy makers to

Requires that CEOs personally certify the accuracy of financial statements

The Sarbanes-Oxley Act of 2002

Profits

The _________ a corporation keeps to finance future expansion are known as retained earnings

Employed plus unemployed

The labor force equals the number of people

Employed workers and unemployed workers

The labor force is the sum of

The percentage of the working age population in the labor force

The labor force participation rate is defined as

Wall Street Reform and Consumer Protection Act

The legislation passed in 2010 that was intended to reform regulation of the financial system was the

Frictional and structural unemployment

The natural rate of unemployment is made up of

partnerships and sole proprietorships

The owners control the day to day activities of which of the following types of business?

Only represents the transfer of ownership rights

The purchase of a a share of stock is excluded in the calculation of GDP because it

Expenditures approach and the income approach

The two principle methods of measuring GDP are the

Larger; more difficult

The typical firm in many industries has become _______________ over the past 100 years, and efficiently organizing production has become ________________.

Subtracted from exports when calculating GDP because imports do not constitute production in the United States

The value of US imports is

A yearly interest payment and a principal payment

A bond is a financial security that represents a promise to repay

35 cents

A farmer buys seeds for 15 cents that is used to grow wheat. The farmer sells the wheat to the miller for 30 cents, who makes flour. The flour is sold to the baker for 60 cents and the baker makes bread, which is sold to the grocer for 90 cents. The grocer sells the bread for $1.25. What is the value added for the grocer?

can be found by summing C + Ig + G + Xn.

A nations gross domestic product (GDP):

$2,465

According to the table above, GDP is

Have a fixed number of interest payments; may be dividends forever

Bonds ________ and stocks ___________.

Structural unemployment

By offering training to workers whose firms laid them off because of competition from foreign firms, the federal government is attempting to reduce

The agent; the principals

CEO of Dynadyne corporation has been more concerned with enhancing his lifestyle by having the company pay for expensive corporate retreats than he has been with increasing the value of the company's stock. In this situation, the CEO is ________ and the stockholders are ___________.

Sole Proprietorship

Damian wants to start a business where he is the only owner and the company does not issue stock. The type of business Damian wants to start is...

Payment by a corporation to its shareholders

Dividends are

Closing market price

Dividing the dividend payment by the stock's ________________ determines the dividend yield

Decrease; increase

Due to lowering its prices to compete with its rivals, increased competition from Airbus, and cuts to military spending, Boeing announced it would _______________ the number of persons it employed in 2017 and this would __________ the total number of persons unemployed in the economy.

All of these are differences between the two types of businesses

How do a partnership and a corporation differ?

A stereo system

Examples of nondurable consumer goods include all of the following EXCEPT

That would count the value of intermediate goods twice

GDP does NOT include intermediate goods because

an inside director

Garrison is the chief financial officer (CFO) of the Colorado drone manufacturing company and is also on the company's Board of Directors. Garrison is considered ___________ of the company.

$180 per year for 30 years plus $3,000 at the end of the 30th year

If you purchased a newly issued 30 year bond from Google with a face value of $3,000 and a coupon payment of 6 percent, Google would pay you

Was still only 60.2%

In 2006, before the start of the recession, the employment population ratio was 63.4%. In April 2017, more than six years after the end of the recession, the ratio

Fifth time in history

In August 2011, Standard & Poor's (S&P) changed its rating on US Treasury bonds from "AAA" to "AA+" based on the state of the federal governments budget deficit. This was the ____________ a rating agency had given Treasury bonds less than a rating of "AAA."

3.3 million

In a typical year, new small firms create __________________ jobs.

Add increases in inventories or subtract decreases in inventories

In calculating the GDP national income accountants:

The Sarbanes-Oxley Act

In response to accounting scandals in 2002, the federal government passed legislation requiring, among other things, that auditors disclose any potential conflicts of interest. What is the name of this legislation?

Corporate

In the United States, ________ profits are taxed at both the corporate level and when investors receive dividends

18

In the United States, ___________ percent of all firms are corporations

72

In the United States, ___________ percent of all firms are sole proprietorships

10

In the United States, _________________ percent of all firms are partnerships

A relatively short time, less than six months

In the modern US economy, the typical unemployed person stays unemployed for

Corporations

Limited personal liability is an advantage for

Partnership

Julianna, Gabrielle, and Marcela want to start a business they are the only owners and the company does not issue stock. The type of business they want to start is a...

Invest in a portfolio of financial assets

Mutual funds sell shares to investors and use the funds to

only counting final goods

National income accountants can avoid multiple counting by

An approach to measuring an economy's aggregate performance

National income accounting is

Retained earnings

Profits that are reinvested in a firm rather than paid to the firms owners are called

Nominal GDP adjusted for price changes

Real GDP is

(1,100÷15,000) x 100

Refer to table 20-1. The labor force participation rate for the simple economy equals

Increased by $87.6 billion

Refer to the above table. Between 2009 and 2010 real GDP

$4617.3 billion

Refer to the above table. Real GDP for year 2007 was

121.2

Refer to the above table. The value of the GDP deflator in 2009 is

Decreased; increased

Since 1948, the labor force participation rate for adult men has _____________ and for adult women has __________

Mutual funds

Small savers who only have enough money to buy a few individual financial assets can use ____________ to diversify

Diminishes; increase

Some corporate governance experts believe that serving on a company's board of directors for an extended length of time __________ that member's Independence from the company's CEO. If this is true, it would tend to ________ the principal agent problem.

Not in the labor force

Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as

Mortgages issued to borrowers with flawed credit histories

Subprime mortgages are

$7,100

Suppose that for the economy of Springfield, we have the following information for 2013: consumption expenditures = $4,000; wages = $3,500; gross private domestic investment = $1,300; government expenditures = $2,000; exports = $900; imports = $1,100. Using the expenditure approach what would the GDP be fore Springfield in 2013?

$700 billion

Suppose that in 2013, the total value of all final services produced in a nation was $300 billion; the total value of all final goods produced in that nation was $400 billion; and the total value of all final goods and services produced by that nation's firms in other countries was $200 billion. Gross domestic product was

Employed

The Bureau of Labor Statistics would categorize a person as if they were temporarily away from their job because they were ill

Partnerships; publicly traded companies

Traditionally, Wall Street investment banks had been organized as _____________, but by 2000 they had converted to being _____________.

Almost doubled

Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wish to work full-time were counted as unemployed, the BLS estimates the unemployment rate in April 2017 would have _________ compared to the Measure unemployment rate

The amount of dollar value contributed to a product at each stage of its production

Value added is

Structural, frictional, and cyclical

What are three main types of unemployment?

The owners of the business are personally responsible for paying expenses incurred by the business

What does unlimited liability mean?

A member of the board of directors who does not have a direct management role in the firm

What is an outside director?

Domestic investment exceeds depreciation

When an economy's production capacity is expanding:

Principal of the bond

When an investor buys a corporate bond, the _________ is a loan to the corporation

Bundled together by financial institutions and sold to investors

When mortgage loans are scrutinized, they are

Bundled together by financial institutions and sold to investors

When mortgage loans are securitized, they are

Decreases; falls in the secondary market

When the coupon rate on newly issued bonds _________ relative to older, outstanding bonds, the market price of the older bond __________.

Discouraged workers

Which of the following cause the unemployment rate as measured by the borough of labor statistics to understate the true extent of joblessness?

European countries offer higher unemployment benefits than the United States

Which of the following explains why many European countries have unemployment rates that are higher than in the United States

GDP is not a good measure of a nations overall welfare

Which of the following is a main limitation of GDP

A worker quit his job at the US post office to find more interesting work

Which of the following is an example of a worker experiencing frictional unemployment?

The NASDAQ Composite Index

Which of the following is the most important of the over the counter markets?

A job re-training program

Which of the following policies would reduce structural unemployment

Both I and II ; the purchase of production machinery & an increase in finished goods inventory

Which of the following spending components makes up the largest of Gross Domestic Product (GDP)?

Each year, many new jobs are created and many existing jobs are destroyed

Which of the following statements is true about the US economy

Loans to corporations are made from the sale of corporate bonds

Which of the following takes place in the direct finance market?

The stockholders

Who selects the board of directors of a corporation?

More than 70%

________ of people work at firms that have 50 or more employees.


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