ECN 202 Exam #1 Quizzes

In 2015, the German GDP was $8 trillion, consumption spending was $2 trillion, final government spending was $1 trillion, investment was $3 trillion and imports were $1 trillion. The trade balance of Germany in 2015 was $_______ trillion _________.

2; surplus

If the accounting identity has 4 variables, we can know the value of the unknown variable if we know the values of ___________ variables.

3

In 2015, the German GDP was $8 trillion, consumption spending was $2 trillion, final government spending was $1 trillion, investment was $3 trillion and imports were $1 trillion. The value of German exports in 2015 was $_______trillion

3

Between 2000-2002, GDP per capita of Spain grew at 2% per year. If GDP per capita equals to $25,000 in 2000, GDP per capita in Spain equals to $................... in 2002.

26010

James is a high school student. James works after school at a fast food restaurant. James is __________.

employed

Deposits and withdrawal are examples of

flows

I have changed 3 jobs in the past years. My salary increased from $50K to $80K, what is a rate of change of my salary per job relocation?

$10K

In 2015, Argentina's GDP was $600 billion. If its population size was 40 million. Argentina's GDP per capita equals to

$15,000

negative relationship

- when X increases, Y decreases and vise versa - both variables move in opposite directions

positive relationship

- when X increases, Y increases and vise versa - both variables should always move in the same direction

A linear function is given as 4X + 3Y = -9. Please rearrange it into a standard form. What is a Y-axis intercept?

-3

A linear function is given as 4X + 3Y = -9. Please rearrange it into a standard form. What is the slope of this linear function?

-4/3

Suppose there is a linear function. A line runs through two points: (1, 0) and (0, -5). When writing down a standard form of a linear function, what is the Y-axis intercept of this function?

-5

In 2015, Argentina's GDP was $600 billion. In 2016, Argentina's GDP was $550 billion. What was the GDP growth rate between 2015-2016?

-8.33%

Suppose GDP per capita of Chile increased by 4% between 2012-2013 and the GDP per capita number equals to 12,000 in 2013. What is the GDP per capita in Chile in 2012?

11538.46

If nominal GDP in 2001 is $18 trillion and real GDP is $15 trillion, the GDP deflator in 2001 is

120

If your monthly salary in 2018 was $1800 and the CPI (base year is 2010) was 150, your real salary (in terms of 2010 dollars) equals to $__________.

1200

Suppose the U.S. Bureau of Labor Statistics classifies 135 million people as employed and the unemployment rate is 10%. How many people are in the labor force in this example?

150 million

According to the Rule of 72, how many years does it take for a country to double its size if it grows at 4% per year?

18

In 2014, when the Spanish economy's private saving was $4 billion and national gross investment was $2 billion, the Spanish economy's net private saving was $________billion

2

In this economy where there are households, banks, and firms, when households' income equals to $6M and they spend $4 as consumption, households' savings equal to $____M.

2

In this economy where there are only households and firms, the total money spent on all production equals to $15M. If the business needs to split their income to employees, landlords, and their profit. Suppose that the business received profit $6M and rents paid to landlords equal to $7M, employees' wages equal to $_____M.

2

If the Chinese Nominal GDP in 1980 is $4 billion and the deflator (the base year is 2000) is 20. The real Chinese GDP equals to $___________ billion.

20

If nominal GDP in 2001 is $18 trillion and real GDP is $15 trillion. Suppose we use 2000 as the base year, what is the inflation rate between 2000 and 2001?

20%

In this economy where there are only households and firms, the total money spent on all production equals to $10M. If the business needs to split their income to employees, landlords, and their profit. Suppose that wages paid to employees equal to $4M and rents paid to landlords equal to $3M, the business receives profit equals to $_____M

3

If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 620,000, what is the unemployment rate?

3.1%

According to the Rule of 72, how many years does it take for a country to double its size if it grows at 2% per year?

36

If the Chinese Nominal GDP in 2007 is $60 billion and the deflator (the base year is 2000) is 150. The real Chinese GDP equals to $__________ billion.

40

Suppose that the total income can be separated into the income for labor and the income for capital. In 2007, we know that the U.S. labor income share was 55%, it can imply that the U.S. capital income share was _%

45%

If the accounting identity has 6 variables, we can know the value of the unknown variable if we know the values of ___________ variables.

5

Suppose there is a linear function. A line runs through two points: (1, 0) and (0, -5). When writing down a standard form of a linear function, what is the slope of this function?

5

A company produced 5 dishwasher machines in 2010. The company sold 6 in 2010 (by selling 1 dishwasher machine from their inventory from last year.) The market value of the dishwasher machines in 2010 was $100 per unit. What is the value of this company's output that will be included in the 2010 GDP?

5 * 100 = $500

In this economy where there are only households and firms, if the total money spent on goods equals to $500, the total income equals to $______M

500

According to the Fisher equation, when I borrow from Well Fargo in which I pay 7% annual interest rate, the real interest rate is _______% when inflation this year is 1%.

6

In the past 5 years, I gained 30lbs, what is the rate of change of my weight per month ?

6 lbs

the GDP deflator in year 2 is 110 and the GDP deflator in year 3 is 118. The rate of inflation between years 2 and 3 is

7.27%

A company produced 8 dishwasher machines in 2010. The company sold 6 in 2010 and added 2 to its inventories. The market value of the dishwasher machines in 2010 was $200 per unit. What is the value of this company's output that will be included in the 2010 GDP?

8 --> 6 in 2010 + 2 to inventory (8 - 6 = 2 + 2 = 4) --> 4 * $200 = $1,600

If the labor force is 320,000 and the total population 16 years of age or older is 400,000, the labor-force participation rate is

80%

percent change formula

= (final - initial) / (initial) * 100

percent change aims to find how much the number changed given the initial value

= Y2 - Y1 / Y1 * 100

a rate of change describes how one quantity changes in Y in relation to a unit of changes in X

= changes in Y / changes in X

The Bureau of Labor Statistics treat discouraged workers as ...

not part of the labor force

Trade deficit means

Imports higher than exports

How is the value-added approach to measuring GDP calculated?

The sum of the cost of raw materials and how much market value is added at each stage of production

Income that Mexican citizens earn in the U.S. counts in

U.S. GDP

linear function formula

Y = c + mX c: y-axis intercept m: slope positive slope = positive relationship negative slope = negative relationship

The correct formula to calculate GDP based on its spending components is:

a) Consumption + Government Spending + Exports - Imports b) Consumption + Investment + Government Spending + Exports + Imports c) Consumption + Investment + Government Spending + Exports - Imports d) Consumption + Investment + Government Spending c)

Which one is NOT the advantage of GDP?

a) GDP allows us to compare the health of economy between countries. b) GDP can include both market and non-market activities. c) GDP helps policymakers to design the good policy package. d) GDP helps us to understand better what happened during the 1930s Great Depression. b)

Which one is NOT a shortcoming of GDP?

a) GDP includes some 'bad' economic activities such as deforestation. b) GDP cannot capture a change in a quality of the product. c) GDP cannot separate between residential and nonresidential investment. d) GDP recognizes the underground economy. c)

Which one of the following is closest to be considered as a normative question?

a) How much did the Indian economy grow last year? b) What is the unemployment rate? c) What is the optimal level of inequality? d) What was the inflation rate in the U.S. in 2017? c) What is the optimal level of inequality?

Which economist has a biggest influence on the beginning of macroeconomics study?

a) Karl Marx b) David Ricardo c) Adam Smith d) John Maynard Keynes d) John Maynard Keynes

Which one of the following is closest to be considered as a positive statement?

a) Reducing unemployment should be the main goal of the government. b) The government should keep the inflation rate below 4%. c) Most economists believe the unemployment rate will increase next year. d) The benefits of economic growth should be equally distributed. c) Most economists believe the unemployment rate will increase next year.

Which one is NOT the cause of falling labor income share?

a) The COVID-19 Pandemic b) The adoption of more machines in factories c) Superstar firms d) declining labor protection a)

In this economy, there are households, banks, firms, and government. If the government's revenue is $20M and it spends $40M, the government has _______ at _________.

a) budget surplus; $10M b) budget deficit; $10M c) budget surplus; $20M d) budget deficit; $20M d) budget deficit; $20M

In this economy, there are households, banks, firms, and government. If the government's revenue is $60M and it spends $50M, the government has _______ at _________.

a) budget surplus; $20M b) budget surplus; $10M c) budget deficit; $10M d) budget balance b) budget surplus; $10M

Which of the following is an example of a final good or service?

a) coffee beans Starbucks purchases to make coffee b) lumber purchased by a construction company to used in building houses c) wheat a bakery purchases to make bread d) a computer purchased by Federal Express to track shipments d) a computer purchased by Federal Express to track shipments

Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then:

a) exports exceed imports by $50 billion. b) imports exceed exports by $50 billion. c) imports exceed exports by $150 billion. d) exports exceed imports by $150 billion. a)

According to the textbook, which one is NOT considered as an economic institution?

a) firms b) prices c) market d) government b) prices

Which one is the example of a stock variable?

a) income b) savings c) investment d) deposits b) savings

Which one is NOT a main issue in microeconomics?

a) inflation b) cost minimization c) utility maximization d) externality a) inflation

What is an example of negative externality?

a) pollution b) universal healthcare c) national park d) education a) pollution

Which scenario can most likely occur after a shortage of goods that can bring the market back to equilibrium?

a) producers will leave the market b) the input cost will decline c) consumers choose to bid up the price d) government will set the price ceiling c) consumers choose to bid up the price

a shortage occurs when...

a) supply increases but the demand curve stays the same. b) demand decreases but the supply curve stays the same. c) the quantity demanded exceeds the quantity supplied. d) the quantity supplied exceeds the quantity demanded. c) the quantity demanded exceeds the quantity supplied.

Investment (I) includes:

a) the amount spent on new factories and machinery. b) the amount spent on consumer goods that last more than one year. c) the amount spent on purchases of art. d) the amount spent on stocks and bonds. a)

Which scenario can most likely occur after a surplus of goods that can bring the market back to equilibrium?

a) the input cost will increase b) consumers start to produce goods by their own c) government will set the price floor d) producers start to decrease the price d) producers start to decrease the price

a demand curve shows...

a) the quantities that buyers are willing to purchase at different incomes. b) the quantities that buyers are willing to purchase at different prices. c) the quantities that sellers are willing to supply at different prices. d) household expenditures over time. b) the quantities that buyers are willing to purchase at different prices.

a supply curve represents...

a) the quantities that sellers are willing to purchase at various prices. b) the quantities that buyers are willing to purchase at various prices. c) the quantities that sellers are willing to sell at various prices. d) the quantities that buyers are willing to sell at various prices c) the quantities that sellers are willing to sell at various prices

a surplus occurs when...

a) the quantity supplied exceeds the quantity demanded. b) supply increases but the demand curve stays the same. c) the quantity demanded exceeds the quantity supplied. d) demand decreases but the supply curve stays the same. a) the quantity supplied exceeds the quantity demanded.

A market is said to be in equilibrium when ...

a) the supply intentions of all sellers are realized. b) the needs of consumers are fulfilled. c) demand is fully satisfied at different prices. d) the quantity demanded equals the quantity supplied. d) the quantity demanded equals the quantity supplied.

Which one is the example of a flow variable?

a) wealth b) inventory c) savings d) GDP

if the output of a certain year equals zero, it means that

actual GDP = potential GDP

In this economy where there are households, banks, and firms, when households' income equals to $10M and they spend $12M as consumption, households need to _______.

borrow $2M from banks

In 2016, from the information in the previous question, Poland was a net ________ to the rest of the world.

borrower

According to the balance of payments, suppose that at the beginning, the US and France both start every account from zero. If France can export more wine to the US at $100M, the US can balance this act by

both are correct

According to the balance of payments, suppose that at the beginning, the US and France both start every account from zero. If France can export more wine to the US at $100M, France can balance this act by

buying bonds from the US banks by $100M

Discouraged workers are people ...

who want employment but have given up looking for a job.

Tom's salary this year increases by 5%. However, we found that inflation this year is 6%. Therefore, Tom's real salary __________ by ______%.

decrease; 1

According to the balance of payments, suppose that at the beginning, the US and France both start every account from zero. If France can export more wine to the US at $100M, the US's current account

decreases by $100M

If Poland in 2016 had trade deficit at $3 billion and the private savings was in deficit at $2 billion, we know that the government budget was in ________ at $____ billion.

deficit; 1

In 2014, when the Spanish economy's total taxes were $2 billion and national government spending was $3 billion, the Spanish government budget was in ________ by $________billion

deficit; 1

If Canada in 2018 had current account deficit at $2 trillion and the private net savings was in surplus at $1 trillion, we know that the government budget was in____________ at $_______ trillion

deficit; 3

Lisa spends most of her time taking care of her home and children, but she helps in her husband's computer software business all day on Friday, Saturday, and Sunday. Lisa is counted as __________

employed

Sam has been applying for jobs in the past few weeks. Last week she drove for Uber for two hours and received $35. Sam is considered as ________.

employed

In 2016, the German GDP was $8 trillion. If consumption and investment spending were the same as last year (see the previous question) and trade surplus decreased by $1 trillion from the previous year, we can imply that ____________in 2016

government spending increased by $1 trillion

consumption is the purchase of goods and services by

households

Normal GDP measures the value of all goods and services

in current dollars

Real GDP is gross domestic product measured

in the prices of a base year

According to the balance of payments, suppose that at the beginning, the US and France both start every account from zero. If France can export more wine to the US at $100M and then France does nothing, their reserve account will

increase by $100M

The annualized growth rate should not be applied when the economy ____________ because you may see the overstated negative growth level.

is hit by the economic recession.

From the two questions above, we can conclude that South Korea has been the net ________ to the world

lender

no relationship

no clear pattern between two or more variables and we call that an inconclusive relationship

if the GDP deflator is greater than 100, then

nominal GDP is greater than real GDP

Katherine has been thinking about looking for work in the past four weeks, but there was no specific effort she has made. Katherine is counted as _________.

not in labor force

According to the CPI and GDP Deflator data, we know that inflation is

procyclical

If South Korea in 2019 had trade surplus at $10 billion and the government budget was in deficit at $3 billion, we know that the net private savings were in _______ at $_____billion

surplus; 13

If South Korea in 2016 had trade surplus at $5 billion and the government budget was in surplus at $1 billion, we know that the net private savings were in _______ at $_____billion

surplus; 4

The flow of funds accounts are collected and maintained by

the Federal Reserve system

inflation is an increase in

the overall price level

Susan reported that 3 weeks ago she applied for jobs at a bank and at a mortgage lending company. She currently is waiting to hear back from both businesses. Susan is considered to be ________.

unemployed

Diane lost her job and immediately started looking for another job. As a result the

unemployment rate increases