Econ 2105 Test 2

Real GDP; the price level

A decrease in aggregate demand causes a decrease in _____ only in the short run, but causes a decrease in _____ in both the short run and the long run.

Frictionally unemployed

A student who just graduated from college but has not found a job would most likely be

14 years

According to "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Price level; the real value of household wealth

According to the "wealth effect," when the ____ falls, the ___ rises.

Real GDP; the price level

An increase in aggregate demand causes an increase in _____ only in the short run, but causes an increase in ____ in both the short run and the long run.

Expansion; short run

An increase in aggregate demand results in a(n) _____ in the _____.

Minus personal tax payments

Disposable personal income equals personal income...

The total market value of final goods and services produced in the economy during a period of time

Gross domestic product is calculated by

Greater than

Gross domestic product is generally _____ national income

125

If nominal GDP is $5 trillion and real GDP is $4 trillion, the GDP deflator is

2.9%

If real GDP grows by 3% in 2011, 3.2% in 2012, and 2.5% in 2013, what is the average annual growth rate of real GDP?

is 3.75%

If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion, the growth rate of real GDP between 2012 and 2013

80%

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

5%

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

Decrease

If the price level rose in three consecutive years from 100 to 120 to 140, then the annual inflation rate over those years would

GDP will be below potential GDP

If the short-run aggregate supply increases by less than the long-run aggregate supply, then, at the short-run equilibrium,

8 years and 9 months

If you invest $10,000 in a bond that earns 8% interest per year, how many years will it take to double your money?

$5 billion

If, in a closed economy, real GDP is $30 billion, consumption is $20 billion, and government purchases are $5 billion, what is total saving in the economy?

Above the market wage, causing labor demand to be less than labor supply

Minimum wage laws cause unemployment because the legal minimum wage is set

Minus the consumption of fixed capital

National income equals gross domestic product...

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

Inflation rises and GDP falls

Stagflation occurs when

Out of the labor force

The Bureau of Labor Statistics would categorize a retiree who is not working as

Lowers; recession; raises; expansion

The automatic mechanism _____ the price level in the case of _____ and _____ the price level in the case of _____.

Capital stock

The total amount of physical capital available in a country is known as the country's

GNP; GDP

The value of what a U.S. owned McDonald's produces in South Korea is included in the U.S. ______ and South Korean ______

G= $5 trillion T= $5 trillion TR= $1 trillion

Under which of the following circumstances would the government be running a deficit?

$3 trillion

What is investment in a closed economy if you have the following economic data? Y= $10 trillion C= $5 trillion TR= $2 trillion G= $2 trillion

The financial crisis

Which of the following is one reason for the decline in aggregate demand that led to the recession of 2007-2009?

Negative $1 trillion (a deficit of $1 trillion)

Y= $12 trillion C= $8 trillion I= $2 trillion G= $2 trillion TR= $2 trillion T= $3 trillion Based on the information above, what is the level of public saving?

$3 trillion

Y= $12 trillion C= $8 trillion I= $2 trillion G= $2 trillion TR= $2 trillion T= $3 trillion Based on the information above, what is the level of private saving in the economy?