Econ

The country of Monaco (Monte Carlo) has a GDP of about $5 billion ($5,000,000,000), and it has about 30,000 residents. Using these numbers, calculate the GDP per capita in Monaco.

$167,000

About how large is the U.S. economy today in terms of nominal GDP?

$19,000,000,000,000

Last year, the U.S. exported $2 trillion in goods and imported $2.5 trillion in goods. What is the value of net exports?

-0.5 trillion

If a set basket of goods costs $6,000 in the current year and $5,000 in the base year, what is the consumer price index?

120

If CPI was 150 last year, and this year's inflation rate is 10%, what is the new value of CPI?

165. 150 x 1.10 = 165

When was the last time the United States had a double-dip recession?

1982

How many quarters of negative growth must occur before the NBER declares a recession has started?

2

In which year did the U.S. economy reach its last trough in the business cycle?

2009

If the U.S. economy is growing at 2% per year, in what year will GDP double?

35

How much faster does it go from 10,000 to 20,000 if the growth rate goes from 14% to 7%

5 years faster at 14%

If the CPI index increased from 200 to 210, how much inflation occurred?

5% new minus old, divided by old

If frictional unemployment is 3%, structural unemployment is 4%, and cyclical unemployment is 2%, what is the natural rate of unemployment?

7%

How does minimum wage compare to the poverty threshold in the United States today?

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How much faster does it take for a $10,000 investment to increase to $20,000 if the average annual growth rate is 14% compared to 7%?

At 14%, the investment will double 5 years faster

what government organization measures GDP

BLS

In the United States, median income for a household of 4 people is $55,000, while average income is over $200,000. Why is there such a big difference?

Because income inequality is very severe

_____ unemployment is the result of changes in the business cycle.

Cyclical

Which statement about long-run economic growth is true?

It is likely to occur when the capacity to produce goods and services increases

occurs when there is a change in consumer demand or technology requiring that unemployed people retrain for new jobs.

Structural unemployment

Official NBA-logo basketballs that are produced in China would count toward:

U.S. GNP and China's GDP

Which of the following is NOT considered when measuring GDP per capita?

Under the table payments

_____ constitute the bulk of income in our economy.

Wages and salaries

US economy is crowing 2% every year - when will it double

Year 2054

What is a fixed investment?

a purchase of inventory

unemployed

actively looking for work but aren't currently employed

How is CPI measured?

by prices of a representative basket of goods in the economy

Why does Ethiopia (a poor country) achieve high growth rate but Japan (a rich country) has low growth rate

catch-up effect

The largest component of GDP is:

consumption

The periodic fluctuations around the natural rate of unemployment are caused by _____ unemployment.

cyclical

If the inflation rate changes from 5% to 2%, what is this called?

disinflation

The ability to use physical resources in creative ways to produce goods and services is known as

entrepreneurial ability, technology, and ideas.

One way a stable financial system supports economic growth is that it

facilitates the movement of capital from savings to investment.

If an economy is growing at 10%, how long will it take for $1,000 to turn into $4,000?

future = present (growth percent) ^ (yrs) . 4,000 = 1,000 x 1.10 (10%)^ ?

Which of the following is not a cause of inflation?

higher productivity in manufacturing

When countries can no longer finance its debt, and resort to excessive printing of money, this will lead to

hyperinflation

Which would be captured in total factor productivity

impact of a hurricane

frictional unemployment

in between jobs

To have long-term economic growth, the production function suggests

increasing the availability of technology, capital, and labor.

discouraged workers

individuals who would like to work but have given up looking for a job

If you decide to build your own house, in what category of GDP would this appear?

investment

Which of the following components of GDP is not used in the income approach?

net exports

GDP using the income approach?

net interest corporate profits rental income

An example of intangible infrastructure is:

patent laws

If your nominal wage increases by 5% and inflation is 2%, what is the increase in your real wage?

real = nominal - inflation. 3%

best measure of economic growth/standard of living

real GDP per capita

If an economy doubled its GDP over the past 14 years, what was its average annual growth rate?

rule of 70. whenever it says double GDP. divide 70 by number of years. 70 divided by 14

Which of the following is protected from inflation by escalator clauses?

social security benefits

hat is an example of a final good?

something bought directly by the consumer and not by the producer.

The circular flow diagram shows that

spending equals income

structural unemplyoment

structure of the work force has changed

To sustain growth beyond the small fluctuations common in the business cycle, an economy's ability to produce must increase.

true

cyclical unemployment

unemployment that rises during economic downturns and falls when the economy improves