Econ Final

If the consumer price index was 100 in the base year and 106 in the following year, then the inflation rate was a. 10.6 percent. b. 6 percent. c. 106 percent. d. 1.06 percent.

6 percent.

Which of the following provide benefits to society at large and not just to the person(s) who pursues it? a. Neither education, nor technological knowledge that is a public good b. Technological knowledge that is a public good, but not education c. Both technological knowledge that is a public good and education d. Education, but not technological knowledge that is a public good

Both technological knowledge that is a public good and education

Each day Sue works 8 hours and produces 7 units of goods and services. Mary works 10 hours each day and produces 10 units of goods and services. It follows that a. Mary's productivity is higher than Sue's. b. Sue's productivity is higher than Mary's. c. Sue's income per day will be higher than Mary's. d. Sue's income per hour will be higher than Mary's.

Mary's productivity is higher than Sue's.

Net exports equal a. exports plus imports. b. imports minus exports. c. Y − (C + I + G). d. Y − (C − I − G).

Y − (C + I + G).

Industrial machinery is an example of a. technological knowledge. b. a production function. c. an item which always has the property called constant returns to scale. d. a factor of production that in the past was an output from the production process.

a factor of production that in the past was an output from the production process.

Disposable personal income is a. the income that households and non-corporate businesses receive. b. the total income earned by a nation's permanent residents. c. the total income earned by a nation's residents in the production of goods and services. d. the income that households and businesses have remaining after satisfying their obligations to the government.

d. the income that households and businesses have remaining after satisfying their obligations to the government.

In the actual economy, households a. spend all of their income. b. save all of their income. c. divide their income among spending, taxes, and saving. d. buy all goods and services produced in the economy.

divide their income among spending, taxes, and saving.

The term economists use to describe a situation in which the economy's overall price level is rising is a. recession. b. expansion. c. inflation. d. growth.

inflation

An understanding of the best ways to produce goods and services is called a. technology. b. physical capital. c. human capital. d. productivity.

technology

Janet is a farmer. Which of the following are included in her human capital? a. Her tractor and what she's learned from experience b. Her tractor but not what she's learned from experience c. Neither her tractor nor what she's learned from experience d. What she's learned from experience but not her tractor

What she's learned from experience but not her tractor

In the United States, if the price of imported oil rises so that the prices of gasoline and heating oil rise, then the a. GDP deflator rises much more than does the consumer price index. b. GDP deflator and the consumer price index rise by about the same amount. c. consumer price index rises slightly more than does the GDP deflator. d. consumer price index rises much more than does the GDP deflator.

consumer price index rises much more than does the GDP deflator.

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in a. neither Mexican GDP nor U.S. GDP. b. U.S. GDP, but it is not included in Mexican GDP. c. both Mexican GDP and U.S. GDP. d. Mexican GDP, but it is not included in U.S. GDP.

Mexican GDP, but it is not included in U.S. GDP.

Consider a small economy in which consumers buy only two goods: pretzels and cookies. In order to compute the consumer price index for this economy for two or more consecutive years, we assume that a. neither the number of pretzels nor the number of cookies bought by the typical consumer changes from year to year. b. the number of pretzels bought by the typical consumer is equal to the number of cookies bought by the typical consumer in each year. c. neither the price of pretzels nor the price of cookies changes from year to year. d. the percentage change in the price of pretzels is equal to the percentage change in the price of cookies from year to year.

neither the number of pretzels nor the number of cookies bought by the typical consumer changes from year to year.

The GDP deflator is the ratio of a. nominal GDP to real GDP multiplied by 100. b. real GDP to the inflation rate multiplied by 100. c. nominal GDP to the inflation rate multiplied by 100. d. real GDP to nominal GDP multiplied by 100.

nominal GDP to real GDP multiplied by 100.

Changes in the GDP deflator reflect a. neither changes in prices nor changes in the amounts being produced. b. both changes in prices and changes in the amounts being produced. c. only changes in the amounts being produced. d. only changes in prices.

only changes in prices.

A recession has traditionally been defined as a period during which a. nominal GDP declines for four consecutive quarters. b. real GDP declines for two consecutive quarters. c. nominal GDP declines for two consecutive quarters. d. real GDP declines for four consecutive quarters.

real GDP declines for two consecutive quarters.

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010, a. real output rose and the price level fell. b. real output and the price level both rose. c. real output and the price level both fell. d. real output fell and the price level rose.

real output and the price level both rose.

Social Security payments are indexed for inflation using a. the CPI. b. the GDP deflator. c. the PPI. d. real interest rates.

the CPI.

GDP is defined as the a. value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time. b. value of all goods and services produced within a country in a given period of time. c. value of all final goods and services produced within a country in a given period of time. d. value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.

value of all final goods and services produced within a country in a given period of time.

If the nominal interest rate is 5 percent and the real interest rate is 7 percent, then the inflation rate is a. 2 percent. b. 0.4 percent. c. 12 percent. d. −2 percent.

−2 percent.