EGB Quizzes

All of the following actions are computed as investments in the National Accounts except for: A clothing store purchases a new computer. IBM's building a new factory. Carla Taylor purchases a newly constructed house. Luca Reddit buying 100 shares of Twitter.

Luca Reddit buying 100 shares of Twitter

If the GDP deflator in 2019 equals 1.1 and nominal GDP in 2019 equals $21.5 trillion, what is the value of real GDP in 2019? $21.5 trillion $23.65 trillion $19.5 trillion $15 trillion

$19.5 trillion

According to the model in Chapter 3, when taxes decrease without a change in government spending: consumption and investment both increase. consumption and investment both decrease. consumption increases and investment decreases. consumption decreases and investment decreases.

consumption increases and investment decreases

According to the definition used by the US Bureau of Labor Statistics, people are considered to be unemployed if they: do not have a job, but have looked for work within the past 4 weeks. are out of a job, but not looking for work. are absent from work because of bad weather or illness. retired from the labor force before age 65.

do not have a job, but have looked for work within the past 4 weeks

In the long run, the level of national income in an economy is determined by its: factors of production and production function real and nominal interest rates government budget surplus or deficit rate of economic and accounting profit

factors of production and production function

To avoid double counting in the computation of GDP, only the value of ________ goods are included. final used intermediate consumption

final

When government spending increases and taxes are increased by an equal amount, interest rates: increase. remain the same. decrease. can vary wildly.

increase

In the national income accounts, all of the following are classified as government purchases except: services provided by US senators purchases of military hardware payments made to social security recipients services provided by police officers

payments made to social security recipients

Consumption depends _________ on disposable income, and investment depends ________ on the real interest rate. positively; positively positively; negatively negatively; negatively negatively; positively

positively; negatively

With a Cobb-Douglass production function, the marginal product of capital will increase if: the quantity of labor increases the quantity of capital increases labor's share of output increases average capital productivity decreases

the quantity of labor increases

With the Cobb-Douglass production function, the real wage will increase if: the supply of labor increases total factor productivity increases the price of output increases the amount of capital decreases

total factor productivity increases

In an economy described by a Cobb-Douglas production function, when average labor productivity is growing rapidly... workers will experience high rates of real wage growth. economic profits will be positive. labor's share of income will be decreasing. labor's share of income will be increasing.

workers will experience high rates of real wage growth

Assume that a firm buys all the parts that it puts into a computer for $1,200, pays its workers $1,200 to fabricate the computer, and sells the computer for $3,000. The value added of the firm is: $3,000 $1,800 $600 $1,400

$1,800

The CPI is determined by computing: The price of a basket of goods and services that changes each year, relative to the same basket in a base year. The average of prices of all goods and services Nominal GDP relative to real GDP The price of a fixed basket of goods and services, relative to the price of the same basket in a base year.

The price of a fixed basket of goods and services, relative to the price of the same basket in a base year.

The marginal product of capital is: output divided by capital input. additional output produced when one additional unit of capital is added. additional output produced when one additional unit of capital and one additional unit of labor are added. value of additional output when one dollar's worth of additional capital is added.

additional output produced when one additional unit of capital is added

If bread is produced by using a constant returns to scale production function, then if the: number of workers is doubled, twice as much bread will be produced amount of equipment is doubled, twice as much bread will be produced amounts of equipment and workers are both doubled, four times as much bread will be produced. amounts of equipment and workers are both doubled, twice as much bread will be produced

amounts of equipment and workers are both doubled, twice as much bread will be produced

Using the model developed in Chapter 3, but now assume that consumption decreases, when interest rates increase.If there is a technological advance that leads to an increase in investment demand, then: investment decreases and the interest rate rises. investment is unchanged and the interest rate rises. investment increases and the interest rate rises. investment and the interest rate are both unchanged.

investment increases and the interest rate rises

Real GDP is a better measure of economic well-being than nominal GDP because real GDP: includes the value of government transfer payments. measures changes in the quantity of goods and services produced by holding prices constant. adjusts the value of goods and services produced for changes in the foreign exchange rate. excludes the value of goods and services exported abroad.

measures changes in the quantity of goods and services produced by holding prices constant