macro

The market system's answer to the fundamental question "What will be produced?" is essentially:

"Goods and services that are profitable."

Over a five-year period GDP in a nation increased from $10 trillion to $15 trillion, while the GDP price deflator increased from 100 to 125. Approximately how much is GDP in year five, stated in terms of year-one dollars?

$12 trillion

Refer to the data. GDP is

$121

Refer to the provided table, and suppose that the firm uses production technique D. If each of the 70 units of Zenia that are produced sells for $1 apiece, then how much will be the total profits of the firm from 70 units of Zenia?

$13

Real GDP in year 3 is:

$150

If the MPC in an economy is 0.75 and aggregate expenditures increase by $5 billion, then equilibrium GDP will increase by:

$20 billion

Refer to the given data. The marginal propensity to consume is:

.80

If the marginal propensity to consume is 0.9, then the marginal propensity to save must be

0.1

Refer to the given data. The marginal propensity to consume is

0.80

The consumer price index was 177.1 in 2001 and 179.9 in 2002. Therefore, the rate of inflation in 2002 was about:

1.6%

At an annual growth rate of 7 percent, real GDP will double in about:

10 years

In an economy, the total expenditures for a market basket of goods in year 1 (the base year) was $5,000 billion. In year 2, the total expenditure for the same market basket of goods was $5,500 billion. What was the GDP price index for the economy in year 2?

110

The unemployment rate in an economy is 7.5 percent. The total population of the economy is 250 million and the size of the civilian labor force is 180 million. The number of employed workers in this economy is

166.5 million

If the MPC is 0.6, the multiplier will be

2.5

What is the unemployment rate for this nation?

33%

Refer to the table. Between years 1 and 2, real GDP per capita grew by approximately __________ percent in Alta.

4

The consumer price index in an economy is 180 one year and 189 the next year. The rate of inflation in the economy over that year period is:

5 percent

Assume the MPC is 2/3. If investment spending increases by $2 billion, the level of GDP will increase by

6 billion

The unemployment rate in Scoob is:

6.9%

Which of the following is most important in increasing a nation's economic growth in the long run?

Higher rates of technological change

Which technique is economically most efficient in producing A?

IV

Which of the following is correct?

MPC + MPS = APC + APS

Which of the following relations is not correct?

MPS = MPC + 1.

College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are:

inferior goods

GDP is the:

monetary value of all final goods and services produced within the borders of a nation in a particular year.

Refer to the above diagram. A decrease in quantity demanded is depicted by a:

move from point y to point x.

Refer to the graphs above. Which of the following best represents a positive demand shock when prices are flexible?

The shift from D2 to D3 in graph B

Which of the following is one of the Five Fundamental Questions?

What goods and services will be produced?

Which of the following would shift the saving schedule upward?

a decrease in wealth

If real GDP rises and the GDP price index has increased,

nominal GDP must have increased.

If we say that a price is too high to clear the market, we mean that:

quantity supplied exceeds quantity demanded.

Cost-push inflation:

reduces real output

If a nation's real GDP increases from 100 billion to 106 billion and its population jumps from 200 million to 212 million, it real GDP per capita will:

remain constant

Refer to the above diagram. A price of $60 in this market will result in:

a surplus of 100 units.

A surplus of a product will arise when price is:

above equilibrium with the result that quantity supplied exceeds quantity demanded.

"Consumer sovereignty" means that:

buyers determine what will be produced based on their "dollar votes" for the goods and services offered by sellers.

Economic growth can best be portrayed as a

rightward shift of the production possibilities curve.

Which of the following is an intermediate good?

the purchase of baseball uniforms by a professional baseball team

At the point where the demand and supply curves for a product intersect:

the quantity that consumers want to purchase and the amount producers choose to sell are the same.

Refer to the table. Per capita GDP was about:

$303 in year 3 in Zorn.

Refer to the given data. If disposable income was $325, we would expect consumption to be:

$305

If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential GDP is

$320 billion

Refer to the data. GDP is:

$417

Nominal GDP in year 3 is:

$450

Refer to the above table. If demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5), equilibrium price and quantity will be:

$8 and 60 units.

If disposable income increases from $912 to $927 billion and MPC = 0.6, then consumption will increase by:

$9 billion

Refer to the above data. In year 4, nominal GDP would be:

$90

A $1 billion increase in investment will cause a

(1/MPS) billion increase in GDP.

Over a ten-year period, the Consumer Price Index doubled. On the basis of this information and using the rule of 70, we can say that the average annual rate of inflation over this period was approximately:

7%

Which of the diagrams for the U.S. economy best portrays the effects of an increase in resource productivity?

A

Which of the following would most likely occur during the expansionary phase of the business cycle?

A and B are complementary goods.

Which of the diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software?

A only

Which of the diagrams for the U.S. economy best portrays the effects of a dramatic increase in energy prices?

B

Which of the diagrams illustrates the effect of a governmental subsidy on the market for AIDS research?

C only

If Matt's disposable income increases from $4,000 to $4,500 and his level of saving increases from $200 to $325, it may be concluded that his marginal propensity to:

Consume is .75

Which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles?

D only

Which of the following would most likely occur during the expansionary phase of the business cycle?

Demand-pull inflation

Suppose an economy in long-run equilibrium experiences a supply shock from substantially higher energy costs. In which of the following ways are real GDP and the price level most likely to change?

Decrease, Increase

In the expenditures approach of national income accounting, C, Ig, and G include expenditures for:

Domestically produced as well as imported goods and services

Refer to the tables. Suppose that Duckistan and Herbania are each producing 14 units of civilian goods and 2 units of military goods. Then

Duckistan is fully employing its resources, but Herbania is not.

When local police and fire departments buy new cars for their operations, these are counted as part of:

G

The graph above represents a competitive market for a product where the government has set a price ceiling of 0A. What quantity will buyers be able to buy after the imposition of the price ceiling?

OJ

If disposable income is $900 billion when the average propensity to consume is 0.9, it can be concluded that:

Saving is $90 billion

Refer to the above supply and demand graph. In the graph, line S is the current supply of this product, while line S1 is the optimal supply from the society's perspective. One solution to this externality problem is to:

Tax producers by the amount DE per unit

There will be a surplus of a product when:

consumers want to buy less than producers offer for sale.

The largest component of total expenditures in the United States is:

consumption

If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced:

deflation of 3.33 percent

If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced

deflation of 3.33 percent.

f X is a normal good, a rise in money income will shift the:

demand curve for X to the right.

If Z is an inferior good, an increase in money income will shift the:

demand curve for Z to the left.

Economic growth is best defined as an increase in:

either real GDP or real GDP per capita

If the price level is expected to increase by three percent next year and a key market interest rate is seven percent, the real rate of interest is:

four percent

Assume that Kyle is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Kyle will be considered as:

frictionally unemployed.

Refer to the diagram. Other things equal, a shift of the aggregate supply curve from AS0 to AS1 might be caused by a(n)

increase in government regulation.

At the current price there is a shortage of a product. We would expect price to:

increase, quantity demanded to decrease, and quantity supplied to increase.

Refer to the tables. Opportunity costs are

increasing in both Duckistan and Herbania.

Broadly defined, competition involves:

independently acting buyers and sellers and freedom to enter or leave markets.

The unemployment rate is the:

percentage of the labor force that is unemployed.

Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price index rises from 100 to 105. The person's real income will

rise by about 15%

The economic function of profits and losses is to:

signal that resources should be reallocated.

Refer to the tables. Opportunity costs of producing military goods are

smaller in Duckistan than Herbania.

If workers or businesses anticipate that an expansionary monetary policy will increase inflation, the effects of this policy on real output will be:

smaller, if workers demand and receive higher wages