macro econ exam 2
it will remain the same
Suppose that both your nominal wage and prices double. What will happen to the real purchasing power of your wage?
when consumed by one individual, can still be consumed by others.
A public good is a good that:
does not pay for their own consumption of a public good.
According to economist, a free rider is someone who what?
Increases the price of the domestic good to the consumer.
An import quota does which of the following?
either the price level or output both
An increase in nominal GDP implies an increase in what?
MSC
Costs passed on to third parties are included in:
1% 2-1 = 1%
If inflation is 1% and nominal GDP goes up 2%, real GDP goes up by how much?
18%
If nominal GDP increases from $10 trillion to $12 trillion and the price level rises by 2%, by approximately how much has real GDP increased?
well-being of society may have increased or decreased
If nominal GDP rises
it may have increased or decreased.
If nominal GDP rises, what happens to the well-being of society?
it rose by 3%
If prices rose by 5% and nominal output rose by 8%, what happen to real output?
10 percent
If the labor force is 150 million and the numbers of people who are looking for jobs but are unable find them is 15 million, what is the unemployment rate?
20,000
If you spend $100,000 and sales tax rate is 20%, what is your tax payment?
5% 100,000 x (0.05) = 5000
If your income is $100,000 and your tax payment is $5,000, what percent of your income are you paying in sales tax?
proportional 5000/100,000 6000/120,000
If your payment increases from $5000 to $6000 when income increases from $100,000 to $120,000, the tax you are paying is
tariffs.
In the early 2000s the U.S. government imposed import duties on Chinese frozen and canned shrimp. These duties are an example of what?
a quota
In the early 2000s, U.S. clothing retailers sued the U.S. government to stop imposing limits on Chinese textile imports. Such limits are an example of what?
public good
National defense is which of the following
direct control by the owner
One advantage of a sole proprietorship over a partnership is:
Social security taxes.
State and local governments do not receive income directly from which source?
always equal to 100
The Consumer Price Index in its base year is what?
externality
This exists when cost or benefits are passed on to third parties outside transaction.
exports minus import
What are net exports?
people losing a job when their skills become obsolete due to technological innovations.
What causes structural unemployment?
peak
What is the top of the business cycle is called?
cyclical unemployment.
What type of unemployment is caused by recession?
national defense
Which is the best example of a public good?
double taxation
Which of the following is a disadvantage of a corporation
greater ability to obtain funds.
Which of the following is an advantage of a corporation over a sole proprietorship?
it has only one owner who has unlimited liability
Which of the following is true for a sole proprietorship?
Cigarette smoke.
Which of the following would most likely generate a negative externality?
education
Which of the following would most likely generate a positive externality?
MSB
benefits passed on to third parties are included in:
structural unemployment
is due to mismatch of skills. Occurs when workers do not have the skills necessary to find the jobs that are available.
frictional unemployment
is due to searching for a job.
Okun's rule
is for every 1% change in unemployment, output (GDP) will change in the opposite direction by 2.5%
positive externality
this exists when a BENEFIT is passed on to third parties outside the transaction
negative externality
this exists when a COST is passed on to third parties outside the transaction
goes up 2.5%
unemployment rate falls 1 percentage point
goes up 5%
unemployment rate falls 2 percentage points
goes down 2.5%
unemployment rate increases 1 percentage point
