Macro Economics Exam 1
an economy's total output
Gross domestic product (GDP) is a measure of:
absolute
If one country has a(n) _____________ advantage in the production of one item, it can always produce more of the item than another nation.
$140
If personal consumption is $100, investment is $25, gov. purchases total $25, imports equal $20, and exports equal $10, then GDP equals:
$11.3 trillion
If the GDP is $13 trillion for a given year and the GDP deflator for that year is 115, then the real GDP is:
disinflation.
If the cost of a during this period the typical market basket is 400 in 2018, 410 in economy is undergoing 2019, and 405 in 2020, then
increases consumption possibilities
International trade:
overstates
Most economists believe that the consumer price index __________the rate of inflation.
$13,241.7 billion
Nominal GDP in the first quarter of 2010 was $14,592.3 billion. The GDP deflator was 110.2 in the first quarter of 2010. Real GDP for the first quarter of 2010 was equal to:
10%
The nation of Workovia has a population of 15 million. 10 million are in the labor force and 9 million are working. The unemployment rate is:
rent
The payment to land is called:
spending; income
The simple circular flow diagram shows that economic aggregates can be calculated either by the ___________ flows in the product market or by the _________ flowing to households in the resource market.
John Maynard Keynes
The study of macroeconomics as a specific discipline is due primarily to:
Inflation and unemployment
The twin perils of the modern macro economy are said to be:
expenditure and income
The two approaches used by government in estimating GDP are:
fails to understand that all voluntary trades benefit both parties involved
"The economic wealth of this country was built primarily by some individuals profiting from a transaction, whereas others were harmed by that transaction." This statement indicates that the author:
peak
A ________ in the business cycle usually means the economy is operating at its capacity.
specialization, consumption, and international trade
Drivers of economic growth are:
unemployment drops
During a typical economic recovery:
inside the U.S. by foreign citizens
GNP does not include outputs produced ______________
outside the U.S. by U.S. citizens
GNP includes outputs produced __________
commustate economy
Government decides what a society wants:
GDP
the total market value of all final goods and services produced annually in an economy in the given country:
GNP (Gross National Product)
total dollar value of goods & services produced by a nation at home or away
cyclical unemployment
unemployment that rises during economic downturns and falls when the economy improves
the purchase of a new tv by a household
What is an example of personal consumption expenditures?
$41,666.67
What is your new salary if you earned $40,000 last year, the consumer price index went from 120 to 125, and your salary is adjusted by the rate of inflation annually?
cyclical unemployment is zero
When the economy is operating at the natural rate of employment:
services
Which component of GDP includes college tuition?
The Great Depression
Which event has significantly influenced the development of macroeconomic ideas?
They do not capture most nonmarket economic activity
Which is a criticism of the national income and product accounts?
Purchases of common stock by investors
Which is not included in the gross private domestic investment?
high level of comparative advantage
Which of the following does NOT impose a limit on the amount of international trade?
Many federal benefits and income tax rates are indexed to the consumer price index
Which of the following is NOT generally considered a problem with using the consumer price index to measure consumer prices?
Imported goods
Which of the following is not included in the GDP deflator?
Only the PPI measures net revenues received by firms
Which of the following statements describes a difference between the consumer price index (CPI) and the producer price index (PPI)?
spend the money or put it in savings
Which of the following two things can people do with money received as disposable personal income?
David Ricardo
Who developed the theory of comparative advantage?
Production efficiency
______ occurs when goods and services are produced with as few resources as possible
allocative efficiency
______ occurs when the mix of goods and services produced is most desired by society
cyclical
_________ unemployment is the result of changes in the business cycle.
Disinflation
__________ is a reduction in the rate of inflation
Distribution
__________ refers to the way an economy allocates goods and services to consumers:
6.5 %
An economy has a population of 226.500. Of them, seeking work, and 35,000 have given up looking part-time, and 151,000 people work full-time. This economy's unemployment rate 12,500 are unemployed and actively for a job. Also, 28,000 people work Round the percentage to one decimal place ; for example , 0.0436 is 4.4 % . )
Fell by 1%
Arlin's got a 5% raise while the rate of inflation was 6%. Arlina's standard of living:
capitalist economy
Consumers decided what products they want:
Food and energy
Core inflation is found by removing __________ from the consumer price index
shift to the right in the PPF
Economic growth is shown as:
land
Economists refer to "rent" as a payment to:
exist, and people are willing to take them, but it takes some time to bring the two together.
Frictional unemployment occurs when job openings:
$51,818
If your salary was $50,000 last year and this year you receive a cost-of-living increase tied to the consumer price index (CPI), what will your salary be, assuming the CPI has risen from 110 to 114
African Americans
In 2012, the group with the highest unemployment rate in the United States was:
market
In a _________ economy, individuals and firms own most resources
planned
In a __________ economy, the government controls most of the resources
frictionally unemployed
Jennifer did not work during college. She just obtained a bachelor's degree in marketing, and she is now looking for a marketing job in the retail industry. Jennifer is considered:
Frictionally unemployed
Jennifer did not work during college. She just obtained a bachelors degree in marketing and she is now looking for a marketing job in the retail industry. Jennifer is considered:
Jennifer is losing purchasing power by 2%
Jennifer just got news that she is getting a 5% raise. However, the Bureau of Labor Statistics just reported that prices are rising by 7%.
$23.10 an hour
Suppose Robert has a wage contract subject to an escalator clause. He earned $22 an hour last year; in that same year, the consumer price index rose from 120.0 to 126.0. What should his new wage be?
absolute advantage
Suppose the country of Alphaland can produce more cars than Omegaland can produce. An economist would conclude that Alphaland has a(n) ____________ in producing cars.
Final good and services produced by RESOURCES in the United States
The US gross domestic product is equal to the total market value of all:
cost of goods index
The current consumer price index is:
there is a fixed quantity of resources and technology available
The derivation of a production possibilities frontier assumes:
firms start to lay off workers to reduce costs
When a recession gets under way:
entails merely talking to friends about jobs
A passive job search:
Constant opportunity costs
A production possibilities frontier that is a straight line is the result of:
$180
A sheep ranch produces $30 worth of wool. A suit manufacturer produces $60 worth of suits. A retail outlet sells a suit to a customer for $180. The change in GDP would be:
frictional unemployment
A type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs.
deflation
From 1999 to 2002, the Japanese inflation rates were, respectively 0.3 % , 0.6 % , -0.7 % , and - 07 % . During this time , the Japanese economy underwent
Spending; income
GDP can be found either by adding up all of the __________ or all of the ___________ in the economy.
9.09 trillion
GDP is 10 trillion in 2001. The GDP deflator is 100 in 2000 and is 110 in 2001. What is real GDP?
capital; consumption
If a nation selects a product mix focused on ________ goods, the production possibilities frontier will expand at a great rate than if the nation produced mostly _________ goods:
Underutilized
If an economy is operating at a point that is inside of its production possibilities frontier, then it can be assumed that its resources are:
it is possible to produce more of one good without sacrificing some of the other
If an economy is producing at a point inside its ppf
opportunity cost
If you accept a job in Seattle as a financial analyst, you must give up the chance to accept a similar job in Australia. Giving up the job in Australia is your:
.Consumers demands for specific goods and services
In a capitalist economy, the answer to the question "What should be produced?" is determined by:
manufactured products used to produce other goods and services
In economics, the term capital refers to:
Education, on the job training, and professional training activities
Investment in human capital refers to:
Natural rate of employment
Is the rate at which the actual inflation rate is equal to people's inflationary expectations:
$44000
Jill has an escalator clause in her labor contract that gives her a raise commensurate with the consumer price index (CPI). Last year she earned $40,000 and the CPI was 100. If the CPI this year is 110, her new salary is:
$250
John earns $2000. His taxes are $250 and he spends $1500. Therefore, his savings must be:
8.7%
Last year the consumer price index (CPI) was 115 and this year's CPI is 125. The rate of inflation is:
Employed
Lexie works Monday to Friday from 4 pm to 6 pm in the after school program at a local elementary school. She began looking for a full-time job last week and has already scheduled three job interviews. According to the Bureau of Labor Statistics, Lexie is:
A lack of reliable economic data
National income and product accounts came about in the United States during the 1930s as a result of:
Land
Natural resources such as copper deposits are:
Is a part of U.S. GNP
The value of cars that the Ford Motor company produces in a German plant:
Imports
The GDP deflator is an index that includes the prices of all of the following except:
personal consumption expenditures
The expenditure category that accounts for the largest share of GDP is:
Reducing regulations, offering low=interest loans, and offering favorable tax treatment
The government can make owning a business easier or more profitable by doing what?
entrepreneurial activity
The household survey is a great source of discovering:
the labor market
The household survey provides a detailed demographic picture of:
Circular flow diagram
The idea that all income ultimately goes to households, which then use it to buy good and services from firms, is a central idea of the:
Consumption expenditure
The largest component on GDP is:
low; low
The nonaccelerating inflation rate of unemployment is the unemployment rate associated with ________ inflation and __________ unemployment:
industry and region
The payroll survey provides detailed information about:
Business cycle
The periodic fluctuation of economic activity
the number of unemployed divided by the labor force
The unemployment rate is:
For more efficient use of resources, for goods to be obtained at a lower opportunity cost, and for people to specialize in activities in which they have a comparative advantage.
Trade can benefit society as a whole because it allows:
expansions to be longer than recessions
U.S. business cycles since 1950 have shown:
structural
U.S. steelworkers who have lost their job to workers receiving lower wages overseas are part of ___________ unemployment:
structural
Unemployment caused by changes in consumer demographics and automation technology is known as ______________ unemployment.
structural unemployment
Unemployment caused by changes in the structure of demand for goods and in technology; workers who are unemployed because they do not match what is in demand by producers in the economy or whose skills have been left behind by economic advancement
Natural rate of unemployment
Unemployment level at which unemployment is only frictional and structural; cyclical unemployment is zero:
Lower than interest rates on short term bonds
We are most likely to see a recession if interest rates on long term bonds are:
what to produce, how to produce, and for whom to produce
What are the three basic economic questions each society must answer?
net exports
What component of U.S. GDP is usually negative in boom years?
exports
What does X represent in the following formula, used to calculate GDP? GDP= C+I+G+(X-M)
