Macro Exam 2 Questions (ch.4-7)

we are most likely to see a recession if interest rates on long-term bonds are ______ and interest on short-term bonds are __________ .

2% ; 4%

given the following data, the unemployment rate % for this economy is approximately ___________ . employed full time - 65 employed part time - 15 actively seeking work - 20 retired - 30 discouraged workers - 10 unpaid family members working 10 hours per week - 100

20

if the growth rate in an economy is 3.5%, then its GDP will double in about:

20 years

in order to be actively seeking work, the Department of Labor indicates that a person needs to be looking for work in the past ______ weeks

4

implementing a price floor can cause:

a surplus

which of the following refers to "human capital"?

academic training and on-the-job training

according to the textbook, which group of workers have experienced the highest amount of unemployment over the past two decades?

african-americans

before a house is sold, the buyer usually inspects the property for problems. this reduces which cause of market failure?

asymmetric information

who are the two decision makers on the circular flow diagram?

businesses and households

the ___________ refers to the notion that developing countries are able to achieve greater productivity for each unit of capital invested because they are using existing technologies.

catch-up effect

the direction of flow of goods and services on the circular flow diagram:

clockwise

the largest category for the income approach to GDP in the US is:

compensation of employees

the ability of growth to build on previous growth over time is specifically called:

compounding

which group is helped by inflation?

debtors

the Bureau of Labor Statistics (BLS) counts the following workers in the total labor force.

employed full-time and part-time workers, those actively seeking work

what can the government do to facilitate or promote economic growth?

enforce contracts, protect property rights, provide stable financial system

the index in the base year will be:

equal to 100%

when demand for a product falls, ceteris paribus, what happens to the equilibrium price and consumer surplus at that price?

equilibrium price falls and consumer surplus falls

what is the correct sequence of stages in the business cycle?

expansion, peak, recession, trough

"Short-run" growth involves _________ capacity, while "long-run" growth involves _________ capacity.

fixed; expanding

over the past 150 years, the U.S> economy has endured a recession on average about every:

four to five years

according to Professor Rourke, the National Rate of Unemployment is the same of _______ and it ranges from ______

frictional & structural; 4 to 6 percent

graph

graph

a higher capital-to-labor ratio results in ___________ labor productivity, and ___________ wages.

higher; higher

a change in the Leading Economic Index is supposed to reflect:

how the economy will behave in the near future

this term best describes when prices are rising greater than 100% per year.

hyperinflation

consumer surplus is the difference between the:

max price the buyer is willing to pay and the market price

the frictional unemployment rate will be highest during a:

peak

the high point of a business cycle is called the:

peak

total surplus is calculated as:

producer surplus + consumer surplus

economic growth is most commonly measured by:

real GDP per capita

which is the worst type of unemployment?

structural

which is the largest contributor to economic growth?

technology improvements

the broadest measure of inflation is

the GDP deflator

what event was a major influence on the development of macroeconomics?

the Great Depression

___________ is a measure of the change in average prices paid by urban consumers for a typical market basket of 300 goods and services

the consumer price index

during a typical economic recovery:

unemployment decreases

when would "net exports" be negative?

when imports are greater than exports

assuming the Nominal GDP is $5 billion and the Price Index in the current year is 125%. The real GDP will equal ___________.

$4 billon

Susan purchased a new printer for $150 although she was willing to pay $175. The minimum price acceptable to the seller, Jasmine, was $145. The results of this transaction are a consumer surplus of:

$25 and a producer surplus of $5

laissez-faire is a _______ term that means _______

French; "let it be"

what represents the expenditure approach to GDP?

GDP = C = Ig+ G + Xn

in a simple circular flow model:

income is equal to spending

the ___________ refers to the public capital of a nation, including transportation networks, power-generating plants and transmission facilities, public education institutions, and other intangible resources.

infrastructure

public goods are difficult to provide in the private market because they have the characteristics of:

non-rivalry and non-exclusivity

these products have an average useful life of less than three years.

nondurable goods

which term best reflects the "underground economy"?

the informal economy

the total of consumer surplus plus producer surplus is maximized at:

the market equilibrium price

which best represents an accurate description of GDP?

the market value of all final goods and services produced by resources in a given year.

if a country's population increases at a higher rate than the growth in its real GDP:

the standard of living in the country has declined