Macro Final
suppose working age pop...
(20/100)x100
what is the real gdp in 2018 using 2013 as the base year
10275
which of the following goods is directly counted in gdp
12-inch subway sandwich purchased by a student
Assume the market basket for the consumer price index has two products-meat and potatoes
129
if nominal rate of interest is 6.5 and the inflation rate is 3% what is teh real rate of interes?
3.5%
you lend 5000 to a friend for one year...
4.4%
If real GDP per capita doubles between 2005 and 2020, what is the average annual growth rate of real GDP per capita?
4.7%
gdp deflator in year 2 is 105, using year 1 as the base year. this means tha on average, the cost of goods and services is
5% higher in year 2 than in year 1
if cpi in 1990 was 131 and cpi in 2010 was 218...
66525
imagine that you borrow 5000 for one year and at the end of the year you repay the 5000 the interest...
8%
If the number employed is 190 million, the number unemployed is 10 million, and the working-age population is 250 million, then the labor force participation rate is
80%
suppose that a simple economy produces only 4 goods and services: sweatshirts, dental examinations, coffee, drinks, and coffee beans. assume coffee beans are used in the production of the coffee drinks. use information in the above table, nominal gdp for this simple economy equals
8750
if # of unemployed workers is 19 million, # of working age pop is 500 million and unemployment rate is 4%, what is the labor force participation rate?
95%
Hurricane Katrina...
shortage of gasoline
If labor productivity growth slows down in a country, this will
slow down the increase in real gdp per capita
cyclical unemployment is the result of
slowdown in the economy
which of the following is a consequence of min wage laws
some employers will be reluctant to hire as many workers as they would without min wage
A farm worker gets paid today in money, but plans to spend the money next week. This illustrates which function of money?
store of value
If whole tomatoes were money, which of the following functions of money would be the hardest for tomatoes to satisfy?
store of value
2017 Boeing...
structurally unemployed
A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat. This lumberjack would be
structurally unemployed
if demand for letters...
supply of booth letters would have to be less than the supply of lincoln letters
stagflation usually results from
supply shock
which of the following is consistent with the graph depicted above
tech change increases the profitability of new investment
frictional unemployment is the result of
the process of matching workers with jobs
gdp is calculated by summing up
the total market value of final goods and services produced in the economy during a period of time
if prices in the economy rise,
then purchasing power of a dollar declines
which of the following best describes the wealth effect?
when price level falls, real value of household wealth rises
transfer payment is a payment by the gov to an individual for
which gov doesn't receive a good or service in return
Why does the short-run aggregate supply curve shift to the right in the long run, following a decrease in aggregate demand?
workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices
Why does the short-run aggregate supply curve shift to the left in the long run, following a increase in aggregate demand?
workers and firms and adjust their expectations of wages and prices upward and they push for higher wages and prices
if net taxes fall by 80 billion we would expect household saving to rise by less than 80 billion
household saving to rise by less than 80 billion
In market economy, ___ interact in markets to decide the answers to the fundamental economic questions
households and firms
Who receives the goods and services produced in the United States depends largely on
how income is distributed
when price level in US falls relative to price level of other countries, ____ will fall, ____ will rise, and ___ will rise
imports, exports, net exports
which of the following describes the difference btw scarcity and shortage
in economic sense, almost everything is scarce. a shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price
which of the following would cause both the equilibrium price and equilibrium quantity of barley (assume that barley is an inferior good) to increase
increase in consumer income
which of the following is consistent with the graph depicted?
increase in proportion of income after next taxes used for consumption
during a bus cycle expansion, total production ___ and total employment ___
increase, increase
As the economy nears the end of a recession, which of the following do we typically see?
increased spending on capital goods by firms
as job opportunities for women and the wages those jobs pay have increased, opportunity cost of doing housework has ___, so many families have chosen to hire specialists in household chores, such as cleaning services and lawn care services, bc cost of these specialists is ___ than cost of wife (or husband) performing those chores
increased, lower
in dynamic AD and AS model, if AD shifts further than AS
inflation occurs
which of the following is not directly counted in gdp
intermediate goods
which of the following would shift a nation's production possibilities frontier inward?
a law requiring workers to retire at age 50
which of the following is true about the consumer price index?
it assumes that consumers purchase the same amount of each product in the market basket each month
which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply
aggregate demand and potential real GDP decrease continously
nominal gdp of the US in 2016 was approx 18.6 million this means
all of the above are true
if you can produce more of something than others with the same resources, you have
an absolute advantage
an outward shift of a nation's production possibilities frontier can occur due to
an increase in the labor force
which one of these statements is not one of the 3 key economic ideas/assumptions?
markets are the most efficient organizations structure
a successful market economy requires defined property rights and
an independent court system to adjudicate disputes based on the law
The process of an economy adjusting from a recession back to potential GDP in the long run without any government intervention is known as
automatic mechanism
which of the following contributes to the efficiency of markets?
markets promote competition and voluntary exchange
which of the following policies would reduce frictional unemployment
building an online job database that helps workers find jobs
the production possibilities frontier shows
max attainable combinations of 2 products that may be produced in a particular
When a grocery store accepts your $5 bill in exchange for bread and milk, the $5 bill serves as a
medium of exchange
Rising prices erode the value of money as a ________ and as a ________.
medium of exchange; store of value
which of the following would cause equilibrium price of apple juice to decrease and the equilibrium quantity of apple juice to increase
decrease in price of apples
which of the following statements is true?
decrease in supply causes the equilibrium price to rise; the increase in price then results in a decrease in quantity demanded
monetary poly refers to actions fed reserve takes to manage
money supply and interest rates to pursue its economic objectives
If firms pay what are called "efficiency wages," they pay wages that
motivate workers to increase their productivity
to affect the market outcome, a price floor
must be set above the equilibrium price
in order to be binding, a price floor
must lie above the free market equilibrium price
Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as
not in labor force
last week, 6 kronor could purchase one US dollar
decrease, decrease
government proposes a tax on halogen light bulbs. sellers will bear the entire burden of the tax if the
demand curve is horizontal
which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true extent of joblessness?
discouraged workers
By making exchange ________, money allows for ________ and higher ________.
easier, specialization, productivity
primary purpose of patents and copyrights is to
encourage the expenditure of funds on research and development to create new products
suppose you lend 1000 at an interest rate of 10%...
equal to 0%
one of the 3 primary tools the Fed reserve uses to conduct monetary policy, tool used most often is
open market operations
the concept of ____ is that the economic cost of using a factor of production is the alternative use of that factor that is given up
opportunity cost
Jack just told his boss that he thinks his boss is an idiot. It is likely that Jack will be experiencing ________ unemployment in the near future.
frictional
structural unemployment is the result of
persistent mismatch btw skills and characteristics of worker sand requirements of jobs
the recession of 2007-2009 would most likely be represented in a production possibilities frontier graph by
point inside the frontier
fed reserve system's 4 monetary policy goals are
price stability, high employment, economic growth, and stability of financial markets and institutions
if real gdp in 2018 (2009 prices) is greater than real gdp in 2017 and nominal gdp in 2018 is lower than nominal gdp of 2017 then
prices in 2018 are lower than prices in 2017
Specializing in the production of a good or service in which one has a comparative advantage enables to do which of the following
produce a combination of goods that lies outside of its own production possibilities frontier
which of the following would not be included in the expenditure category called investment expenditures
purchase of shares of preferred stock
at market equilibrium
quantity demanded equals quantity supplied
a good measure of the standard of living
real gdp per capita
If your nominal wage rises faster than the price level, we can say your real wage has ________ and the purchasing power of your income has ________.
risen, risen
When the price of oil rises unexpectedly, the equilibrium price level ________ and the unemployment rate ________ in the short run.
rises, rises
which of the following are not considered part of gov purchases?
welfare benefits
to increase money supply fed reserve could
conduct an open market purchase of treasury securities
which of the following statements demonstrates that economic agents respond to incentives?
consumers rent more kayaks from a vendor that rents kayaks at a lower price than other rival kayak vendors along Waikiki beach. Department stores take steps to increase security since they believe it is more costly to allow shoplifting than to install expensive security monitoring equipment.
if the price level rose in 3 consecutive years from 100 to 120 to 140, then the annual inflation rate over those years would
decrease
which of the following would cause both the equilibrium price and equilibrium quantity of oysters (assume that oysters are a normal good) to decrease?
decrease in consumer income
a decrease in demand for eggs due to changes iin consumer tastes, accompanied by a decrease in the supply of eggs as a result of an outbreak of avian flu, will result in
decrease in equilibrium quantity of eggs; equilibrium price may increase or decrease
which of the following indicates that the US economy has become more stable since 1950?
less sever fluctuations in real gdp
your grandfather tells you that he earned 7000/year
less than 5 times as much as your grandfather in terms of real income
key idea of aggregate expenditure model is that in any particular year, the level of gdp is determined mainly by
level of aggregate expenditure
___ of unemployment during ___ make it easier for workers to ___ wages
low levels; expansion; negotiate higher
which of the following best describes an assumption that economists make about human behavior?
they assume that rational behavior is useful in explaining choices people make even people may not behave rationally all the time
which of the following statements is false
trade-offs don't apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale
according to the text, economists consider full employment to occur when the
unemployment rate consists of only frictional and structural unemployjment
Mike has been unemployed for over a year. He hasn't looked for a job in the last three months, but he's just started looking for work again. Because Mike started looking for a new job,
unemployment rate has increased
statement "dell laptop costs 1200 illustrates which function of money
unit of account
scaracity refers to the situation in which
unlimited wants exceed limited resources
Suppose in 2018, you purchase a house built in 2003. Which of the following would be included in the GDP for 2018?
value of services of real estate agent