Macro Midterm

The figure shows three different production functions. The law of diminishing returns can be seen in which of the following movements in the figure?

point c to d

Refer to the diagram of the circular flow of income. Based on the diagram, the arrow going FROM box 2 to box 1 must be:

output bought by households.

There are three firms ( Firm 1, Firm 2, & Firm 3) in an economy engaged in the production of Nutmeg Bread. Using the information given below calculate Firm 1's inventory investment using the Total Spending (Expenditure) approach. (Hint: find Firm 1's unsold output & unused input.) Firm 1 produces wheat and nutmeg. Wheat is valued at $500 and nutmeg is valued at $200 Firm 1 sells $350 worth of wheat to Firm 2. Firm 1 also sells $200 worth of nutmeg to Firm 3. Firm 1 paid $200, $50, and $20 as wages, salary, and rent respectively. Firm 1 made a profit of $430 Firm 2 uses ¾ th of the wheat to make flour. Flour is valued at $1000. Firm 2 sells $750 worth of flour to Firm 3. Firm 2 paid $300, $40, and $30 as wages, salary, and rent respectively. Firm 2 made a profit of $367.5 Firm 3 uses ¾ th of the flour and uses ½ of the nutmeg to make nutmeg bread. Nutmeg bread is valued by Firm 3 at $2000. Firm 3 sold $1700 worth of nutmeg bread to households (or consumers). Firm 3 paid $250, $40, and $15 as wages, salary, and rent respectively. Firm 3 made a profit of $1032.5

$150

What is Uganda's real GDP if its nominal GDP is $27.5 billion (in current US$), and the GDP deflator is 163.4?

$16.8 Billion

Consider the data shown in the table. Assume that the economy produces only frozen fish. What is the nominal GDP for last year?

$180,000

There are three firms ( Firm 1, Firm 2, & Firm 3) in an economy engaged in the production of Nutmeg Bread. Using the information given below calculate Total GDP using the Total Income approach. Firm 1 produces wheat and nutmeg. Wheat is valued at $500 and nutmeg is valued at $200 Firm 1 sells $350 worth of wheat to Firm 2. Firm 1 also sells $200 worth of nutmeg to Firm 3. Firm 1 paid $200, $50, and $20 as wages, salary, and rent respectively. Firm 1 made a profit of $430 Firm 2 uses ¾ th of the wheat to make flour. Flour is valued at $1000. Firm 2 sells $750 worth of flour to Firm 3. Firm 2 paid $300, $40, and $30 as wages, salary, and rent respectively. Firm 2 made a profit of $367.5 Firm 3 uses ¾ th of the flour and uses ½ of the nutmeg to make nutmeg bread. Nutmeg bread is valued by Firm 3 at $2000. Firm 3 sold $1700 worth of nutmeg bread to households (or consumers). Firm 3 paid $250, $40, and $15 as wages, salary, and rent respectively. Firm 3 made a profit of $1032.5

$2775

There are three firms ( Firm 1, Firm 2, & Firm 3) in an economy engaged in the production of Nutmeg Bread. Using the information given below calculate Firm 3's inventory investment using the Total Spending (Expenditure) approach. (Hint: find Firm 3's unsold output & unused input ) Firm 1 produces wheat and nutmeg. Wheat is valued at $500 and nutmeg is valued at $200 Firm 1 sells $350 worth of wheat to Firm 2. Firm 1 also sells $200 worth of nutmeg to Firm 3. Firm 1 paid $200, $50, and $20 as wages, salary, and rent respectively. Firm 1 made a profit of $430 Firm 2 uses ¾ th of the wheat to make flour. Flour is valued at $1000. Firm 2 sells $750 worth of flour to Firm 3. Firm 2 paid $300, $40, and $30 as wages, salary, and rent respectively. Firm 2 made a profit of $367.5 Firm 3 uses ¾ th of the flour and uses ½ of the nutmeg to make nutmeg bread. Nutmeg bread is valued by Firm 3 at $2000. Firm 3 sold $1700 worth of nutmeg bread to households (or consumers). Firm 3 paid $250, $40, and $15 as wages, salary, and rent respectively. Firm 3 made a profit of $1032.5

$587.5

There are three firms ( Firm 1, Firm 2, & Firm 3) in an economy engaged in the production of Nutmeg Bread. Using the information given below calculate the total factor payments for Firm 1, Firm 2, and Firm 3 respectively. Firm 1 produces wheat and nutmeg. Wheat is valued at $500 and nutmeg is valued at $200 Firm 1 sells $350 worth of wheat to Firm 2. Firm 1 also sells $200 worth of nutmeg to Firm 3. Firm 1 paid $200, $50, and $20 as wages, salary, and rent respectively. Firm 1 made a profit of $430 Firm 2 uses ¾ th of the wheat to make flour. Flour is valued at $1000. Firm 2 sells $750 worth of flour to Firm 3. Firm 2 paid $300, $40, and $30 as wages, salary, and rent respectively. Firm 2 made a profit of $367.5 Firm 3 uses ¾ th of the flour and uses ½ of the nutmeg to make nutmeg bread. Nutmeg bread is valued by Firm 3 at $2000. Firm 3 sold $1700 worth of nutmeg bread to households (or consumers). Firm 3 paid $250, $40, and $15 as wages, salary, and rent respectively. Firm 3 made a profit of $1032.5

$700, $737.5, $1337.5

You open a savings account that earns a nominal interest rate of 1.3% interest a year. The current consumer price index is 117. In one year, the consumer price index is expected to go to 120. What is your expected real rate of return?

-1.26%

(Table: Unemployment and Employment Data) If marginally attached workers are included, the number of persons in the labor force in this economy is _____ million. Population: 170 Employed: 95 Unemployed and Looking for Work: 5 Discouraged Workers: 3 Retired: 30

103

In 1945, the United States recorded real GDP growth of -1% and nominal GDP growth of 1.6%. What was the inflation rate in 1945?

2.6%

Refer to the following table that shows monthly data for Japan. What was the unemployment rate in December 2017?

2.7%

If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate is:

20%

The table shows consumer price index data for the United States. Based on this information, what is the rate of inflation in 2006?

3.22%

Consider the data in the table below. For the year 2016, rank the countries' standard of living, from highest to lowest.

Denmark, United States, Canada, Iceland, and Spain

Macroeconomics studies how individual households and firms make decisions and how individual economic agents interact in the market.

False Macroeconomics is the study of the economy as a whole or the study of relations between broad economic aggregates. Microeconomics rather studies how individual households and firms make decisions and how individual economic agents interact in the market.

A recent World Bank study found that in South Africa, the top 1% of the population have about 71% of the wealth in the economy, and the lowest 60% of the population have about 7% of the wealth in the economy. What shortcoming of GDP measurement does this finding reflect?

GDP ignores income distribution.

Consider these four graphs of the labor market, showing four different minimum wage levels. Which graph(s) shows a wage level where there is no unemployment?

Graph B

Consider the decision to read your economics textbook. Which of the four core principles of economics applies to the notion that reading this textbook will help you to establish a solid foundation of understanding economics, which will be beneficial for future courses?

Interdependence principle

Consider your decision to attend class in college or skip it. Which of the four core principles of economics applies to the notion that each additional class you attend helps increase your likelihood of mastering the material?

Marginal principle

It is generally accepted that a binding minimum wage does NOT:

decrease the amount of labor supplied.

Unexpected inflation _____ lenders and _____ borrowers.

hurts; benefits

Gross Domestic Product (GDP) is defined as the:

market value of all the final goods and services currently produced within an economy or nation (country) during a year.

During periods of high inflation, stores that publish catalogs find it necessary to revise prices and publish new catalogs _____ frequently than they did before. This is an example of _____ costs.

more; menu

Consider the graph of the labor market shown here. At the wage rate of $23:

the number of unemployed people in this market is zero.