Macroeconomics Ch 5,6,7

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An example of a transfer payment is

a Social Security retirement benefit.

Estimates for the natural rate of unemployment in the United States range from

​4% to​ 6%.

If nominal GDP is​ $8 trillion and real GDP is​ $6 trillion, the GDP deflator is

133.33.

The value for net exports in billions of dollars is ​$Billions Durable goods 800 Nonresidential investment 400 Federal purchases of goods 300 Exports 400 State and local purchases of goods 200 Residential investment 50 Services 500 Imports 250 Change in business inventories minus−25 Nondurable goods 700

150.

The value for gross private domestic investment in billions of dollars is ​$Billions Durable goods 800 Nonresidential investment 400 Federal purchases of goods 300 Exports 400 State and local purchases of goods 200 Residential investment 50 Services 500 Imports 250 Change in business inventories minus−25 Nondurable goods 700

425.

The value of government spending in billions of dollars is ​$Billions Durable goods 800 Nonresidential investment 400 Federal purchases of goods 300 Exports 400 State and local purchases of goods 200 Residential investment 50 Services 500 Imports 250 Change in business inventories minus−25 Nondurable goods 700

500.

According to​ ________ economists, the economy is self-correcting

Classical

The​ ________ can change the quantity of money in the economy.

Federal Reserve

The equation for GDP using the expenditure approach is

GDP​ = C​ + I​ + G​ + EX-IM

Which of the following is not counted in the GNP of the United​ States?

The profit earned by a restaurant located in the United States but owned by a Mexican company.

A transfer payment is

a cash payment made by the government to people who do not supply​ goods, services or labor in exchange for the payment.

Which of the following is an example of a final good or​ service?

a computer purchased by Federal Express to track shipments

A prolonged and deep recession is called

a depression.

The government wants to encourage consumer spending through cutting income taxes. This is an example of

a fiscal policy.

For Joanna to be considered out of the labor​ force, she can be

a full- time student.

A price index is

a measurement showing how the average price of a bundle of goods changes over time.

Which of the following is a good or service counted in​ GDP?

a new tire you buy for your personal car

Gross national product is the total market value of

all final goods and services produced by resources owned by a​ country, regardless of where production takes place.

GDP is not a perfect measure of social welfare and the​ society's economic​ well-being because A. GDP accounting rules do not adjust for production that causes negative externalities. B. it does not say anything about the distribution of income. C. it does not include all economic activities in the economy. D. all of the above

all of the above

GDP is not a perfect measure of social welfare and the​ society's economic​ well-being because A. it does not say anything about the distribution of income. B. GDP accounting rules do not adjust for production that causes negative externalities. C. it does not include all economic activities in the economy. D. all of the above

all of the above

Gross domestic product measures A. the total income of everyone in the economy. B. the value of all output in the economy. C. the total spending of everyone in the economy. D. all of the above

all of the above

The GDP of the U.S. in 2014 was around​ $17.4 trillion. This means A. that the value of output in the U.S. in 2014 was around​ $17.4 trillion. B. that total spending on final goods and services in the U.S. in 2014 was around​ $17.4 trillion. C. that total income in the U.S. in 2014 was around​ $17.4 trillion. D. all of the above

all of the above

The GDP of the U.S. in 2014 was around​ $17.4 trillion. This means A. that total spending on final goods and services in the U.S. in 2014 was around​ $17.4 trillion. B. that total income in the U.S. in 2014 was around​ $17.4 trillion. C. that the value of output in the U.S. in 2014 was around​ $17.4 trillion. D. all of the above

all of the above

A period when the economy shrinks is known as A. a recession. B. a contraction. C. a slump. D. all of the above.

all of the above.

In a business​ cycle, a peak represents the end of​ ________ and a trough represents the end of​ ________.

an​ expansion; a recession

The short-term ups and downs in the level of economic activity is known as​ a(n)

business cycle.

The diagram that shows the income received and payments made by each sector of the economy is the

circular flow diagram.

According to the Classical​ model, unemployment

could not persist because wages would fall to eliminate the excess supply of labor.

Which prices are used to measure goods and services in calculating​ GDP?

current prices

When the Fed slows the rate of growth of the money supply to slow down the​ economy, the unemployment type that will be directly affected is the

cyclical unemployment.

The PPI is a price index that tends to be a leading indicator of

future inflation rates.

By not counting the value of intermediate goods when calculating​ GDP, you avoid

double counting.

Jake retired from the police force. He started working an hour or two a day at a paid job in​ city's courthouse. Jake is

employed

A period during which aggregate output rises is known as​ a(n)

expansion

Between a trough and a​ peak, the economy goes through​ a(n)

expansion.

Government policies regarding taxes and expenditures are called

fiscal policy.

When the government changes taxes and​ spending, it is implementing

fiscal policy.

A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as

frictionally unemployed.

When an economics professor quits​ his/her job at a university and starts looking for a better job in another​ university, he/she is

frictionally unemployed.

Which of the following is a topic studied in​ Macroeconomics? A. gross domestic product B. the wage of auto workers C. the price of Dell computers D. the amount of pizza produced

gross domestic product

The total market value of all final goods and services produced within a given period by factors of production located within a country is

gross domestic product.

The total market value of all final goods and services produced by resources owned by a​ country, regardless of where production takes place is

gross national product.

A period of very rapid increase in the overall price level is known as

hyperinflation

Cheryl graduated from college a month ago and is now without work. She accepted a job that will start next month. ​Today, Cheryl is

in the labor force.

Real GDP is gross domestic product measured

in the prices of a base year.

An increase in the overall price level is known as

inflation

According to the Classical​ economists, the economy

is​ self-correcting.

The Federal Reserve affecting the supply of money is known as

monetary policy.

The total income of the country is

national income.

Discouraged workers are

not considered as part of the labor force.

Annabel retired from the fire department. She started volunteering two hours a day at an unpaid job in the local hospital. Annabel is

not in the labor force.

Government policymakers would like to have high​ ________ and low​ ________.

output​ growth; unemployment and inflation

A price index that tends to be a leading indicator of future inflation rates is the

producer price index.

Which of the following is not a component of gross domestic​ product?

purchases by consumers of used goods

The GDP deflator is the

ratio of nominal GDP to real GDP multiplied by 100.

An auto worker in Ohio who loses her job because the company relocated the plant to another country represents an example of

structural unemployment.

An individual who cannot find a job because his or her job skills have become obsolete is an example of

structural unemployment.

Telephone operators who have lost their jobs as a result of computerized switchboards are an example of

structural unemployment.

The natural rate of unemployment is generally thought of as the

sum of frictional unemployment and structural unemployment.

The data in the national income and product accounts are compiled by

the Bureau of Economic Analysis.

Deflation occurs when

the average price level declines.

In which basic market would DVDs be​ traded?

the goods and services market

In which basic market would MP3 players be​ traded?

the goods and services market

The trend of the economy is

the long run growth path of the economy.

In which of the following markets are funds demanded and​ supplied?

the money market

Inflation is an increase in

the overall price level.

Which of the following is not a topic studied in​ Macroeconomics?

the price of Dell computers

Which of the following is not a topic studied in​ Macroeconomics? A. the inflation rate B. the unemployment rate C. gross domestic product D. the price of Dell computers

the price of Dell computers

Which of the following would not be counted in​ 2016's GDP? A. the value of a 2008 boat you purchase from a boat dealer in 2016 B. the 2016 salary of a used motorcycle salesperson C. the value of a refrigerator manufactured in 2016 but not sold in 2016 D. the commissions earned by a real estate agent in selling condominiums built prior to 2016

the value of a 2008 boat you purchase from a boat dealer in 2016

Unemployment implies that in the labor market

there is an excess supply of labor.

The major lesson of the circular flow diagram is that

total income in the economy must always equal total spending.

It has become conventional to classify an economic downturn as a recession when aggregate output declines for

two consecutive quarters.

Cyclical unemployment is the

unemployment that occurs during recessions and depressions.

In the circular flow​ diagram, the different payments made by firms to households include

wages and profits.

​If, in​ 2016, an​ economy's total production was 50 bushels of soybeans at​ $20 each and 40 gallons of honey at​ $15 per​ gallon, its gross domestic product would be

​$1,600.

If an economy produced 10 pizzas at​ $20 each and fifteen gallons of root beer at​ $5 each, the total value of these goods and services would be

​$275.

The unemployment rate is

​(labor force - ​employed)/labor force x 100.

If the CPI in 2015 was 104 and the CPI in 2016 was​ 106, then the rate of inflation between 2015 and 2016 was

​1.92%.

If the price index in period 2 is 109 and the price index in period 3 is​ 125, the rate of inflation between period 2 and period 3 is

​14.7%.

Employed ​14,000 people Unemployed 3,000 people The labor force equals

​17,000 people.

Employed ​14,000 people Unemployed ​3,000 people Not in the Labor Force ​4,000 people The unemployment rate is

​17.6%.

Refer to the information provided in the table at right to answer the question that follows. Personal consumption expenditures in billions of dollars are ​$Billions Durable goods 800 Nonresidential investment 400 Federal purchases of goods 300 Exports 400 State and local purchases of goods 200 Residential investment 50 Services 500 Imports 250 Change in business inventories minus−25 Nondurable goods 700

​2,000.

If the labor force is​ 320,000 and the total population 16 years of age or older is​ 400,000, the​ labor-force participation rate is

​80%.

Employed ​14,000 people Unemployed ​3,000 people Not in the Labor Force ​4,000 people The​ labor-force participation rate is

​80.9%.

Employed ​14,000 people Unemployed ​3,000 people Not in the Labor Force ​4,000 people The employment rate is

​82.4%.

If the​ labor-force participation rate is​ 82% and the total population 16 years of age or older is 1 million​ people, the labor force is

​820,000 people.

The value of what Burger King produces in France is included in the United States​ ________ and in the French​ ________.

​GNP; GDP

The value of what KFC produces in Japan is included in the U.S.​ ________ and in the Japanese​ ________.

​GNP; GDP

When calculating​ GDP, exports are​ ________ and imports are​ ________.

​added; subtracted

In the circular flow​ diagram, firms​ ________ labor and households​ ________ goods and services.

​demand; demand.

The demanders in the​ goods-and-services market are

​households, the​ government, business​ firms, and the rest of the world.

Inflation refers to​ a(n) ________ in the overall​ ________.

​increase; price level

Unemployment generally​ ________ during recessions and​ ________ during expansions.

​rises; falls.

The term business cycle refers to the

​short-term ups and downs in the level of economic activity.

The period in the business cycle from a​ ________ to a​ ________ is called an expansion.

​trough; peak

The unemployment rate equals

​unemployed/labor force.


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