Unit 2 Exam

indexed

A payment is said to be ________________ if it is automatically adjusted for inflation. cross referenced indexed matched maintained

frictionally unemployed

A welder who quits his job and moves from Pittsburgh to Madison to try to get a better welding job is said to be: frictionally unemployed. underemployed. cyclically unemployed. structurally unemployed.

8.3%; 60%

Craigburg has a working age population of 20 million. Of those, 11 million are employed and 1 million are unemployed. The unemployment rate is ________ and the participation rate is __________. 5%; 55%. 8.3%; 60%. 8.3%; 55%. 5%; 60%

real GDP per capita

Economists typically measure economic growth by tracking: the employment rate. the unemployment rate. averaged GDP growth real GDP per capita

Ethiopia = $145.00 Costa Rica = $2250.00

Ethiopia has a GDP of $8 billion (measured in U.S. dollars) and a population of 55 million. Costa Rica has a GDP of $9 billion (measured in U.S. dollars) and a population of 4 million. Calculate per capita GDP for each country. Ethiopia = $14.50 Costa Rica = $2250.00 Ethiopia = $14.50 Costa Rica = $225.00 Ethiopia = $145.00 Costa Rica = $2250.00 Ethiopia = $1450.00 Costa Rica = $22,500.00

goods and services purchased by the ultimate users

Final goods or services used to compute GDP refer to: the sum of all wages paid to laborers. the factors of production used to produce output. goods and services purchased by the ultimate users. the value of outstanding shares of stock of manufacturing firms

a worker decides to quit one job to seek a different job

Frictional unemployment occurs when: there is friction between an employer and employee. a worker decides to quit one job to seek a different job. a large corporation transfers a worker to another city. college students go back to school at the end of the summer

out of the labor force

George looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered: out of the labor force. unemployed. employed in the underground economy. underemployed

imports exceed exports by $50 billion

Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then: exports exceed imports by $50 billion. imports exceed exports by $50 billion. imports exceed exports by $150 billion. exports exceed imports by $150 billion

2.80%

If the price index moves from 107 to 110, the rate of inflation is: 3% 30% 28% 2.80%

2.10%

In November 2010 the labor force in Siouxtown, was 14,800. There were 14,483 persons employed. The local unemployment rate: 1.20% 2.10% 5.60% 7.10%

final goods and services

In order to avoid double counting, statisticians just count the __________________. final inventories final goods and services intermediate goods and services durable goods and nondurable goods

high rate of economic growth.

In the long run, the most important source of increase in a nation's standard of living is a: zero rate of population growth high rate of economic growth. high rate of consumption. high rate of labor force growth

This is a false statement, because economic growth hinges on the quality and type of investment as well as the human capital and improvements in technology

Increased investment alone will guarantee economic growth. This is a true statement, because growth occurs only with savings. This is a true statement, because money is the only resource needed for growth. This is a false statement, because an economy must rely on capital injections from abroad. This is a false statement, because economic growth hinges on the quality and type of investment as well as the human capital and improvements in technology

the amount spent on new factories and machinery

Investment (I) includes: the amount spent on new factories and machinery. the amount spent on stocks and bonds. the amount spent on consumer goods that last more than one year. the amount spent on purchases of art.

quality bias sometimes called new product bias

One factors that complicate the calculation of the inflation rate is: quality bias sometimes called new product bias preferential bias complimentary product bias consumer behavior bias

substitution bias

One of the reasons that a rise in the price of a fixed basket of goods over time tends to overstate the rise in a consumer�s true cost of living, is: substitution bias attribution bias complimentary bias preference bias

GDP per capita

Question 15 When discussing economic growth, it is often useful to focus on ____________, to avoid studying changes in the size of GDP that represent only having more people in the economy, and focus on those increases in GDP which represent an actual rise in the standard of living on a per person basis. economic growth GDP per capita living standards consumption and expenditures

unemployment that is due to normal turnover in the labor market

Question 26 Frictional unemployment is: unemployment that is due to the friction of competing ideological systems. unemployment caused by lack of training and education. unemployment caused by automation in the workplace. unemployment that is due to normal turnover in the labor market

8 percent of the labor force is unemployed

Question 27 If the unemployment rate is 8 percent, then this means: 8 percent of the population is unemployed. 8 percent of the population age over sixteen is unemployed. 8 percent of the labor force is unemployed. the number of unemployed persons equals 8 percent of the employed persons

inflation rate

Question 31 The percentage change in the price level from one-time period to the next, whether the price level is measured in terms of money is the _____________. inflation rate price index rate consumer price index producer price Index

Employment Cost Index

Question 32 When we want to measure wage inflation in the labor market, we use the: Consumer Price Index Product Price Index Employment Cost Index Employment Price Index

inflation; most

Question 37 __________ implies that pressure for price increases reaches across _______________markets, not just one. inflation; all deflation; most inflation; most deflation; all

deflation

Question 38 With regard to the economy, the term negative inflation is synonymous with which of the following? recession depression deflation hyperinflation

the university tuition paid to enroll in a course

Question 6 Which of the following is included in GDP calculations? sales revenue received from a yard sale cash income received by a self-employed landscaper that is not reported to the IRS a crisp $50 bill received on your birthday the university tuition paid to enroll in a course

real GDP adjusts for inflation

The difference between nominal GDP and real GDP is: nominal GDP measures actual productivity nominal GDP adjusts for inflation real GDP adjusts for inflation real GDP excludes imports and exports

overstate

The effect of substitution bias is that the rise in the price of a fixed basket of goods over time tends to ___________________ the rise in a consumer�s true cost of living, because it doesn�t take into account that the person can substitute between goods according to changes in their relative prices. stabilize understate overstate reduce

cyclical unemployment.

The type of unemployment that occurs because of a recession is called: cyclical unemployment. the natural rate of unemployment. seasonal unemployment. frictional unemployment

unemployed workers as a percentage of the labor force

The unemployment rate measures: the number of people unemployed divided by the number of people employed. unemployed workers as a percentage of the labor force. unemployed workers as a percentage of the population age over-sixteen. unemployed workers as a percentage of the population

productivity

The value of what is produced per worker, or per hour worked, is called ____________. economic growth human capital productivity GDP per capita

promote economic growth

To achieve a high standard of living, a nation should: increase the tax deduction for child dependents. promote economic growth. use less capital and more labor in the production process. increase welfare payments to the poor

automobiles, furniture

Which of the following are most likely classified by economists as consumer durable goods? food, clothing drugs, toys, magazines, books automobiles, furniture stocks, bonds

Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education.

Which of the following best describes the relationship between economic growth and literacy? As the economy grows, literacy declines because it becomes less and less useful in a developed economy. Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows and the opportunity cost of education rises, literacy declines. Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education. There is no correlation between economic growth and literacy

an increase in the proportion of the population that is college educated

Which of the following factors contribute to economic growth? an increase in the average wage rate paid to workers an increase in the standard of living a decrease in the productivity of labor an increase in the proportion of the population that is college educated

A local ice cream store sells $17,000 worth of cones and sundaes on July 1.

Which of the following is included in the calculated Gross Domestic Product? Farmer Freddie sells his second tractor to his son. Suzanne buys a love seat and chair for $85 at the yard sale on the corner. A local ice cream store sells $17,000 worth of cones and sundaes on July 1. Mr. Farkle buys a used lawn mower from his neighbor, Mr. Sparkle

cash income paid to a day laborer that is not reported to the tax authorities

Which of the following is not included in GDP? the payments for a chiropractor's services cash income paid to a day laborer that is not reported to the tax authorities the replacement of brake pads on your six-year-old vehicle the fees for legal services rendered by your lawyer

ongoing rise

While one occasionally sees references to inflation over short time periods, the term typically implies a(n)_____________ in prices. ongoing decrease ongoing rise short term rise short term decrease

Productivity

_________ is output per hour in the business sector. Net exports Productivity Investment GDP per capita

The Industrial Revolution

_____________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s. GDP per capita The Industrial Revolution The living standard Investment and inventions

Efficiency wage theory

______________________ argues that the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate. Efficiency wage theory Equilibrium wage theory Employee wage theory Employer wage theory