Chapter 6, 8, 9, & 10 Macro Review
A ski lift operator who loses his job when the snow melts in the spring
An example of a seasonally unemployed worker would be
$11,071.4 billion
Assume that the nominal GDP for a given year is equal to $12,400 billion and the GDP deflator equals 112. Real GDP for that year is approximately
Increase; frictional
An increase in unemployment insurance payments would, in effect, ___________ The amount of time spent searching for a job, which would increase ___________ unemployment
A liability
Anything owed by a person or a firm is
Corporation
Arturo wants to start a business where he is the chief executive officer and the company does issue stock. The type of business Arturo wants to start is a...
2.5%
If a corporate bond with a face value of $20,000 pays yearly coupon payments of $500, what is the coupon rate?
Motivate workers to increase their productivity
If firms pay what are called efficiency wages, they pay wages that
The GDP would be overtstated
If intermediate goods and services were included in GDP
An additional 8 million people would have been working in 2017 than actually were
If the employment population ratio in 2017 was at the same level as it was in 2006,
Unemployment will rise
If the minimum wage is set above the market wage
5%
If the number employed as a 190 million, The working age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is
80%
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
Real Gross Domestic Product
Measuring total aggregate production in constant dollars uses which of the following measures?
Corporation
Of the different types of businesses, a _________ has the most government rules and the most government regulations affecting it
United States
Of the following which country has the highest annual real GDP per capital according to the International Monetary Fund and World Bank?
The stock prices of 500 large US firms
One of the most widely followed stock indexes in the United States is the S&P 500. This index represents
Share in the profits of the firm
Owners of a corporation ______________ through dividend payments on shares of that firms stock
Monetary value of all final goods and services produced within a nation in a particular year
The GDP is the:
Accomplish all of the above
The National Income and GDP Accounts help economists and policy makers to
Requires that CEOs personally certify the accuracy of financial statements
The Sarbanes-Oxley Act of 2002
Profits
The _________ a corporation keeps to finance future expansion are known as retained earnings
Employed plus unemployed
The labor force equals the number of people
Employed workers and unemployed workers
The labor force is the sum of
The percentage of the working age population in the labor force
The labor force participation rate is defined as
Wall Street Reform and Consumer Protection Act
The legislation passed in 2010 that was intended to reform regulation of the financial system was the
Frictional and structural unemployment
The natural rate of unemployment is made up of
partnerships and sole proprietorships
The owners control the day to day activities of which of the following types of business?
Only represents the transfer of ownership rights
The purchase of a a share of stock is excluded in the calculation of GDP because it
Expenditures approach and the income approach
The two principle methods of measuring GDP are the
Larger; more difficult
The typical firm in many industries has become _______________ over the past 100 years, and efficiently organizing production has become ________________.
Subtracted from exports when calculating GDP because imports do not constitute production in the United States
The value of US imports is
A yearly interest payment and a principal payment
A bond is a financial security that represents a promise to repay
35 cents
A farmer buys seeds for 15 cents that is used to grow wheat. The farmer sells the wheat to the miller for 30 cents, who makes flour. The flour is sold to the baker for 60 cents and the baker makes bread, which is sold to the grocer for 90 cents. The grocer sells the bread for $1.25. What is the value added for the grocer?
can be found by summing C + Ig + G + Xn.
A nations gross domestic product (GDP):
$2,465
According to the table above, GDP is
Have a fixed number of interest payments; may be dividends forever
Bonds ________ and stocks ___________.
Structural unemployment
By offering training to workers whose firms laid them off because of competition from foreign firms, the federal government is attempting to reduce
The agent; the principals
CEO of Dynadyne corporation has been more concerned with enhancing his lifestyle by having the company pay for expensive corporate retreats than he has been with increasing the value of the company's stock. In this situation, the CEO is ________ and the stockholders are ___________.
Sole Proprietorship
Damian wants to start a business where he is the only owner and the company does not issue stock. The type of business Damian wants to start is...
Payment by a corporation to its shareholders
Dividends are
Closing market price
Dividing the dividend payment by the stock's ________________ determines the dividend yield
Decrease; increase
Due to lowering its prices to compete with its rivals, increased competition from Airbus, and cuts to military spending, Boeing announced it would _______________ the number of persons it employed in 2017 and this would __________ the total number of persons unemployed in the economy.
All of these are differences between the two types of businesses
How do a partnership and a corporation differ?
A stereo system
Examples of nondurable consumer goods include all of the following EXCEPT
That would count the value of intermediate goods twice
GDP does NOT include intermediate goods because
an inside director
Garrison is the chief financial officer (CFO) of the Colorado drone manufacturing company and is also on the company's Board of Directors. Garrison is considered ___________ of the company.
$180 per year for 30 years plus $3,000 at the end of the 30th year
If you purchased a newly issued 30 year bond from Google with a face value of $3,000 and a coupon payment of 6 percent, Google would pay you
Was still only 60.2%
In 2006, before the start of the recession, the employment population ratio was 63.4%. In April 2017, more than six years after the end of the recession, the ratio
Fifth time in history
In August 2011, Standard & Poor's (S&P) changed its rating on US Treasury bonds from "AAA" to "AA+" based on the state of the federal governments budget deficit. This was the ____________ a rating agency had given Treasury bonds less than a rating of "AAA."
3.3 million
In a typical year, new small firms create __________________ jobs.
Add increases in inventories or subtract decreases in inventories
In calculating the GDP national income accountants:
The Sarbanes-Oxley Act
In response to accounting scandals in 2002, the federal government passed legislation requiring, among other things, that auditors disclose any potential conflicts of interest. What is the name of this legislation?
Corporate
In the United States, ________ profits are taxed at both the corporate level and when investors receive dividends
18
In the United States, ___________ percent of all firms are corporations
72
In the United States, ___________ percent of all firms are sole proprietorships
10
In the United States, _________________ percent of all firms are partnerships
A relatively short time, less than six months
In the modern US economy, the typical unemployed person stays unemployed for
Corporations
Limited personal liability is an advantage for
Partnership
Julianna, Gabrielle, and Marcela want to start a business they are the only owners and the company does not issue stock. The type of business they want to start is a...
Invest in a portfolio of financial assets
Mutual funds sell shares to investors and use the funds to
only counting final goods
National income accountants can avoid multiple counting by
An approach to measuring an economy's aggregate performance
National income accounting is
Retained earnings
Profits that are reinvested in a firm rather than paid to the firms owners are called
Nominal GDP adjusted for price changes
Real GDP is
(1,100÷15,000) x 100
Refer to table 20-1. The labor force participation rate for the simple economy equals
Increased by $87.6 billion
Refer to the above table. Between 2009 and 2010 real GDP
$4617.3 billion
Refer to the above table. Real GDP for year 2007 was
121.2
Refer to the above table. The value of the GDP deflator in 2009 is
Decreased; increased
Since 1948, the labor force participation rate for adult men has _____________ and for adult women has __________
Mutual funds
Small savers who only have enough money to buy a few individual financial assets can use ____________ to diversify
Diminishes; increase
Some corporate governance experts believe that serving on a company's board of directors for an extended length of time __________ that member's Independence from the company's CEO. If this is true, it would tend to ________ the principal agent problem.
Not in the labor force
Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as
Mortgages issued to borrowers with flawed credit histories
Subprime mortgages are
$7,100
Suppose that for the economy of Springfield, we have the following information for 2013: consumption expenditures = $4,000; wages = $3,500; gross private domestic investment = $1,300; government expenditures = $2,000; exports = $900; imports = $1,100. Using the expenditure approach what would the GDP be fore Springfield in 2013?
$700 billion
Suppose that in 2013, the total value of all final services produced in a nation was $300 billion; the total value of all final goods produced in that nation was $400 billion; and the total value of all final goods and services produced by that nation's firms in other countries was $200 billion. Gross domestic product was
Employed
The Bureau of Labor Statistics would categorize a person as if they were temporarily away from their job because they were ill
Partnerships; publicly traded companies
Traditionally, Wall Street investment banks had been organized as _____________, but by 2000 they had converted to being _____________.
Almost doubled
Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wish to work full-time were counted as unemployed, the BLS estimates the unemployment rate in April 2017 would have _________ compared to the Measure unemployment rate
The amount of dollar value contributed to a product at each stage of its production
Value added is
Structural, frictional, and cyclical
What are three main types of unemployment?
The owners of the business are personally responsible for paying expenses incurred by the business
What does unlimited liability mean?
A member of the board of directors who does not have a direct management role in the firm
What is an outside director?
Domestic investment exceeds depreciation
When an economy's production capacity is expanding:
Principal of the bond
When an investor buys a corporate bond, the _________ is a loan to the corporation
Bundled together by financial institutions and sold to investors
When mortgage loans are scrutinized, they are
Bundled together by financial institutions and sold to investors
When mortgage loans are securitized, they are
Decreases; falls in the secondary market
When the coupon rate on newly issued bonds _________ relative to older, outstanding bonds, the market price of the older bond __________.
Discouraged workers
Which of the following cause the unemployment rate as measured by the borough of labor statistics to understate the true extent of joblessness?
European countries offer higher unemployment benefits than the United States
Which of the following explains why many European countries have unemployment rates that are higher than in the United States
GDP is not a good measure of a nations overall welfare
Which of the following is a main limitation of GDP
A worker quit his job at the US post office to find more interesting work
Which of the following is an example of a worker experiencing frictional unemployment?
The NASDAQ Composite Index
Which of the following is the most important of the over the counter markets?
A job re-training program
Which of the following policies would reduce structural unemployment
Both I and II ; the purchase of production machinery & an increase in finished goods inventory
Which of the following spending components makes up the largest of Gross Domestic Product (GDP)?
Each year, many new jobs are created and many existing jobs are destroyed
Which of the following statements is true about the US economy
Loans to corporations are made from the sale of corporate bonds
Which of the following takes place in the direct finance market?
The stockholders
Who selects the board of directors of a corporation?
More than 70%
________ of people work at firms that have 50 or more employees.
