econ 111

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that a. GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government. b. GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare. c. GDP is still the best measure of society's welfare because these other values cannot actually be measured. d. GDP is not a useful measure of society's welfare.

b. GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare.

source of supply of loanable funds

saving

The labor-force participation rate is computed as

(labor force/adult population) *100

how is GDP not a perfect measure of well-being

-GDP excludes the value of volunteer work -it does not address the distribution of income -it does not address the environmental quality

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion, what was the GDP deflator?

250 nominal/real *100

In early 2010 Molly paid $200,000 for a house built in 2000. She spent $30,000 on new materials to remodel the house. Although Molly lived in the house after she remodeled it, its rental value rose. Which of the following contributed to real GDP in 2010? a. the price of the house, the cost of remodeling materials, the increase in rental value b. the price of the house and the cost of remodeling materials, but not the increase in rental value c. the costs of the remodeling materials and the increase in rent, but not the price of the house d. None of the above are correct.

C. the costs of the remodeling materials and the increase in rent, but not the price of the house

if 2010 is the base year, then the inflation rate in 2015 equals:

CPI in 2015-CPI in 2014/CPI in 2014 *100

Which of the following items is counted as part of government purchases? The federal government pays the salary of a Navy officer. b. The state of Nevada pays a private firm to repair a Nevada state highway. c. The city of Las Vegas, Nevada pays a private firm to collect garbage in that city. d. All of the above are correct.

D. all of the above

the market value of all final goods and services produced

GDP

A German citizen buys an automobile produced in the United States by a Japanese company. As a result, a. U.S. net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected. b. U.S. net exports increase, U.S. GDP is unaffected, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected. c. U.S. net exports and GDP increase, Japanese GNP increases, German net exports decrease, German GNP is unaffected, and German GDP decreases. d. U.S. net exports and GDP are unaffected, Japanese GNP increases, and German net exports, GNP, and GDP decrease.

a. U.S. net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected.

Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as "unemployed"? a. anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid off b. anyone who is not employed c. anyone who is not employed, is available for work, and has looked for work in the past four weeks d. anyone who is not employed, is available for work, has looked for work in the past four weeks, anyone who is waiting to be recalled from a job from which they have been laid off, and anyone who is employed part time and has searched for full time employment in the past 4 weeks

a. anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid of

Municipal bonds pay a relatively a. low rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax. b. low rate of interest because of their high default risk and because the interest they pay is subject to federal income tax. c. high rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax. d. high rate of interest because of their high default risk and because federal taxes must be paid on the interest they pay.

a. low rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax.

Which of the following is a source of frictional unemployment? a. changes in the composition of demand among industries or regions b. minimum wages c. labor unions d. None of the above is correct.

a. changes in the composition of demand among industries or regions

Rosa deposits $100 in a bank account that pays an annual interest rate of 20 percent. A year later, after Rosa has accumulated $20 in interest, she withdraws her $120. Rosa's purchasing power a. did not change if the inflation rate was 20 percent. b. decreased if the inflation rate was -5 percent. c. increased if the inflation rate was 22 percent. d. More than one of the above is correct.

a. did not change if the inflation rate was 20 percent.

AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP? a. $90,000 b. $100,000 c. $0 d. $10,000

a. $90,000

If the CPI was 127 in 1972 and is 324 today, then $10 in 1972 purchased the same amount of goods and services as a. $25.51 purchases today. b. $207.00 purchases today. c. $3.92 purchases today. d. $324.00 purchases today.

a. 25.51 purchased today to fin todays price, put todays CPI on top

Who would be included in the labor force? a. Louie, who is waiting for his new job to start b. Daisey, who has become discouraged looking for a job and has quit looking c. Donald, an unpaid stay-at-home father d. None of the above is correct.

a. Louie, who is waiting for his new job to start

Which of the following equations will always represent GDP in an open economy? a. Y = C + I + G + NX b. Y = C + I + G c. I = Y - C + G d. S = I - G

a. Y=C + I + G + NX

Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as "unemployed"? a. anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid off b. anyone who is not employed c. anyone who is not employed, is available for work, and has looked for work in the past four weeks d. anyone who is not employed, is available for work, has looked for work in the past four weeks, anyone who is waiting to be recalled from a job from which they have been laid off, and anyone who is employed part time and has searched for full time employment in the past 4 weeks

a. anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid off

when a union raises the wage above the equilibrium level a. both the quantity of labor supplied and unemployment rise. b. the quantity of labor supplied rises and unemployment falls. c. the quantity of labor supplied falls and unemployment rises. d. both the quantity of labor supplied and unemployment fall.

a. both the quantity of labor supplied and unemployment rise

An increase in a country's population may contribute to the rate of technological progress because a larger population a. brings with it more scientists, inventors, and engineers. b. forces the capital stock to be spread more thinly. c. forces natural resources to be spread more thinly. d. brings with it more favorable recognition from other countries.

a. brings with it more scientists, inventors, and engineers

Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills is called a. frictional unemployment. b. cyclical unemployment. c. structural unemployment. d. the natural rate of unemployment.

a. frictional unemployment

National saving a. is the total income in the economy that remains after paying for consumption and government purchases. b. is equal to private saving minus public saving. c. is the total income in the economy that remains after paying for consumption. d. is always greater than investment for a closed economy.

a. is the total income in the economy that remains after paying for consumption and government purchases

If the demand for loanable funds shifts to the right, then initially there is a a. shortage so the interest rate will rise. b. surplus so the interest rate will rise. c. shortage so the interest rate will fall. d. surplus so the interest rate will fall.

a. shortage so the interest rate will rise

A policy that induces people to save more shifts a. the supply of loanable funds rightward and increases investment. b. the supply of loanable funds rightward and decreases investment. c. the supply of loanable funds leftward and increases investment. d. the supply of loanable funds leftward and decreases investment.

a. the supply of loanable funds rightward and increases investment

Of the following groups, who is eligible for unemployment insurance benefits? a. the unemployed who were laid off because their previous employers no longer needed their skills b. the unemployed who quit their jobs c. the unemployed who just entered the labor force d. the unemployed who were fired for cause

a. the unemployed who were laid off because their previous employers no longer needed their skills

Which of the following statements is true? a. Even if we know the values of the consumer price index for the years 2009 and 2010, we cannot calculate the inflation rate for 2010 if we do not know which year is the base year. b. If we know the base year is 2000, and if we know the value of the consumer price index for the year 1995, then we have all the information we need to calculate the percentage change in the cost of living between 1995 and 2000. c. If we know the base year is 2000, and if we know the value of the consumer price index for the year 1995, then we have all the information we need to calculate the inflation rate for 1995. d. If we know the base year is 1990, and if we know the value of the consumer price index for the year 2010, then we have all the information we need to calculate the inflation rate for 2010.

b. If we know the base year is 2000, and if we know the value of the consumer price index for the year 1995, then we have all the information we need to calculate the percentage change in the cost of living between 1995 and 2000.

Morgan, a financial advisor, has told her clients the following things. Which of her statements is not correct? a. "If you purchase a municipal bond, you can sell it before it matures." b. "U.S. government bonds generally pay a higher rate of interest than corporate bonds." c. "The interest received on corporate bonds is taxable." d. "U.S. government bonds have the lowest default risk."

b. "U.S. government bonds generally pay a higher rate of interest than corporate bonds.

According to the loanable funds model, which of the following events would result in higher interest rates and greater saving? a. Congress passes a reform of the tax laws that encourages greater saving. b. Congress passes a reform of the tax laws that encourages greater investment. c. The government goes from running a budget deficit to running a budget surplus. d. Firms become pessimistic about the future and, as a result, they cut back on their plans to buy new equipment and build new factories.

b. Congress passes a reform of the tax laws that encourages greater investment.

If the price of Spanish olives imported into the United States decreases, then a. both the GDP deflator and the consumer price index will decrease. b. the consumer price index will decrease, but the GDP deflator will not decrease. c. the GDP deflator will decrease, but the consumer price index will not decrease. d. neither the GDP deflator nor the consumer price index will decrease.

b. the consumer price index will decrease, but the GDP deflator will not decrease.

If the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied, a. there is a surplus so interest rates will rise. b. there is a shortage so interest rates will rise. c. there is a shortage so interest rates will fall. d. there is a surplus so interest rates will fall.

b. there is a shortage so interest rates will rise.

In 1970, Professor Plum earned $12,000; in 1980, he earned $24,000; and in 1990, he earned $36,000. If the CPI was 40 in 1970, 60 in 1980, and 100 in 1990, then in real terms, Professor Plum's salary was highest in a. 1980 and lowest in 1990. b. 1980 and lowest in 1970. c. 1990 and lowest in 1980. d. 1990 and lowest in 1970.

b. 1980 and lowest in 1970

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period? a. 2.5 percent b. 3.7 percent c. 1.6 percent d. 6 percent

b. 3.7 %

A U.S. publisher purchases new computers that were manufactured in the U.S. This purchase by itself makes a. a positive contribution both to consumption and to GDP. b. a positive contribution both to investment and to GDP. c. a positive contribution to investment, but it does not affect GDP. d. a positive contribution to GDP, but it does not affect investment or consumption.

b. a positive contribution to both investment and to GDP

In the United States, if the price of imported oil rises so that the prices of gasoline and heating oil rise, then the a. consumer price index rises slightly more than does the GDP deflator. b. consumer price index rises much more than does the GDP deflator. c. GDP deflator and the consumer price index rise by about the same amount. d. GDP deflator rises much more than does the consumer price index.

b. consumer price index rises much more than does the GDP deflator

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely a. increased. Correctb. decreased. c. stayed the same. d. may have increased, decreased, or stayed the same.

b. decreased

Country A experienced a growth rate of real GDP per person of 2.5 percent per year throughout the 1900's. In view of other countries' experiences during this time country A's growth was a. moderately high. b. exceptionally high. c. moderately low. d. exceptionally low.

b. exceptionally high

Despite its status as one of the richest countries in the world, Japan a. has a very low level of productivity. b. has few natural resources. c. engages in a relatively small amount of international trade. d. has very little human capital.

b. has few natural resources

Suppose the price of a gallon of ice cream rises from $4 to $5 and the price of a can of coffee rises from $2 to $2.50. If the CPI rises from 150 to 177, then people likely will buy a. less ice cream and more coffee. b. less ice cream and less coffee. c. more ice cream and less coffee. d. more ice cream and more coffee.

b. less ice cream and less coffee

short term bonds are generally a. less risky than long-term bonds and so they feature higher interest rates. b. less risky than long-term bonds and so they feature lower interest rates. c. more risky than long-term bonds and so they feature higher interest rates. d. more risky than long-term bonds and so they feature lower interest rates.

b. less risky than long-term bonds and so they feature lower interest rates

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double? a. productivity, but not output b. output, but not productivity c. both output and productivity d. neither productivity nor output

b. output, but not productivity

Which government entity computes U.S. GDP every three months? a. the Department of Treasury b. the Department of Commerce c. the Council of Economic Advisers d. the Federal Reserve

b. the department of commerce

Assuming diminishing returns, a. the increase in output growth from an increase in the saving rate rises over time, and that, other things the same, rich countries should grow faster than poor ones. b. the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, poor countries should grow faster than rich ones. c. the increase in output growth from an increase in the saving rate rises over time, and that, other things the same, poor countries should grow faster than rich ones. d. the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, rich countries should grow faster than poor ones.

b. the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, poor countries should grow faster than rich ones.

Suppose the government deficit increases, but the interest rate remains the same. Which of the following things might have happened simultaneously to keep interest rates the same? a. The government reduces the amount that people may put into savings accounts on which the interest is tax exempt. b. Because they are optimistic about the future of the economy, firms desire to borrow more to purchase physical capital. c. Consumers decide to decrease consumption and work more. d. All of the above could explain why the interest rate would be unchanged.

c. Consumers decide to decrease consumption and work more.

When the consumer price index rises, the typical family a. finds that its standard of living is not affected. b. can spend fewer dollars to maintain the same standard of living. c. has to spend more dollars to maintain the same standard of living. d. can offset the effects of rising prices by saving more.

c. has to spend more dollars to maintain the same standard of living.

Anna recently graduated from college with a degree in electrical engineering, but she has not yet started working. To be counted as "unemployed" she a. must have looked for work no more than twelve weeks ago. b. must have looked for work no more than a week ago. c. must have looked for work no more than four weeks ago. d. does not have to have looked for work.

c. must have looked for work no more than four weeks ago.

If the price of domestically produced power tools increases, then a. the consumer price index will increase, and the GDP deflator will be unaffected. b. the consumer price index will be unaffected, and the GDP deflator will increase. c. the consumer price index and the GDP deflator will both increase. d. the consumer price index and the GDP deflator will both be unaffected.

c. the consumer price index and the GDP deflator will both increase.

In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity? a. 4000 pounds of laundry b. 500 pounds of laundry per hour c. 100 pounds of laundry per hour d. None of the above is correct.

c. 100 pounds of laundry per hour

The Bureau of Labor Statistics reported in 2005 that there were 53.23 million people over age 25 who had at least a bachelor's degree, 40.59 million of whom were employed and 0.98 million of whom were unemployed. What were the labor-force participation rate and the unemployment rate for this group? a. 76.3% and 2.4% b. 78.1% and 1.8% c. 78.1% and 2.4% d. 76.3% and 1.8%

c. 78.1% and 2.4%

Which of the following would a macroeconomist consider as investment? a. Marisa purchases a bond issued by Proctor and Gamble Corp. b. Karlee purchases stock issued by Texas Instruments, Inc. c. Charlie builds a new coffee shop. d. All of the above are correct.

c. Charlie builds a new coffee shop

If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then a. U.S. consumption increases, U.S. net exports decrease, and U.S. GDP decreases. b. U.S. consumption decreases, U.S. net exports increase, and U.S. GDP is unaffected. c. U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected. d. U.S. consumption decreases, U.S. net exports increase, and U.S. GDP increases.

c. U.S consumption increases, U.S net exports decrease, and U.S GDP is unaffected

Which of the following expressions must be equal to national saving for a closed economy? a. Y - I - G - NX b. Y - I - C c. Y - C - G d. G + C - Y

c. Y-C-G

The consumer price index tries to gauge how much incomes must rise to maintain a. the highest standard of living possible. b. a decreasing standard of living. c. a constant standard of living. d. an increasing standard of living.

c. a constant standard of living

The efficiency-wage theory of worker turnover suggests that firms with higher turnover will have a. higher production costs and higher profits. b. lower production costs and lower profits. c. higher production costs and lower profits. d. lower production costs and higher profits.

c. higher production costs and lower profits

Suppose a country has only a sales tax. Now suppose it replaces the sales tax with an income tax that includes a tax on interest income. This would make equilibrium a. interest rates and the equilibrium quantity of loanable funds rise. b. interest rates and the equilibrium quantity of loanable funds fall. c. interest rates rise and the equilibrium quantity of loanable funds fall. d. interest rates fall and the equilibrium quantity of loanable funds rise.

c. interest rates rise and the equilibrium quantity of loanable funds fall

Other things the same, a country that increases its saving rate increases a. its future real GDP, but not its future productivity. b. its future productivity, but not its future real GDP. c. its future productivity and future real GDP. d. neither its future productivity nor future real GDP.

c. its future productivity and future real GDP.

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise? a. both real GDP and nominal GDP. b. real GDP but not nominal GDP. c. nominal GDP but not real GDP. d. neither nominal GDP nor real GDP.

c. nominal GDP but not real GDP

Which of the following transactions is not included in GDP? a. oranges sold to households by a grocer b. orange juice sold by a restaurant to its diners c. oranges sold by a farmer to a grocery store d. all of the above

c. oranges sold by a farmer to a grocery store

The Bureau of Labor Statistics counts discouraged workers as a. employed. Including them as employed makes the unemployment rate lower than otherwise. b. unemployed. Including them as unemployed makes the unemployment rate higher than otherwise. c. out of the labor force. If the were counted as unemployed the unemployment rate would be higher. d. None of the above is correct.

c. out of the labor force. If the were counted as unemployed the unemployment rate would be higher.

In the equation for the production function Y/L represents a. the availability of natural resources. b. output. c. productivity. d. the amount of human capital.

c. productivity

If nominal GDP doubles and the GDP deflator doubles, then real GDP a. triples. b. quadruples. c. remains constant. d. doubles.

c. remains constant

If Congress instituted an investment tax credit, the equilibrium quantity of loanable funds would a. move in an uncertain direction. b. be unchanged. c. rise. d. fall.

c. rise

Long term bonds are: a. less risky than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds. b. less risky than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates on short-term bonds. c. riskier than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds. d. riskier than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates on short-term bonds.

c. riskier than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds.

Suppose lawn mowers are part of the market basket used to compute the CPI. Suppose also that the quality of lawn mowers deteriorates while the price of lawn mowers stays the same. If the Bureau of Labor Statistics is able to precisely adjust the CPI for the improvement in quality, then, other things equal, a. the CPI will fall. b. the CPI will stay the same. c. the CPI will rise. d. lawn mowers will no longer be included in the market basket.

c. the CPI will rise

Estimates of the values of which of the following non-market goods or services are included in GDP? a. the value of unpaid housework b. the value of services provided by major household appliances purchased in a previous period c. the estimated rental value of owner-occupied homes d. All of the above are included in GDP.

c. the estimated rental value of owner-occupied homes

A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarter(s) does(do) these transactions raise consumption? a. the first and the second b. the first but not the second c. the second but not the first d. neither the first nor the second

c. the second but not the first

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital? a. the owner's knowledge of how to prepare vegetarian entrees b. the money in the owner's account at the bank from which she borrowed money c. the tables and chairs in the restaurant d. the fresh fruits, vegetables, and grains the restaurant uses to prepare its meals

c. the tables and chairs in the restaurant

Suppose that Congress were to repeal an investment tax credit. What would happen in the market for loanable funds? a. The demand and supply of loanable funds would shift left. b. The supply of loanable funds would shift right. c. The demand and supply of loanable funds would shift right. d. The demand for loanable funds would shift left.

d. The demand for loanable funds would shift left.

After the terrorist attacks on September 11, 2001, governments within the United States raised expenditures to increase security at airports. These purchases of goods and services are a. not included in GDP since the government collects taxes to pay for them. b. not included in GDP since they do not represent production. c. included in GDP only to the extent that the federal government, rather than state or local governments, paid for them. d. included in GDP since government expenditures on goods and services are included in GDP.

d. included in GDP since government expenditures on goods and services are included in GDP.

The source of the supply of loanable funds a. and the demand for loanable funds is investment. b. is investment and the source of demand for loanable funds is saving. c. and the demand for loanable funds is saving. d. is saving and the source of demand for loanable funds is investment.

d. is saving and the source of demand for loanable funds is investment.

If the CPI was 95 in 1955 and is 475 today, then $100 today purchases the same amount of goods and services as a. $4.75 purchased in 1955. b. $500 purchased in 1955. c. $95.00 purchased in 1955. d. $20.00 purchased in 1955.

d. $20 purchased in 1955

Henri earned a salary of $50,000 in 2001 and $70,000 in 2006. The consumer price index was 177 in 2001 and 265.5 in 2006. Henri's 2006 salary in 2001 dollars is a. $105,000.00. b. $35,000.00. c. $61,950.00 d. $46,666.67.

d. $46,666.67

You know that a candy bar costs sixty cents today. You also know the CPI for 1962 and the CPI for today. Which of the following would you use to compute the price of the candy bar in 1962 prices? a. sixty cents (1962 CPI - today's CPI) b. sixty cents (today's CPI - 1962 CPI) c. sixty cents (today's CPI / 1962 CPI) d. sixty cents (1962 CPI / today's CPI)

d. .60 (1962 CPI/ todays CPI) to find 1962 prices, 1962 cpi goes on top

Which of the following is true concerning interest rates on bonds? a. The tax treatment of interest earned on municipals bonds makes the interest rate on them lower than otherwise. High default risk makes the interest rate on a bond lower than otherwise. b. The tax treatment of interest earned on municipals bonds makes the interest rate on them higher than otherwise. High default risk makes the interest rate on a bond higher than otherwise. c. The tax treatment of interest earned on municipals bonds makes the interest rate on them higher than otherwise. High default risk makes the interest rate on a bond lower than otherwise. d. The tax treatment of interest earned on municipals bonds makes the interest rate on them lower than otherwise. High default risk makes the interest rate on a bond higher than otherwise.

d. The tax treatment of interest earned on municipals bonds makes the interest rate on them lower than otherwise. High default risk makes the interest rate on a bond higher than otherwise.

Which of the following is a financial intermediary? a. a wealthy individual who regularly buys and holds large quantities of government bonds b. the stock market c. a U.S. government bond d. a mutual fund

d. a mutual fund

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's a. productivity is greater than Will's. b. output is greater than Will's. c. standard of living is higher than Will's. d. All of the above are correct.

d. all are correct

Caroline is the owner of a hair-styling salon and spa. She decides to raise the wages of her workers even though she faces an excess supply of labor. Her decision a. might increase profits if it attracts a better pool of workers to apply for jobs at her salon. b. will increase the excess supply of labor. c. may increase the quality of her work force. d. All of the above are correct.

d. all of the above are correct

Which of the following causes of unemployment is associated with a wage rate above the market equilibrium level? a. minimum-wage laws b. unions c. efficiency wages d. All of the above are correct.

d. all of the above are correct

Who of the following are included in the Bureau of Labor Statistics' "employed" category? a. certain unpaid workers b. part-time workers c. workers on vacation d. All of the above are correct.

d. all of the above are correct

The theory of efficiency wages provides a possible explanation as to why a. workers form unions. b. firms should try to reduce surpluses of labor. c. firms may be inclined to keep their workers' wages below the equilibrium level. d. firms may be inclined to keep their workers' wages above the equilibrium level.

d. firms may be inclined to keep their workers' wages above the equilibrium level.

In Belgium, Norway, and Sweden, the percentage of workers who belong to unions is a. almost zero. b. about the same as it is in the United States. c. less than it is in the United States. d. greater than it is in the United States.

d. greater than it is in the united states

When the relative price of a good decreases, consumers respond by buying a. a smaller quantity of that good and a smaller quantity of substitutes for that good. b. a smaller quantity of that good and a larger quantity of substitutes for that good. c. a larger quantity of that good and a larger quantity of substitutes for that good. d. a larger quantity of that good and a smaller quantity of substitutes for that good.

d. larger quantities of that good and a smaller quantity of substitutes for that good

inflation rate formula:

inflation rate in year 2= CPI in year 2 -CPI in year 1 / CPI in year 1 *100

source of demand for loanable funds

investments

An increase in capital will increase real GDP per person a. more in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. b. less in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment. c. less in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. d. more in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment.

d. more in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment.

Frictional unemployment is thought to explain relatively a. long spells of unemployment, while structural unemployment is thought to explain relatively short spells of unemployment. b. long spells of unemployment, as is structural unemployment. c. short spells of unemployment, as is structural unemployment. d. short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment.

d. short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment.

If the supply of and demand for loanable funds both shift left, which of the following necessarily happens? a. the equilibrium quantity of loanable funds rises b. the equilibrium interest rate falls c. the equilibrium interest rate rises d. the equilibrium quantity of loanable funds falls

d. the equilibrium quantity of loanable funds falls

because a high interest rate makes borrowing more expensive, the quantity of loanable funds demanded...

falls as the interest rate rises

In the Gdp accounts, production equals

income

Suppose a basket of goods and services has been selected to calculate the CPI. In 2002, the basket's cost was $80; in 2008, the basket's cost was $92; and in 2010, the basket's cost was $108. The base year must be

the base year cannot be determined from the given information

economists use the term inflation to describe a situation in which

the economy's overall price level is rising

The introduction of the video cassette recorder in the 1970s exemplified a problem in measuring the cost of living; that problem is the problem of

the introduction of new goods