Econ 2
Which of the following is an example of barter?
A barber gives a plumber a haircut in exchange for the plumber fixing the barber's leaky faucet.
Which of the following social concepts involves collective ownership of property rights:
Communism
The interest rate that the Fed charges banks that borrow reserves from it is the
Discount rate
Which of the following is NOT a tool of the Federal Reserve Bank/FOMC to manage monetary policy in the US:
Dollar cost averaging and de-averaging
Which group within the Federal Reserve System meets to discuss changes in the economy and determine monetary policy?
FOMC
One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00. Taking these four transactions into account, what is the effect on GDP?
GDP increases by $5.00.
Darin grows and sells marijuana to Jennifer. Thomas is an organic farmer who sells broccoli to Jennifer. Marijuana is an illegal good and broccoli is a legal good. Assume that if Jennifer marries either, they give her what they use to sell her. Which of the following statements is consistent with the way GDP is computed?
GDP will fall if Jennifer marries Thomas but not if she marries Darin.
The new Chairman of the US Federal Reserve Bank is
Janet Yellen
Milton Friedman, the famous economist, would most likely favor
Neither Monetary Nor Fiscal Policy
President Obama sets which of the following policies
Neither Monetary Nor Fiscal Policy
Ralph pays someone to mow his lawn, while Mike mows his own la n. Regarding these two practices, which of the following statements is correct?
Only Ralph' payments are included in GDP.
John Maynard Keynes, the famous economist, would NOT likely choose which of the following policies
Reducing taxes sharply, and letting corporations and individual consumers spur growth through their own production and consumption decisions
In computing the consumer price index, a base year is chosen. Which of the fall wing statements about the base year is correct?
The value of the consumer price index is always 100 in the base year.
An American company operates a fast food restaurant in Paris, France. Which of the following statements is accurate?
The value of the goods and services produced by the restaurant is included in French GDP, but not in U.S. GDP.
Gina, a U.S. citizen, works only in Bermuda. The value of Gina's production is included in
U.S. GNP and Bermudan GDP.
Most goods and services produced at home
and most goods and services produced illegally are excluded from GDP.
Most goods and services produced at home
and most goods and services produced illegally are excluded from GDP.
When the Fed decreases the discount rate, banks will
borrow more from the Fed and lend more to the public. The money supply increases
Suppose there are a large number of men who used to work or se k work who now no longer do either. Other things the same, this make
both the number of people unemployed and the labor force fall.
What is not included in GDP?
carrots grown in your garden and eaten by your family
Over time/ people have come to rely more on market-produced go ds and services and less on goods and services they produce for themselves. For example/ busy people with high incomes/ rather than cleaning their own houses/ hire people to clea their houses. By itself/ this change has
caused measured GDP to rise.
In the calculation of the CPI, books are given greater weight than magazines if
consumers buy more books than magazines.
Which of the following does the Federal Reserve not do?
convert Federal Reserve Notes into gold
Macroeconomists study
economy-wide phenomena
Jason works part-time as a babysitter. The Bureau of Labor Statistics counts Jason as
employed and in the labor force.
Based on U.S. data for 2008, the poverty rate is the highest for which group of people?
female households, no spouse present
Gasoline is considered a final good if it is sold by a
gasoline £i$ station to a motorist in Los Angeles.
Which of the following statistics is usually regarded as the best singIe measure of a society's economic well-being?
gross ~ domestic product
Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?
gross domestic product
You use U.S. currency to pay the owner of a restaurant for a delicious meal. The currency
has no intrinsic value. The exchange is not an example of barter
In the CPI, goods and services are weighted according to
how much consumers buy of each good or service.
For an economy as a whole
income must equal expenditure.
If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP
increases
f a state made a previously-illegal activity, such as gambling or pr stitution, legal, then, other things equal, GDP
increases.
Spots, Inc. produces ink and sells it to Write on Target, which ma s pens. The ink produced by Spots, Inc. is called
intermediate good.
A person who is counted as unemployed by the Bureau of Labor Statistics
is also in the labor force. must have recently looked for work or be on temporary layoff. must be at least 16 years old.
A person who is counted as unemployed by the Bureau of Labor Satistics
is also in the labor force.must have recently looked for work or be on temporary layoff. must be at least 16 years old.
US currency is
is backed by full faith and credit of the united states.
The Federal Reserve
is responsible for conducting the nation's monetary policy, and it plays a role in regulating banks
Gross domestic product adds together many different kinds of goo s and services into a single measure of the value of economic activity. To do this, GDP akes use of
market prices
The consumer price index is used to
monitor changes in the cost of living over time.
The consumer price index is used to
monitor changes in the cost of living over time.
Angelica is an unpaid homemaker who works as a volunteer at the ocal Red Cross and is currently not looking for a paid job. The Bureau of Labor Statistic counts Angelica as
neither in the labor force nor unemployed.
Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as
neither in the labor force nor unemployed.
Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as
neither in the labor force nor unemployed.
A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling. His move
raises GDP
Which of the following agencies calculates the CPI?
the Bureau of Labor Statistics
Which group within the Federal Reserve System meets to discuss changes in the economy and determine monetary policy?
the FOMC
The agency responsible for regulating the money supply in the United States is
the Federal Reserve.
If a bank has a reserve ratio of 8 percent, then
the bank keeps 8 percent of its deposits as reserves and loans out the rest.
The CPI is a measure of the overall cost of
the goods and services purchased by a typical consumer.
What basket of goods and services is used to construct the CPI?
the goods and services that are typically bought by consumers as determined by government surveys
The poverty rate is
the percentage of the population whose family income falls below a specified level
GDP is defined as the
value of all final goods and services produced within a country in a given period of time
Gross domestic product measures
~ income and expenditures.
The agency responsible for regulating the money supply in the United States is
~ the Federal Reserve.
