econ 2+3
based on the information in scenario 1 nominal gdp in 2016(in2015 dollars) in this economy was
1025
using the information in the table above the astro consumer price index for 2011 is
126
based on the information in scenario 1 nominal gdp in 2016 in this economy was
1345
if the government increases its purchases of goods and services by 3000 and the mpc is .8 gdp and income will eventually increase by
15000
refer to figure 11.2 suppose that Ca=40 , MPC = .8, I=10. Equillibrium output is
250
using the information in the above table the inflation rate from 2010 to 2011 is about
26%
suppose that a sporting goods store had 800 of golf balls on its shelves at the beginning of 2012 and 1300 at the end of 2012. the amount of inventory investment included in gdp would be
500
given the data in the above table the unemployment rate of metropolis is approximately
6 percent
assume that gdp =10,000 and the MPC=.75. Or policy makers want to increase GDP by 30% by how much should they decrease taxes
750
based on the information in scenario 1 nominal gdp in 2015 in this economy was
830
which of the following is not a component of gross domestic product
Purchases by consumers of used goods
the relationship between the level of prices and the total demand for all goods and services is known as
aggregate demand
Fiscal policy affects aggregate demand because
all of the above table
which of the following would cause an increase in aggregate demand in the short run
an increase in the supply of money
the index most widely used by the government and the private sector to measure changes in
consumer price index
the consumption function describes the relationship between
consumer spending and income
The largest component of GDP is
consumption expenditures
gross domestic product calculations count only final goods and services because
counting all goods and services would lead to double-counting of many activities.
Which prices are used to measure goods and services in calculating the nominal GDP?
current prices
an increase in consumer confidence will
increase autonomous consumption and shift the consumption function upward
which of the following is an example of a contractionary fiscal policy
increasing taxes
One reason the aggregate demand curve is downward sloping is because of the
interest rate effect
the federal government runs a budget deficit when
it spends more than it receives in tax revenues
the costs associated with recalculating priced and printing new price lists when there is inflation are known as
menu costs
Due to the _ effect, the final shift in aggregate demand is larger than the initial shift in aggregate demand.
multiplier
Assuming a long-run aggregate supply curve, an increase in Japanese GDP results in ___________ in output and ___________ in prices.
no change, an increase
economists define the unemployed as individuals who are
not currently working but are actively looking for work
If Sam does not have a job and is not looking for work, he is considered
not in the labor force
transfer payments are excluded from government purchases in gdp accounting because
nothing is being produced in return for the payment
A rancher raises sheep once a year he shears them and sells the raw wool to a processor who cleans it and spins it into yarn the yarn is then sold to a knitting Mill which produces and sells sweaters. In calculating GDP we would count
only the sweaters
customer service representatives who have lost their jobs as a result of call centers being outsourced to india are an example of
structural unemployment
at full employment the unemployment rate equals the
structural unemployment rate plus the frictional unemployment rate
the aggregate supply curve in the short run is different from the aggregate supply curve in the long run because of
the existence of sticky prices in the short run
the slope of consumption function is equal fo
the marginal propensity to consume
autonomous consumption is
the part of consumption that does not depend on income
Fiscal policy refers to
the spending and taxing policies used by the government to influence the economy
Business cycles are
used to describe fluctuations in gdp
The value of all final goods and services produced during a given time period measures a nation's
Gross Domestic Product
When GDP is measured in "current prices," it is known as:
Nominal GDP
How does real gross domestic product (GDP) differ from nominal GDP?
Real GDP controls for price changes, while nominal GDP does not.
the Marginal Propensity to Consume (MPC) us
The fraction of additional income that is spent
a period in which real gdp in the economy declines for at least six months is referred to as
a recession
the unemployment rate is the number of unemployed people
divided by the sum of the number of people who are working and the number of people who are looking for work.
Juanita quit her job to move to Santa Fe to be closer to her family. She is actively looking for a new job in Santa Fe. Juanita is considered
frictionally unemployed
when differences between nominal gdp and real gdp result due to price changes and nothing else is compared an index is created called the
gdp deflator
What are the two tools of fiscal policy?
government spending and taxes
the multiplier that arises from equal increases in government spending and taxes is called
government spending multiplier