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