ECON Exam 3

Which of the expenditure components of GDP can be negative?

net exports

Investment spending includes spending on:

new capital goods

_________ analysis addresses the question of whether a policy should be used, while ________ analysis addresses the economic consequences of a particular policy.

normative; positive

Three equivalent ways to measure GDP are total _____, total _____, and total ______.

production; income; expenditure

The government purchases component of GDP includes:

purchases of final goods and services

The two main responsibilities of the federal reserve system are to ________ and to _________

conduct monetary policy; oversee financial markets

Regular interest payments made to bondholders are called __________ payments.

coupon

The situation when the price of most goods and services are falling over time is called:

deflation

To aggregate 300 tons of steel, 5,000 bushels of wheat, and 1 million barrels of crude oil, economists add together the ________ of the three products

dollar value

Susan Clark would like to work forty hours per week, but can only find twenty hours per week of work. in the official employment statistics, Susan is classified as:

employed

Which of the following events would increase the unemployment rate, if nothing else changed?

employed workers leave the labor force

Macroeconomic issues include all of the following EXCEPT

energy reserves

Savings deposits are _______ the M1 measure of money and ______ the M2 measure of money

excluded from; included in

A decision by congress to reduce spending in order to balance the government's budget is an example of ________ policy

fiscal

If tax revenues equal 20 percent of total output and government expenditures equal 25 percent of total output, then there is a

government budget deficit

The four categories of final users of GDP are:

households, firms, governments, and the foreign sector

Which of the following is the bast example of money used as a medium of exchange?

in prison cigarettes are traded for socks, candy and food, even by nonsmokers

If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 200 million, then output per person:

remains constant

Government purchases include all of the following except:

social security benefits paid by the federal government

The total market value of production in an economic must equal total:

spending on final goods and services

A CPI that equals 1.34 in 2008 (when 2000 is the base year) means that:

the average level of prices is 34 percent higher in 2008 than in the base year

the maturation date of a bond is the date at which:

the principal will be repaid

Bank reserves divided by bank deposits is called:

the reserve/deposit ratio

GDP can be measure as each of the following except:

total business revenues

If its exports are greater than its imports, then a country has a:

trade surplus

suppose that the total production of an economy consists of 4 oranges and 10 candy bars, each orange sells for $0.25 and each candy bar sells for $0.50. What is the market value of production in the economy?

$6.00

If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?

$7

Suppose that the total expenditures for a typical household in 2010 equaled $2,500 per month, while the cost of purchasing exactly the same items in 2015 was $3,000. If 2010 is the base year, the CPI for the year 2010 equals:

1.00

in a country with 200 million people aged 16 years and older, 120 million are in the labor force, and 114 million are employed what is the participation rate?

60%

Given the following data for the economy, compute the value of GDP. Government purchases of goods and services: 10, Consumption Expenditures: 70, Exports: 5, Imports: 12, Change in inventories: -7, Construction of new homes and apartments: 15, Sales of existing homes and apartments: 22, Government payments to retirees: 17, Business fixed investment: 9

90

which of the following would increase the investment component of U.S. GDP?

A laundry-mat in Seattle purchases a new washing machine produced in the U.S.

Who of the following would be considered a discouraged worker?

Frank would like to work, but has not been looking for work because he believes no jobs are available

Which of the following transactions would be included in the GDP of the United States?

Honda produces cars in Ohio

In Econland exports equals 15% of total output, while imports equal 20% of total output. Econland has:

a trade deficit

Normative analysis:

addresses the questions whether a policy should be used

The value of intermediate goods is excluded from the measurement of GDP in order to:

avoid double counting

The direct trade of goods and services for other goods and services is called:

barter

Real GDP is measured in ______ prices; nominal GDP is measured in ______ prices.

base-year; current

Profits, rents, interest, and royalties are examples of:

capital income

Shares of stock are:

claims to partial ownership of a firm

If average labor productivity increases while population and the number of employed workers remain constant, then total output:

increases

In the base year, real GDP ______ nominal GDP.

is equal to

If prices in the current year are higher than in the base year, real GDP in the current year _________ nominal GDP in the current year.

is less than

In a fractional-reserve banking system the reserve/deposit ratio equals:

less than 100 percent

GDP equals _________ of final _________ produced within a country during a given period of time.

market value goods and services

Double coincidences of wants is avoided if money is used as as:

medium of exchange

__________ policy focuses on the nations money supply, while __________ policy focuses on the government's budget.

monetary; fiscal

________ policy focuses on the nation's money supply while ________ policy aims at changing the underlying structures or institutions of the economy.

monetary; structural

If average labor productivity increases, then the same number of employed workers will always produce:

more total output