Econ exam 3

How many technical recessions did the United States experience in the period listed above? Why? Explain verbally.

1, only two negatives count as a recession

Suppose 37-year-old Chris is a mother who has become bored with staying at home and raising her two-year-old daughter. As a result, she has placed her child in day care, is available to begin a job immediately, and has been actively seeking employment for the last seven weeks. In this situation Chris would be considered _____ unemployed. 1.frictionally 2.structurally 3.cyclically 4.seasonally

1. Frictional

The American Economic Association holds its annual conference in the first week of January. At the conference, universities from around the world interview potential candidates to fill job positions for the next academic year. This centralized interviewing system is most effective at combating _____ unemployment. 1.frictional 2.structural 3.cyclical 4.seasonal

1. Frictional

Suppose an American tourist visiting Paris, France stops to read a menu posted outside a restaurant. On the menu the price of each dish is listed in euros. The tourist pauses to mentally convert the prices into U.S. dollars. After several minutes of consideration, he thinks, "No way am I going to pay $45 to eat at this place." In the situation above, the eurois performing which of the following functions of money? In the situation above, the U.S. dollaris performing which of the following functions of money?

1. unit of account 2. standard of value

y = C + I + G + (X -IM) Where: y = Real Gross Domestic Product (Real GDP) C = Consumption I = Investment G = Government spending X = Exports IM = Imports (X -IM) = Net exports Suppose you purchase a new desk that was produced in the U.S. for use in your home in Baton Rouge. Everything else held constant, this will cause the _____ component of U.S. GDP to increase. 1.consumption (C) 2.investment (I) 3.government spending (G) 4.export (X) 5.import (IM)

1.consumption (C)

In the third quarter of 2018, the aggregate price level was _____ it was in the second quarter of 2018. 1.higher than 2.lower than 3.the same as

1.higher than

The Kapauku people of the mountains of New Guinea used shells in a number of different economic activities, one being that payment in shells was made to buy tobacco and pork. Used in this way, shells were functioning as a 1.medium of exchange. 2.means of unilateral payment. 3.unit of account. 4.standard of value. 5.store of value. 6.standard of deferred payment.

1.medium of exchange.

The Fisher effect is the tendency for _____ interest rates to be high when the inflation rate is _____. 1.nominal; high 2.nominal; low 3.real; high 4.real; low

1.nominal; high

A bag of flour purchased by a bakery from a wholesale distributor 1.will not be counted in GDP because it is an intermediate good. 2.will be counted in GDP as part of consumption. 3.will be counted in GDP as part of investment.

1.will not be counted in GDP because it is an intermediate good.

Answer true or false to the following statement. If the United States economy is operating at full employment, then it is experiencing a zero percent rate of unemployment.

2. False

In the period above, did the United States experience a technical recession? 1.Yes. 2.No.

2. No, all positive numbers

The month-to-month percent change in the total CPI is the most publicized measure of 1.inflation. 2.the inflation rate. 3.the economic growth rate. 4.the business cycle. 5.the unemployment rate.

2. inflation rate

Job openings in the United States increased to 7.6 million in January 2019—the third-highest level on record. For the 11th straight month, job openings have exceeded job seekers.This means that there currently is a _____ in the labor market in the United States. 1.surplus 2.shortage

2. shortage

n the United States, "federal tax laws allow you to deduct your moving expenses if your relocation relates to starting a new job or a transfer to a new location for your present employer. To qualify for the deduction, your new work location must be a sufficient distance from your old home and you must begin working shortly after you arrive." This tax policy is most effective at combating _____ unemployment. 1.frictional 2.structural 3.cyclical 4.seasonal

2. structural

Suppose Leslie lost her job when the typewriter factory closed down nine years ago and has been unemployed ever since. Leslie would be considered _____ unemployed. 1.frictionally 2.structurally 3.cyclically 4.seasonally

2. structurally

Savings account balances are included in which of the following measures of the money supply of the United States? 1.M1 but not M2. 2.M2 but not M1. 3.Both M1 and M2. 4.Neither M1 nor M2.

2.M2 but not M1.

Last April, Christine electronically filed her federal income tax return with the Internal Revenue Service (IRS). She owed the IRS $671 and paid the balance with an electronic transfer of funds from her checking account. This funds transfer is performing which of the following functions of money? 1.Medium of exchange. 2.Means of unilateral payment 3.Unit of account. 4.Standard of value. 5.Store of value. 6.Standard of deferred payment.

2.Means of unilateral payment

Which of the following describes the economic performance of the United States in 2001? 1.Expansion. 2.Recession.

2.Recession.

In which of the following situations would the real interest rate be the highest? 1.The nominal interest rate is 2 percent and the expected inflation rate is 2 percent. 2.The nominal interest rate is 4 percent and the expected inflation rate is 1 percent. 3.The nominal interest rate is 5 percent and the expected inflation rate is 3 percent. 4.The nominal interest rate is 7 percent and the expected inflation rate is 6 percent. 5.The nominal interest rate is 9 percent and the expected inflation rate is 13 percent.

2.The nominal interest rate is 4 percent and the expected inflation rate is 1 percent.

In ancient Mesopotamia the accounts of the city temples were expressed in silver, although payment seems largely to have been made in barley and oil. Used in this way, silver was serving which of the following functions of money? 1.Medium of exchange. 2.Unit of account. 3.Standard of value. 4.Store of value. 5.Standard of deferred payment.

2.Unit of account.

Suppose Lori agrees to lend her sister Holly $1000 for one year at a fixed nominal rate of interest. Suppose further that, at the time the loan is made, both Lori and Holly expect the rate of inflation to be 3 percent. If the actual inflation rate turns out to be 2 percent during the year, then Lori will be _____ off than she expected and Holly will be _____ off than she expected, everything else held constant. 1.better; better 2.better; worse 3.worse; better 4.worse; worse

2.better; worse

Suppose Colleen purchases a new reception desk that was produced in the U.S. for use in her privately-owned medical office in Baton Rouge. Everything else held constant, this will cause the _____ component of U.S. GDP to increase. 1.consumption (C) 2.investment (I) 3.government spending (G) 4.export (X) 5.import (IM)

2.investment (I)

Suppose a privately-owned laundromat in Mexico purchases a new clothes dryer produced in the U.S. Everything else held constant, this will cause the _____ component of MexicanGDP to increase. 1.consumption (C) 2.investment (I) 3.government spending (G) 4.net export (X -IM)

2.investment (I)

In the fourth quarter of 2018, the inflation rate was _____ it was in the fourth quarter of 2017. 1.higher than 2.lower than 3.the same as

2.lower than

The term "business cycle" refers to the _____ fluctuations in _____. 1.short-term; the aggregate price level 2.short-term; economic growth rates 3.short-term; the unemployment rate 4.long-term; the aggregate price level 5.long-term; economic growth rates 6.long-term; the unemployment rate

2.short-term; economic growth rates

Everything else held constant, an across-the-board decrease in federal income tax rates will be most effective in combating _____ unemployment. 1.frictional 2.structural 3.cyclical 4.seasonal

3. cyclical

Demand deposit account balances are included in which of the following measures of the money supply of the United States? 1.M1 but not M2. 2.M2 but not M1. 3.Both M1 and M2. 4.Neither M1 nor M2.

3.Both M1 and M2.

In the United States unemployment rates tend to move _____. This means that when the economy is experiencing a recession, unemployment rates _____, everything else held constant. 1.procyclically; increase 2.procyclically; decrease 3.countercyclically; increase 4.countercyclically; decrease

3.countercyclically; increase

Suppose LSU purchases a new desk that was produced in the U.S. for use in the Economics Department office. Everything else held constant, this will cause the _____ component of U.S. GDP to increase. 1.consumption (C) 2.investment (I) 3.government spending (G) 4.export (X) 5.import (IM)

3.government spending (G)

If nominal income has increased by 3 percent and the aggregate price level has decreased by 4 percent, then real income has _____ by _____ percent, everything else held constant. 1.increased; 1 2.decreased; 1 3.increased; 7 4.decreased; 7 5.increased; 12 6.decreased; 12

3.increased; 7

In the fourth quarter of 2018, the economic growth rate was _____ it was in the first quarter of 2018. 1.higher than 2.lower than 3.the same as

3.the same as

Suppose Brian lost his job as a tennis instructor when his hotel on Long Island, New York closed for the winter. In this situation, Brian would be considered _____ unemployed. 1. frictionally 2.structurally 3.cyclically 4.seasonally

4. seasonally

The euro is included in which of the following measures of the money supply of the United States? 1.M1 but not M2. 2.M2 but not M1. 3.Both M1 and M2. 4.Neither M1 nor M2.

4.Neither M1 nor M2.

Suppose a privately-owned laundromat in Mexico purchases a new clothes dryer produced in the U.S. Everything else held constant, this will cause the _____ component of U.S. GDP to increase. 1.consumption (C) 2.investment (I) 3.government spending (G) 4.export (X) 5.import (IM)

4.export (X)

Suppose that a department store added domestically-produced refrigerators to its inventory in June 2018 because it expected an increase in demand for them. The store miscalculated the preferences of its customers, however, and was not able to sell the refrigerators until January 2019. The refrigerators added to the store's inventory in June 2018 1.will be counted in 2019 GDP because they were sold that year. 2.will not be counted in 2018 GDP because they were intermediate goods that year. 3.will be counted in 2018 GDP as part of consumption (C). 4.will be counted in 2018 GDP as part of investment (I).

4.will be counted in 2018 GDP as part of investment (I).

Suppose your grandmother keeps $1000 in twenty dollar bills in an old coffee can in the pantry. In this situation, the twenties are fulfilling which of the following functions of money? 1.Medium of exchange. 2.Means of unilateral payment. 3.Unit of account. 4.Standard of value. 5.Store of value. 6.Standard of deferred payment.

5.Store of value.

In which of the following situations would it be MOST advantageous to be lending? 1.The nominal interest rate is 2 percent and the expected inflation rate is 3 percent. 2.The nominal interest rate is 3 percent and the expected inflation rate is 1 percent. 3.The nominal interest rate is 4 percent and the expected inflation rate is 7 percent. 4.The nominal interest rate is 8 percent and the expected inflation rate is 8 percent. 5.The nominal interest rate is 12 percent and the expected inflation rate is 9 percent.

5.The nominal interest rate is 12 percent and the expected inflation rate is 9 percent.

Suppose Judy transfers $1,000 from her demand deposit account to her savings account. This transfer will cause _____ in the M1 money supply and _____ in the M2 money supply, everything else held constant. 1.an increase; an increase 2.an increase; a decrease 3.an increase; no change 4.a decrease; an increase 5.a decrease; a decrease 6.a decrease; no change 7.no change; no change

6.a decrease; no change

Suppose a country's economy is experiencing a recession. This means that there is a _____ in the labor market. 1.surplus 2.shortage

1. surplus

Suppose 32-year-old Tegan is a freelance journalist currently researching the effects of coastal erosion on St. Bernard Parish, Louisiana. When she completes the story, she hopes to sell it to a major national publication. 1)Is Tegan included in the civilian noninstitutional population? If so, why (and continue to Q#2)? If not, why not (the end)? 2)Is Tegan classified as employed? If so, why (the end)? If not, why not (and continue to Q#3)? 3)Is Tegan classified as unemployed? If so, why (the end)? If not, why not (and continue to Q#4)? 4)Is Tegan classified as not in the labor force? Why (the end)?

1. Yes 2. Yes, Tegan is Self employed

Suppose Lydia is 39 years old and is a stay-at-home mother. During the last four weeks, she has been occupied with her normal household activities and has neither held nor looked for a job. Suppose further that Lydia's 71-year-old father, Warren, lives with her and has not worked or looked for work in the last two years because of a disability. 1)Is Lydia included in the civilian non-institutional population? If so, why (and continue to Q#2)? If not, why not (the end)? 2)Is Lydia classified as employed? If so, why (the end)? If not, why not (and continue to Q#3)? 3)Is Lydia classified as unemployed? If so, why (the end)? If not, why not (and continue to Q#4)? 4)Is Lydia classified as not in the labor force? Why (the end)?

1. Yes, older than 15 2. No, Not looking for Job 3. no, not looking for job 4. yes

Suppose Lydia is 39 years old and is a stay-at-home mother. During the last four weeks, she has been occupied with her normal household activities and has neither held nor looked for a job. Suppose further that Lydia's 71-year-old father, Warren, lives with her and has not worked or looked for work in the last two years because of a disability. 1)Is Warren included in the civilian noninstitutional population? If so, why (and continue to Q#2)? If not, why not (the end)? 2)Is Warren classified as employed? If so, why (the end)? If not, why not (and continue to Q#3)? 3)Is Warren classified as unemployed? If so, why (the end)? If not, why not (and continue to Q#4)? 4)Is Warren classified as not in the labor force? Why (the end)?

1. Yes, older than 15 2. No, not seeking job 3. No, not seeking job 4. Yes

Suppose Becky is a 17-year-old, full-time high school student who works 10 hours per week, without pay, in her family's seafood restaurant. At present she is actively seeking a paid job at a local bookstore, one which she could begin immediately. 1)Is Becky included in the civilian noninstitutional population? If so, why (and continue to Q#2)? If not, why not (the end)? 2)Is Becky classified as employed? If so, why (the end)? If not, why not (and continue to Q#3)? 3)Is Becky classified as unemployed? If so, why (the end)? If not, why not (and continue to Q#4)? 4)Is Becky classified as not in the labor force? Why (the end)?

1. Yes, older than 16 2. No, working less than 15 hrs 3. Yes, Currently looking for a job

On Friday morning, 03 November 2017, Nick was very busy and only took a brief look at the October 2017 Employment Situation Report for the United States. While driving home that afternoon, he recalled the report and thought, "Hmmm...that's strange." All he could remember about the report was three pieces of information. First, the unemployment rate in October fell to 4.1 percent. Second, the number of people classified as employed decreased from its September level. Third, the civilian noninstitutional population increased from its September level .1)Nick concluded with certainty that the number of people classified as unemployed in October 2017 _____ its September 2017 level. 2)Nick concluded with certainty that the number of people in the civilian labor force in October 2017 _____ its September 2017 level. 3)Nick concluded with certainty that the number of people classified as not in the labor force in October 2017 _____ its September 2017 level.

1. decreased 2. decreased 3. increased

The inflation rate in February 2019, as measured by the total CPI, was higher than/lower than/the same as it was in January 2019. The inflation rate in February 2019, as measured by the core CPI, was higher than/lower than/the same as it was in January 2019. The aggregate price level in January 2019, as measured by the total CPI, was higher than/lower than/the same as it was in December 2018. The aggregate price level in January 2019, as measured by the core CPI, was higher than/lower than/the same as it was in December 2018.

1. higher than 2. lower than 3. same 4. higher than

A continual increase in the aggregate price level is 1.inflation. 2.the inflation rate. 3.the economic growth rate. 4.the business cycle. 5.indexing. 6.deflating.

1. infation

Money is a stock/flow variable. Wealth is a stock/flow variable. Income is a stock/flow variable. Profit is a stock/flow variable.

1. stock 2. stock 3. flow 4. flow

Household survey. The sample is selected to reflect the entire civilian noninstitutional population. Based on responses to a series of questions on work and job search activities, each person 16 years and over in a sample household is classified as employed, unemployed, or not in the labor force.People are classified as employed if they did any work at all as paid employees during the reference week; worked in their own business, profession, or on their own farm; or worked without pay at least 15 hours in a family business or farm. People are also counted as employed if they were temporarily absent from their jobs because of illness, bad weather, vacation, labor-management disputes, or personal reasons.People are classified as unemployed if they meet all of the following criteria: they had no employment during the reference week; they were available for work at that time; and they made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons laid off from a job and expecting recall need not be looking for work to be counted as unemployed. The unemployment data derived from the household survey in no way depend upon the eligibility for or receipt of unemployment insurance benefits.The civilian labor force is the sum of employed and unemployed persons. Those persons not classified as employed or unemployed are not in the labor force. The unemployment rate is the number unemployed as a percent of the labor force. The labor force participation rate is the labor force as a percent of the population, and the employment-population ratio is the employed as a percent of the population. simply say ok

ok