Econ Macro exam 1

you read in the newspaper that the consumer price index in 2011 was 120. you conclude that a typical market basket in 2011 would have cost ____ more than the same market basket purchased in___

20%, the base year

(ref 5-2 table) the demand for chocolate covered peanuts, if george, barbara, and dan are the only three buyers in the market and the price of a bag of choco covered peanuts is .50, the total market quantity demanded is ____ bags per month

210

(ref 6-1) if the prices of inputs used to produce and transport coconuts increased, it could be represented in the figure as a movement from

C to A

a change in the level of overall spending in the economy due to a change in the interest rate, brought about by a change in the quantity of money, is an example of ___ policy

monetary

changing interest rates is an example of ____ policy

monetary

which resource is not one that pertains to the production of rice

money

an increase in the amount of physical capital per worker____, while technological progress____

moves the economy along the aggregate production function, shifts up the aggregate production function

assume an economy is operating on its production possibility frontier, which shows the production of military and civilian goods. if the output of military goods is increased, the output of civilian goods

must decrease

internet employment agencies have simplified the job search for the applicants. they have also led to an ___ unemployment

decrease in frictional

if an economy is producing at a point on its production possibilities frontier, it is

efficient in production but not necessarily in allocation

canada, mexico, and the united states have

eliminated many trade barriers among themselves

which statement is true

it is possible to have an absolute disadvantage but a comparative advantage in something

spending on inputs is ______ of GDP, and investment spending is ____ of GDP

not a part, part

a person who is not working or looking for work is

not counted in the unemployment rate

According to official statistics, discouraged workers are

not included in the labor force

the world trade organization

oversees trade agreements

(ref 7-3) the figure shows how supply and demand might shift in response to specific events. suppose the population increases. which panel best describes how this will affect the market for apples

panel c

a central and fundamental theme in economics is that

people have unlimited wants but limited means to satisfy them

the nominal interest rate equals the real interest rate

plus the rate of inflation

which statement is true concerning the relationship between efficiency and equity

policies designed to increase efficiency may decrease equity

National savings equals:

private savings plus the budget balance

investment spending is spending on

productive physical capital

banks are financial intermediaries that

provide liquid assets to lenders and long term financing to borrowers

the aggregate production function measures productivity as

real GDP per worker

dividing real GDP by the population

results in real GDP per capita

in the 1960s japan was the fastest growing major economy, and it also

spent a larger share of its GDP on investments goods than did other major economies

the study of economics arises because of the necessity of choice, and the necessity of choice arises because of the fundamental problem of scarcity of resources

true

when a nations economy grows

true

Marginal analysis studies how individuals decide

whether to do a bit more of an activity versus a bit less of it

(ref 3-4 table)comparative advantage I. the opportunity cost of producing 1 box of herring for sweden is ____ box of cell phones

.1

(ref 3-5 table) the opportunity cost producing 1 box of peaches for westland is ____ box of oranges

.25

(ref 6-9 table) use table, competitive market for good z. the equilibrium price and quantity in this market are, respectively

10 and 30 units

(ref 15-6) the year in which the increase in nominal GDP is exclusively due to the increase in the price level rather than physical output is year

6

approximately how many prices are used to calculate the consumer price index each month

80,000

(ref2-6) omars production possibilities. which point or points represents a combination of coconuts and fish that is efficient in production

A and B

the portion of a firms profit paid to the owner of one share of its stock would accurately be characterized as

a dividend

An example of an import quota is a

a limit on the total number of honda automobiles imported from Japan

which example illustrates consumption

a new car purchased for personal use

a maximum price legislated by the government is called

a price ceiling

the problem of scarcity os confronted by

all societies

a minimum price set above the equilibrium price is a

binding price floor

which statement is true about inflation and deflation

both inflation and deflation can pose problems for the economy

rising total output accompanied by increasing employment is generally known as a

expansion

businesses buy resources used to produce goods and services in the

factor market

a household is a person or group of people who buy resources and produce goods and services

false

although U.S exports and imports have grown substantially in absolute terms since the 1960s, the share of exports and imports in total output has fallen significantly over the past few decades

false

the convergence hypothesis says that international differences in real GDP per capita tend to increase over time

false

during deflation, the

general price level falls

sometimes the government varies its spending, depending on the needs of the country. which economic principle does this statement best represent

government policies can change spending

if we add up the consumer spending on goods and services, investment spending, government purchases of goods and services, and the value of exports, then subtract the value of imports, we have measured the nation's

gross domestic product

in the circular flow diagram, an individual or a group of people (usually a family) who share their income is a

household

in the circular flow diagram, the product market is where

households buy goods and services

which item cannot properly be called a part of infrastructure

human capital

along a given supply curve, an increase in the price of a good will

increase producer surplus

a tariff _____ the price recieved by domestic producers and____ the price paid by domestic consumers

increases, increases

which statement is true

inflation means an increase in the overall level of prices

show-leather costs are the costs of

the increased number of transactions as inflation increases

economist use____ as a model to explain how savers and borrowers come together to determine the equilibrium rate of interest

the market for loanable funds

_____ overseas international trade agreements

the world trade organization

which statement is a positive economic statement

there has been an increase in the rate of inflation