EXAM 1

a japanese automaker produces $1 million worth of automobiles in its factory in the united states. how much of that is added to the GNP of the united states a. $1,000,000 b. $$0.00 c. $250,000 d. $500,000

$0.00 GDP is the total market value of all final goods and services produced by resources in the united states in a given year

a person who is not looking for work because he or she does not want a job or has given up looking. this group includes:

- full-time students - retirees - individuals in institutions - stay at hope persons to take care of children - discouraged job seekers

a 16 years old or older person is counted as employed if an of the following applies

- works full-time or part-time - works at a temporary job - has a job but is one vacation, ill, on maternity leave, on strike, etc. - is an unpaid family worker working at least 15 hours per week

if there are 1,600 people in the population; and 200 are unemployed, what is the unemployment rate a. 12.5% b. 15.4% c. 11.5% d. 9.4%

15.4% unemployment rate = unemployed/(employed+unemployed)= unemployment/labor force 200/(1100+200) = 200/1300 = 15.4%

if the consumer price index (CPI) was 80 in 2017, 90 in 2018, 100 in 2019, and 110 in 2020, then the base year must be a. 2017 b. 2018 c. 2019 d. 2020

2019

if frictional unemployment is 3%, structural unemployment is 4%, and cyclical unemployment is 4%, the natural rate of unemployment is a. 2% b. 9% c. 7% d. 5%

7% natural rate of unemployment = frictional unemployment + structural unemployment

a toyota avalon assembled in the united states will count as what (GDP or GNP

GDP

an unemployed person 16 years or older, who does not have a job but has been ___________ seeking work in the past _______ weeks

actively, seeking

the period in the business cycle from a peak down to a trough during which output and employment fall

contraction, recession, or slump

____________ unemployment is the result of changes in the business cycle a. cyclical b. frictional c. part-time d. structural

cyclical

is caused by fluctuations in the business cycle (e.g., recessions)

cyclical unemployment

a prolonged and deep recession

depression

the period in the business cycle from a trough up to a peak during which output and employment grow

expansion or boom

results from workers who voluntarily quit to search for a better position (usually short-term)

frictional unemployment

expenditures by federal, state, and local governments for final goods and services

government consumption and gross investment

the total market value of all final goods and services produced in a country in a given year

gross domestic product (GDP)

the market value of all goods and services produced domestically and abroad using resources supplied by a country's citizens

gross national product (GNP)

the labor force is the total number of those employed and unemployed

labor force = employed + unemployed

two consecutive quarters of decline

recession

what phase of the business cycle does the headline "consumer confidence at highest level in three years" suggest? a. trough b. peak c. recovery d. recession

recovery

which of the following transactions should not be included in the calculation of GDP? a. sharon receives $100 in food stamp b. anna purchases a new television set c. martin purchases an airline ticket for 1,500 just before a big reduction in fares d. susan pays an investment advisor $100 consulting fee

sharon receives $100 in food stamp

is caused by changes in structure of economy, consumer demand or technology (usually lasts longer)

structural unemployment

a one-way payment to a person or organization which has given or exchanged no goods or services for it

transfer payment

generally used to describe government payments to individuals through social programs such as welfare, student grants, and even social security

transfer payment