MACRO tes 2 review
the consumer price index implicitly assumes that the demand curve for each good and service in the representative market basket is
vertical
if an economy experiences deflation, the real interest rate
will be greater than the nominal interest rate
consider the following data for a simple economy. what is the GDP deflator for 2010 using 2009 as base year?
97.39%
the nominal GDP of the U.S. in 2010 was approximately 14.6 trillion. this means that
all of the above are true
when actual inflation is less than expected inflation
borrowers lose and lenders gain
which of the following would be a consequence of substitution bias in the CPI
businesses would over-compensate employees for inflation when giving the cost of living rises
to calculate GDP by the expenditure method, one must add
consumption spending, investment spending, government spending, and net exports
most of the unemployment the occurred during the Great Depression was
cyclical unemployment
a country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where
GDP is much larger than GNP
Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological change
TRUE
Nominal GDP will increase if either the price level or the quantity of goods and services produced rises
TRUE
To examine how the total production of an economy has changed over time, it would be better to examine real GDP
TRUE
the GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average, the cost of goods and services is 5% higher in year 2 than in year 1
TRUE
which of the following policies would reduce structural unemployment
a job retraining program
the natural rate of unemployment is the amount of unemployment
equal to frictional plus structural unemployment
if nominal GDP exceeds real GDP for a specific year, then the GDP deflator must be
greater than 100
Gross domestic product understates the total production of final goods and services because of the omission of
household production
a sharp increase in the divorce rate increases the number of lawyers hired to determine divorce settlements. This will
increase GDP and decrease well-being in the economy
in the united states since the mid-1980s, consumption as a percentage of GDP has
increased
during a business, cycle expansion, total production_________ and total employment ________
increases, increases
the resources lost for dealing with inflation
is called shoe leather cost
which of the following is true about the consumer price index
it assumes that consumers purchase the same amount of each product in the market basket each month
The labor force participation rate equals the
labor force divided by working-age population * 100
human capital refers to which of the following
the accumulated knowledge and skills workers acquire from education and training or from their life experiences
potential GDP refers to
the level of GDP attained when al firms are producing at capacity
which of the following cause the unemployment rate as measured by the Bureau of Labor statistics to overstate the true extent of joblessness
unemployed persons falsely report themselves to be actively looking for a job
suppose that the labor movement has a revival in the United States and the majority of workers join labor unions. as a result we would expect
unemployment rate to rise
consider the data above (in billions of dollars) for an economy: GDP for this economy equals
$1,600
assume the market basket for the CPI has three products: cokes, hamburgers, and CDs with the following values in 2006 and 2011 for price and quantity: The consumer price index for 2011 equals
121
Using the table above, what is the approximate average annual growth rate from 2008 to 2011
2%
consider the following values of the consumer price index for 96, 97, and '98. the inflation rate for 1997 was equal to
2.5 %
Consider the following data on nominal GDP and real GDP, the inflation rate in 2010
2.807
suppose the working age population of a fictional economy falls into following categories....90 retired or homemakers, 60 full time, 20 part time, 20 no employment...the official unemployment rate as calculated by the U.S. Bureau of Labor would equal
20.00%
consider the following data on nominal GDP and real GDP, the base year used in calculating real GDP is
2009
if the growth rate of real GDP rises from 3 to 4 % per year, then the number of years required to double real GDP will decrease from
23.3 years to 17.5 years
imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest. If the inflation rate was 7%, what was the real interest rate you paid?
3 %
if real GDP in a small country in 2010 is $8 billion and real GDP in the same country is 8.3 billion, the growth rate of real GDP between 2010 and 2011 is
3.75%
in 2011, Kendall Ford, and automobile dealership spent $20,000 on a new car lift for its repair shop, $2,000 on a new copy mating, and $600,000 on Ford Motor company stock. Unsold cars and trucks were valued at 400,000 on January 1, 2011 and unsold cars and trucks were value at 900,000. what is Kendall Ford's total investment spending in 2011
522,000
Eliminating frictional unemployment would be good for the economy
FALSE
The inflation rate measures the average prices of goods and services in the economy
FALSE
efficiency wage is another name for the minimum wage
FALSE
for developed countries like the US, GDP will always exceed GNP
FALSE
residential investment includes spending by firms on office buildings
FALSE
the nominal interest rate, plus the inflation rate equals the real interest rate
FALSE
The Bureau of Labor Statistics would category a retiree who is not working as
out of the labor force
a good measure of the standard of living is
real GDP per capita
you earned 30,000 in 1990 and your salary rose to 80,000 in 2011. if the CPI rose from 82 to 202 between 1990 and 2011 which of the following is true
the purchasing power of your salary increased between 1900 and 2011
frictional unemployment is the result of
the search process of matching workers with jobs
gross domestic product is calculated by summing up
the total market value of final goods and services produced in the economy during a period of time
suppose in 2012 you purchased a house built in 2003, which of the following would be included in the gross domestic product for 2012
the value of the services of the real estate agent