Macro test 1

In the above figure the distance between s and t represent

A recession

When a recession and, the turning point that immediately follows is

Trough

Using the rule of 70, if China's current growth rate of real GDP per person with 7% a year how long will it take the countries real GDP per person to doubleUsing the rule of 70, if China's current growth rate of real GDP per person with 7% a year how long will it take the countries real GDP per person to double

10 years 70% divided by 10

Suppose a country is producing 20 million of real GDP. If they Konomi grows at 10% per year approximately how many years will it take for real GDP to grow to 80 million

14 years 70% divided by 10 equals 7×2 = 14

If real GDP per person is growing at 4% per year approximately how many years will it take to double

17.5. 70% divided by four

If the CPI basket of goods cost 200 and the reference base. And 450 in a later year, the CPI in the later years equals

225. CPI = ( Current year cost / Base year cost ) * 100 CPI in the later year = (450 /200) * 100

If the CPI was 132.5 at the end of last year and 140.2 at the end of this year, the inflation rate over these two years was

5.8% Inflation rate of current year minus inflation rate of previous year divided by inflation rate of previous year times 100

When calculating GDP, underground economic activity is

A part of the economy purposely hidden. It is not the production of goods and services in the home

Which of the following is not considered to be in the labor force

A person who is not working and who has not tried to find a job.

Using the official measure of unemployment which of the following would not be counted as unemployment

A person who performs traditional housework and does not work outside the home for pay. What is counted: a person who is waiting to start a new job in the next 30 days, a person who is not working but who has tried to find a job in the past week, a person who is waiting to be called back to a job after having been laid off

The use of purchasing power parity prices

Accounts for differences in the prices of the same goods in different countries when measuring real GDP

The unemployment rate generally falls during in the business cycle

And expansion

In 2016, of the following which nations have the highest level of real GDP per person

Canada

Mike has just been laid off from his construction job because consumers are not purchasing new homes because of the recession. Mike would be considered to be part of

Cyclical unemployment Cyclical unemploymentis directly related to the macro-economic situation in the economy. It would rise at a time of recession, while reduce when the economy starts recovering

Supposed mailboxes etc Buys a new copier for its store for $1000 a year later when the firm wants to upgrade to a new copier at finds that the old copier is only worth 750 over the year the copier was used blank has occurred

Depreciation

Employment to population ratio

Employed divided by working age population

When economists speak of full employment, they referred to the keys in which the sum of frictional and structural unemployment is

Equal to the actual amount of unemployment

Because of a bank merger Miss Davis lost her position as vice president and had to seek work with other banks. Miss Davis has the skills necessary to find a new job thus she is best considered asBecause of a bank merger Miss Davis lost her position as vice president and had to seek work with other banks. Miss Davis has the skills necessary to find a new job thus she is best considered as

Frictionally unemployment the unemployment which exists in any economy due to people being in the process of moving from one job to another.

Flows

In the figure above flow bee represents household consumption expenditures

Which of the following statements about growth theories is correct

In the new growth theory, knowledge is not subject to diminishing return. What is not correct about the growth theory: in classical growth Siri physical resources are limited, and neo classical grow theory, technologies process is the result of Robert increases in saving and investment in capital per person, and classical grow Siri real GDP per person is unrelated to the subsidence real GDP

Labor productivity increases with

Increase in capital

Including marginally attached workers in the calculation of unemployment rate would

Increase the reported rate marginally attached individuals have looked for work in the last 12 months but not the previous four weeks

An increase in education and training

Increases labor productivity

A Frito-Lay an American style company opens a new manufacturing facility in Mexico and produces snacks which are distributed in South America then Mexico's GDP increases and US GDP does not change

Increases: does not change

During an economic expansion, real GDP _ And unemployment _

Increases: increases

If the saving rate increases, a country's growth rate of real GDP per hour of labor increases and capital per hour of labor increases

Increases: increases

The gap between real GDP per person in Mexico and real GDP per person in the United States has been

Increasing

Which of the following is not a component of the income approach to GDP

Net exports. Not exports are not a component of the incomes approach to GP

Using the data in the table above what is the value of not exports

Not exports equals exports minus imports. In this case it was -1 81 billion

The bias in the CPI typically includes

Over states inflation

In the figure above the letters a BC represent which positions in the business cycle

Peak, recession, and expansion, respectively

Which of the following is used to calculate the standard of living

Real GDP divided by population

The aggregation production function shows how space varies with space

Real GDP: labor

Labor productivity, real GDP per labor hour, increases if

Saving and investment cause an increase in the quantity of capital per worker, there is an increase in the accumulation of human capital, new technologies are continuously discovered

Personal consumption expenditures include all of the following except except spending on

Social Security payments made to elderly. What is a part of it: the purchase of a new home by consumer, general motors purchase of new capital equipment, expenditures by the federal government for national defense

In the above figure, if the real wage is $20 per hour a labor

Surplus will occur and the real wage will fall

Convergence of the income gap has been most dramatic between

Taiwan and the United States

Substitution bias in the CPI refers to the fact that the CPI

Takes no account of the substitution of goods by consumers when relative price change

Which of the following statements regarding US economic growth is not correct

The growth rate of real GDP per person accelerated between 1973 to 1984. What was the correct: the average annual growth rate of real GDP per person in the United States was rapid during World War II, over the past 100 years on the average real GDP per person grew 2% a year, in the 1930s real GDP foul well below its trend

The components of the expenditure approach to measuring GDP include all of the following except

The implicit payments for unpaid household work. Components of expenditure approach include: government expenditure on goods and services, investment, net exports

In China suppose the price level was 102,014, 110 and 2015, and 120 in 2016. Over these three years

The inflation rate was positive

Because the productivity of labor decreases as the quantity of labor employed increases

The quantity of labor a firm demand increases as the real wage rate decreases

The circular flow diagram shows

The total amount of income generated by the economy equals the total purchase of final goods and services

Which of the following statements is correct

higher savings rates can stimulate economic growth. limiting trade does not stimulate economic growth