Macroeconomics test 1

National income and product accounts came about in the United States during the 1930's as a result of:

a lack of reliable economic data

When the economy is operating at full employment:

cyclical employment is zero

Simon Kuznets is known for what?

devising the gross national product as a way of measuring the nation's economic output

Government expenditures include _________ and _________, but NOT _______ .

wages and salaries; the purchase of products and services; transfers

formula for Consumer Price Index

(cost in current period /cost in base period) x100

last year, the consumer price index (CPI) was 115 while the consumer price index for this year is 125. What is the rate of inflation?

8.7%

formula for GDP

C + I + G + ( X - M ) consumption expenditure investment government purchase of goods net exports ( exports-imports )

true or false: If inflation is unanticipated, then income may be redistributed from creditors to debtors.

True

formula for % change in price

[(CPI in current year/ CPI in original year) x100]-100

formula for consumer expenditure

autonomous consumption+marginal propensity to consume

If the cost of a typical market basket in 2019 is 400 and the cost of a typical market basket in 2020 is 390, then during this period the economy is undergoing:

deflation

in 1933, congress directed the _______to develop estimates of "total national income for each of the calendar years for 1929, 1930, and 1931..."

department of commerce

Wages set high to discourage employee turnover are called ___________ wages

efficiency

Which of the following is/ are considered employed? population military employed unemployed seeking work unpaid family working 15+ hours a week retired

employed AND unpaid family working 15+ hours a week

true or false: As a measure of inflation, the media gives more attention to the GDP deflator than the consumer price index.

false

Assume you read an article for class concerning the US labor market that reports an increase in entrepreneurial activity. To verify this information, you could refer to the:

household surveys

Hannah is not at work because she broke her leg, but she will return once it is healed. She is:

in the labor force

formula for labor force participation rate

labor force / population

formula for real value

nominal value / (nominal price index/ price index of base year)

Roughly half of the unemployment consists of:

people who lost their job

What factors go into GDP in reference to the Expenditure approach?

personal consumption expenditures gross private domestic investment government purchases net exports of goods and services

what goes into the formula for GDP for the income approach?

proprietors' income, compensation of employees, corporate profits, rental income, net interest

formula for natural rate of unemployment

structural unemployment + frictional unemployment

inventory investment

the difference between goods produced and goods sold

formula for unemployment rate

unemployed / employed+unemployed

Which of the following is/are considered unemployed? population military employed unemployed seeking work unpaid family working 15+ hours a week retired

unemployed seeking work ONLY

What component of GDP includes college tuition?

Services

In the national income and product accounts system, the two main approaches to measuring the size of the economy are:

income and expenditures