Chapter 6 quiz, Chapter 5 quiz, Chapter 4 Quiz

Total unemployment is 5%. Frictional unemployment is 2.3% and the economy is at full employment. What is structural unemployment? Round to 1 decimal place and no percent sign needed.

2.7

How high did unemployment reach in the Great Depression? 5% 10% 25% 45%

25%

Use the table below to answer the question that follows. (the price index in 2002 above should be 200 and not 250) "Nominal" GDP in 2001 was ______ . $10 $20 $40 $50

40

The top 1% of American income-earners pay approximately ____ of all federal income taxes. 1% 10% 20% 40%

40%

Spending on a public good such as national defense ___________ increase with the birth of a new baby. does greatly does slightly does not night or might not

does not

Many factors determine an individual's income, but the most important factor(s) seems to be _______________. race age inheritance education, skills, and knowledge

education, skills, and knowledge

Inflation is an increase in the ___________ price level. core general nominal none of these choices are correct

general

______ is the amount of all investments added to an economy and includes both replacing what was depreciated (used up) and all new investment in the economy. net private domestic investment gross private domestic investment gross domestic product none of these choices are correct

gross private domestic investment

Which of the following may contribute to cost-push inflation? Multiple answers possible. higher minimum wage laws increasing resource costs wage-price spiral monopoly power

higher minimum wage laws increasing resource costs wage-price spiral monopoly power

A ____________ externality exists when third parties are benefited by a transaction that they did not directly undertake. negative neutral positive marginal

positive

_____________ taxation is present when marginal (additional) tax rates increase with additional income. progressive regressive proportional marginal

progressive

Total unemployment is 5%. Frictional unemployment is 2.3% and the economy is at full employment. What is cyclical unemployment? Round to 1 decimal place and no percent sign needed.

0

The labor force is 300 million, there are 270 million employed people. 20 million have stopped looking for work. All of these people are working-age non-institutionalized adults. What is the unemployment rate? No percent sign needed.

10

If the "current" year and the "base" year are the same year, the price index will equal ____.

100

The US implemented a federal income tax in ___. 1776 1836 1913 1944

1913

Check all of the following that are true. Some of the things Congress and the President need to consider when changing tax rates are inflation, automation, and "fairness" The Smoot-Hawley Tariff Act raised import tax rates during the Great Depression but led to lower revenue from those tariffs The government generates zero tax revenue at both the zero percent tax rate and the 100 percent tax rate, as shown in the Laffer curve A certain level of taxes is necessary, but raising tax rates retards economic growth

A certain level of taxes is necessary, but raising tax rates retards economic growth The government generates zero tax revenue at both the zero percent tax rate and the 100 percent tax rate, as shown in the Laffer curve The Smoot-Hawley Tariff Act raised import tax rates during the Great Depression but led to lower revenue from those tariffs

Check all of the following that are true. A dependable legal system provides for official deeds of property ownership and allows property owners to have confidence that their land cannot be confiscated arbitrarily Countries with rampant corruption have a high barrier to prosperity In general, governments that are most responsive to their citizens tend to be the most honest, while dictatorships and autocracies are prone to corruption because they are not accountable to the populace the correlation between economic freedom and prosperity is strong and negative

A dependable legal system provides for official deeds of property ownership and allows property owners to have confidence that their land cannot be confiscated arbitrarily Countries with rampant corruption have a high barrier to prosperity In general, governments that are most responsive to their citizens tend to be the most honest, while dictatorships and autocracies are prone to corruption because they are not accountable to the populace

If the externality is __________ it is a third-party _________. A) Positive; benefit B) Negative; cost C) Positive; cost D) Negative; benefit Both options A and B are correct

Both options A and B are correct

Buying Facebook stock contributes to the Investment component of GDP in the formula: GDP = C+I+G+NX. True False

False

The ____ tax rate is the tax rate that applies to the last dollar you earn. average marginal effective optimal

Marginal

A private good is _______ in consumption and _________. Rival; exclusionary Rival; non-exclusionary Non-rival; exclusionary Non-rival; non-exclusionary

Rival; exclusionary

_______ is the extra cost incurred by an employer if they choose to pay one worker more than another even though they have the same qualifications. None of these choices are correct Sexism or racism Unfair discrimination The cost of discrimination

The cost of discrimination

Check all of the following that are true. The national debt as a percentage of GDP is a more accurate way of conceiving of the debt than in absolute (raw dollar) terms Although the national debt has decreased substantially since the last surplus years of 1998 through 2001, the economy has also grown over that period Defense spending was more than 90 percent of federal spending during WWII but has fallen to just around 16 percent in recent years The largest tax most Americans pay is the federal income tax The 4th Amendment allowed the U.S. government to be able to tax incomes for the first time

The national debt as a percentage of GDP is a more accurate way of conceiving of the debt than in absolute (raw dollar) terms Although the national debt has decreased substantially since the last surplus years of 1998 through 2001, the economy has also grown over that period The largest tax most Americans pay is the federal income tax

Check all of the following that are true. The highest one percent of income earners in the U.S. (who made an annual income of at least $421,000 in 2016) paid more than 37 percent of the all the taxes paid in the country for that year The bottom half (50 percent) of income-earners paid a combined total of just 3 percent of all the taxes paid in 2016 The income tax share paid by the top 10 percent of income earners has decreased from roughly 55 percent in 1986 to just 20 percent in 2016 From 1986 to 2016, the share of income taxes paid by the bottom 90 percent has decreased to 30.5 percent and the share paid by the bottom half of earners has decreased to just 3 percent

The highest one percent of income earners in the U.S. (who made an annual income of at least $421,000 in 2016) paid more than 37 percent of the all the taxes paid in the country for that year The bottom half (50 percent) of income-earners paid a combined total of just 3 percent of all the taxes paid in 2016 From 1986 to 2016, the share of income taxes paid by the bottom 90 percent has decreased to 30.5 percent and the share paid by the bottom half of earners has decreased to just 3 percent

Check each of the following that are true. Workers with professional degrees earn more than those with doctorate degrees. Married couples earn the most, and single male householders earn more than single female householders. Suburbanites earn more than those in the inner cities, while those in rural areas earn the least. Income increases with age, until after age 55, as more individuals begin to retire. Native born persons earn more than foreign born, but naturalized citizens earn the most. Whites earn the highest income in America Those in the west and northeast earn the least, while southerners earn the most.

Those in the west and northeast earn the least, while southerners earn the most. Married couples earn the most, and single male householders earn more than single female householders. Workers with professional degrees earn more than those with doctorate degrees. Native born persons earn more than foreign born, but naturalized citizens earn the most. (maybe?) Income increases with age, until after age 55, as more individuals begin to retire. (maybe?)

Lowering tax rates can sometimes lead to an increase in tax revenue. True False

True

One of the biggest problems with an "equal pay for equal work" law is that it is very tough to determine if two workers are actually doing "equal" work because, although they may have do similar tasks, the quality of their work can be quite different. True False

True

A(n) _________ tax rate is the amount of taxes divided by the amount of income. marginal proportional average none of these choices are correct

average

The sum of ___________ earned at each stage in the production process results in the final price of the product. profits interest incomes none of these choices are correct

incomes

Assume in 2016 that your income was $50,000 and in 2017 your nominal income increased to $70,000. If the CPI changed from 100 to 110, then your real (purchasing power) income _______________? increased stayed constant decreased

increased

_____ are the two major causes of economic instability. Hot dogs and hamburgers real and nominal inflation inflation and unemployment death ans disease

inflation and unemployment

Currently, the labor force participation rate: is the highest it has been since the late 1970's has been consistent since the late 1970's is the highest it has been since the late 1930's is the lowest it has been since the late 1970's

is the lowest it has been since the late 1970's

Why can the unemployment rate be misleading? the government workers at the BLS cannot add it doesn't account for disabled kids not working it doesn't account for discouraged workers and underemployed people it's not calculated by Steven Manley. Therefore, it is probably inaccurate.

it doesn't account for discouraged workers and underemployed people

Which of the following are NOT counted in GDP? (May include multiple answers) Products that were produced but remain unsold resold products illegal goods and services inferior quality products intermediate goods unreported income financial products

resold products illegal goods and services intermediate goods unreported income financial products

Which of the following does not count in the unemployment rate? frictional unemployment structural unemployment cyclical unemployment seasonal unemploymen

seasonal unemployment

What was the big problem during the recessions in the mid 1970s and early 1980s? too much oil supply Ron Burgandy stagflation high inflation

stagflation

The only way for a less-qualified person to out-compete a person with more skills for a job is ______. to hope that an "Equal Pay" Law goes into effect. none of these choices are correct. to have a higher minimum wage to be passed. to offer to work for less money

to offer to work for less money

Business Cycles can be divided between the peaks, the maximum points of economic activity, and the ________, the lowest points of business activity. recovery contraction trough none of these choices are correct

trough

Not getting paid "enough" money is not the main problem low-income workers face, but a symptom of their problem - that they are not producing enough products because they lack the requisite skills. True False

true

Pure competition is when the market consists of a ___________ producers and consumers such as in agriculture. very large number of small number of marginal number of none of these choices are correct

very large number of

What is the average tax rate for 2014 for $65,000 of taxable income for a single person? Round to 2 decimal places and NO % sign needed. Bracket Rate $0 - $9,075 10% $9,075 - $36,900 15% $36,900 - $89,350 25% $89,350 - $186,350 28%

18.62

Using the table below, answer the question that follows the table: Income Tax $10,000 $1,000 20,000 4,000 30,000 10,000 The "marginal tax rate" in going from $20,000 to $30,000 of income is _________. 10% 20% 30% 60%

60%

The labor force is 300 million, there are 270 million employed people. 20 million have stopped looking for work.The population consists of working-age non-institutionalized adults. What is the labor force participation rate? Round to 2 decimal places and no percent sign needed.

93.75

Check all of the following that are true. Since slavery was ruled unconstitutional via the 13th Amendment in 1865, the funds needed for these reparations would necessarily come from individuals who have never owned slaves themselves and would go to individuals who have never personally been slaves. Affirmative action policies in admissions and hiring criteria - whether racial quotas or racial preferences - treat people differently based on skin color The "soft bigotry of low expectations" occurs when certain groups of people are told, in effect, they cannot succeed without a lowering of standards or a redistribution of wealth because they are victims of past injustices Reparations are financial compensation for descendants of slave owners

Affirmative action policies in admissions and hiring criteria - whether racial quotas or racial preferences - treat people differently based on skin color The "soft bigotry of low expectations" occurs when certain groups of people are told, in effect, they cannot succeed without a lowering of standards or a redistribution of wealth because they are victims of past injustices Since slavery was ruled unconstitutional via the 13th Amendment in 1865, the funds needed for these reparations would necessarily come from individuals who have never owned slaves themselves and would go to individuals who have never personally been slaves.

Check each of the following that are true. Asians have the lowest illegitimacy rates, that is, children born to unmarried parents In 2008, Barack Obama explained the devastating effects of fatherlessness by noting that "children who grow up without a father are five times more likely to live in poverty and commit crime; nine times more likely to drop out of schools and 20 times more likely to end up in prison." FDR interned Hispanics during WWII, the only time U.S. citizens have ever been interned by their own government Unfortunately, unmarried birth rates skyrocketed for all racial groups in the decades following LBJ's Great Society and War on Poverty Asians have significantly higher educational attainment than other racial groups, while Hispanics have the least. Whites have the highest illegitimacy rates, now surpassing 70 percent, with one-parent households led by single mothers 91 percent of the time.

Asians have the lowest illegitimacy rates, that is, children born to unmarried parents In 2008, Barack Obama explained the devastating effects of fatherlessness by noting that "children who grow up without a father are five times more likely to live in poverty and commit crime; nine times more likely to drop out of schools and 20 times more likely to end up in prison." Unfortunately, unmarried birth rates skyrocketed for all racial groups in the decades following LBJ's Great Society and War on Poverty Asians have significantly higher educational attainment than other racial groups, while Hispanics have the least.

In the Private Sector, there are many choices to be made by Business managers regarding which "projects" to borrow for and which "projects" to invest in. These choices often contain a great deal of ______________________ as well as the potential for benefits (profits). Risk (the possibility of costs being more than originally perceived) Uncertainty (the possibility of benefits being less than originally perceived) Both risk and uncertainty None of these choices are correct

Both risk and uncertainty

Check all of the following that are true. Nations that provide their citizens the most economic freedom (strongest rule of law, limited government, efficient regulation, and open markets) are the least prosperous Nations that repress their citizens tend to have some of the worst living conditions in the world The Korean peninsula provides a useful natural experiment in which the effects of differing economic philosophies are stark Economically repressed North Korea had a GDP per capita (PPP) of $1,700 and a -1.1 percent GDP growth rate as of 2015, while South Korea and its much freer economy had a 2017 GDP per capita (PPP) of $39,400 and economic growth of three percent

Economically repressed North Korea had a GDP per capita (PPP) of $1,700 and a -1.1 percent GDP growth rate as of 2015, while South Korea and its much freer economy had a 2017 GDP per capita (PPP) of $39,400 and economic growth of three percent Nations that repress their citizens tend to have some of the worst living conditions in the world The Korean peninsula provides a useful natural experiment in which the effects of differing economic philosophies are stark

Some of the most important income determinants include ___. (check all that apply) age education/skills race/gender motivations, work ethic, quality of work location color shirt they wear most often difficulty of job availability to work "on-call" career field

Education/Skills Career Field Location Motivations, work ethic, quality of work Difficulty of job Availability to work "on-call"

GDP accounts for the aggregate of all goods and services produced by Americans regardless of location. True False

False

If savers anticipate an inflation rate of 5 percent and require a real return of 5 percent, then savers will require an interest rates of 5 percent to be paid on their deposits. True False

False

The GNP accounts for the aggregate of all goods and services produced by Americans in the U.S. True False

False

The relationship between tax rates and tax revenue can be shown through the marginal productivity curve. True False

False

Check each of the following that are true. Asians - along with smaller minority groups like Jews, Mormons, and the Amish - have achieved stunning prosperity in America by getting married and staying married, along with attaining higher education Policies, commonly called affirmative action, encourage the admissions and hiring of ethnic minority groups to "level the playing field" and create more equal outcomes If individuals graduate from high school, have a steady job, avoid having children before marriage, and do not become incarcerated, they have an extremely small chance of living in poverty In addition to these basics, getting married and staying married, along with attaining higher education, are some of the characteristics that lead to prosperity Affirmative action policies tend to give an advantage to white and Asian students and job applicants

If individuals graduate from high school, have a steady job, avoid having children before marriage, and do not become incarcerated, they have an extremely small chance of living in poverty Policies, commonly called affirmative action, encourage the admissions and hiring of ethnic minority groups to "level the playing field" and create more equal outcomes In addition to these basics, getting married and staying married, along with attaining higher education, are some of the characteristics that lead to prosperity Asians - along with smaller minority groups like Jews, Mormons, and the Amish - have achieved stunning prosperity in America by getting married and staying married, along with attaining higher education

The establishment of a legal system, according to the Preamble to the Constitution, comes first in the sequence because law and order is necessary not only for a prosperous economy but also for a fully functioning society Liberty, which necessarily includes economic freedom that is characteristic of socialism, relates to the ability of citizens to engage in voluntary agreements largely free from government restrictions The Constitution and the founding of the Republic took place at a time when the liberty-minded ideas of John Locke and Adam Smith were popular, and many believe the largely hands-off approach the government took with respect to the economy is what allowed the United States to become the wealthiest nation in the history of the world The general welfare clause is generally agreed upon to relate to the economy, but the government is required to only "promote" the general welfare rather than to "provide" for it as is necessary for national defense

The establishment of a legal system, according to the Preamble to the Constitution, comes first in the sequence because law and order is necessary not only for a prosperous economy but also for a fully functioning society The Constitution and the founding of the Republic took place at a time when the liberty-minded ideas of John Locke and Adam Smith were popular, and many believe the largely hands-off approach the government took with respect to the economy is what allowed the United States to become the wealthiest nation in the history of the world The general welfare clause is generally agreed upon to relate to the economy, but the government is required to only "promote" the general welfare rather than to "provide" for it as is necessary for national defense

Only women would ever be hired if it were true that sexist businesses could get away with paying women less even though they were equally qualified. True False

True

People in the labor force without jobs who have not made active efforts to find a job during the month before the survey are considered to be not in the labor force, but not officially unemployed. True False

True

Since low-skilled Americans are already the lowest-paid workers, their economic prospects are hurt the most by low-skilled immigration. True False

True

The lowest 50% of income-earners in America are responsible for paying 3% of all federal income taxes. True False

True

When the economy is nearing capacity and resources are in high demand, they move from one job to another paying more. But higher output may not be attained — only higher product prices. True False

True

Government regulation of production in a polluting industry: Will have no affect on the amount of pollution Will increase the market price of the product being produced Will increase the market quantity of the product being produced None of the above

Will increase the market price of the product being produced

The effects of inflation may include which of the following? Multiple answers possible. a redistribution of wealth and income borrowers gaining at the expense of lenders lower incentives to save lower purchasing power

a redistribution of wealth and income borrowers gaining at the expense of lenders lower incentives to save lower purchasing power

The ______ is the combined frictional and structural unemployment rates. total real nominal natural rate of

natural rate of

In the video from class, who cut taxes and said that lowering tax rates could eventually increase revenue? Ronald Reagan George W Bush Barack Obama none of the above

none of the above

The most important determinant of income is usually ____. race gender minimum wage none of the above

none of the above

A good example of a negative externality is _________. elementary school rain pollution an inoculation program

pollution

Check all of the following that are true. The initial highest federal income tax rate was seven percent but quickly increased to over 70 percent within a few years and maxed out at 94 percent in 1944 during WWII The Tax Cuts and Jobs Act of 2017 signed by President Trump lowered marginal tax rates across the board, increased the standard deduction, lowered the corporate tax rate from 35 percent to 21 percent, and ended the Obamacare mandate tax The federal income began in 1776 Federal income tax rates were reduced during the administrations of Presidents Coolidge, Kennedy, Reagan, George W. Bush, and Trump

the initial highest federal income tax rate was seven percent but quickly increased to over 70 percent within a few years and maxed out at 94 percent in 1944 during WWII The Tax Cuts and Jobs Act of 2017 signed by President Trump lowered marginal tax rates across the board, increased the standard deduction, lowered the corporate tax rate from 35 percent to 21 percent, and ended the Obamacare mandate tax Federal income tax rates were reduced during the administrations of Presidents Coolidge, Kennedy, Reagan, George W. Bush, and Trump

The National Income figure is reduced by that amount that people earn through business ownership, but do not actually receive because it is retained as ___________ to be re-invested in the business. consumption of fixed capital gross private domestic investment net private domestic investment undistributed corporate profits

undistributed corporate profits