econ 2

Which of the following transactions would not be included in​ GDP?

A. Chris buys a new car.Chris buys a new car. B. Scott buys 100 shares of Microsoft stock.Scott buys 100 shares of Microsoft stock. Your answer is correct.C. Jeanne purchases new computers for her small business.Jeanne purchases new computers for her small business. D. The town of South Bristol builds a school.The town of South Bristol builds a school.

Gross Domestic Product

A. does not include the transfer of​ second-hand goods. B. only includes​ "final" goods and services to avoid double counting. C. does not include transfer payments or financial transactions. D. All of the above.

If nominal GDP​ increases, it is possible that

A. output has increased. B. both prices and output have increased. C. prices have increased. D. any of the above might have happened.

Total income can be viewed as the sum of

A. payments to factor services such as​ land, labor,​ capital, and entrepreneurial activity. B. ​wages, rents,​ interest, and profits. C. the dollar value of output produced since total income and total production are equal. D. All of the above.

The flow of gross domestic product during a given interval must always be equivalent to the flow of gross domestic income within that same period because

A. profit is defined as what is left over from total business receipts after all other costslong dash—​wages, ​rents, interestlong dash—have been paid. B. spending by one group is income to another. C. both domestic product and income are measured in terms of market prices. D. Both​ (a) and​ (b) are correct.

Which of the following is consistent with dynamic tax​ analysis?

An increase in the tax rate will likely cause a decrease in the tax base.

What is the relationship between tax rates and tax​ revenues?

Increasing tax rates will initially increase tax revenues. Eventually an increase in the tax rate will erode the tax base and revenues will decrease.

Which of the following measures will lower the natural rate of​ unemployment?

More high school graduates enter college without looking for employment right away.

Which of the following is the definition of disposable personal income left parenthesis DPI right parenthesisdisposable personal income (DPI)​?

Personal income after personal income taxes have been paid.

Which of the following explains the difference between the average tax rate and the marginal tax​ rate?

The average tax rate uses total income while the marginal tax rate refers to the tax rate of the last dollar earned.

Internet job​ sites, like​ Monster.com, have led potential employees to find jobs via the internet almost instantly. This has caused

a fall in frictional unemployment

Assessing taxes by charging a tax rate equal to a fraction of the market price of each unit purchased is known as

ad valorem taxation

The expenditure approach to tabulating GDP

adds up the total amount spent on newly produced domestic goods and services during the year.

Real GDP is computed by adjusting nominal GDP for

changes in the price leve

The type of unemployment that rises as the economy goes into a recession is called

cyclical

Consider an economy where the natural rate of unemployment is equal to 55​%. If the actual unemployment rate is equal to 77​%, then

cyclical unemployment rate is 22​%

By providing information and reducing the costs of job​ search, the​ Internet's impact on the job market is to reduce

frictional unemployment

The United States Federal government receives most of its tax revenues from

individual income taxes

The income households actually receive before they pay personal income taxes​ is:

personal income

Suppose the federal government replaced the current income tax system with a system that taxed all income at 4040​%, but the first ​$35 comma 00035,000 of income was tax exempt. Such a system would be a​ ________________ tax system.

progressive

The corporate income tax in the United States

results in​ individuals' being doubly taxed on corporate earnings

Sean is a lobsterman comma but lobster fishing is done only in the summer months comma so he doesn't have a job in the winter.Sean is a lobsterman, but lobster fishing is done only in the summer months, so he doesn't have a job in the winter. Which type of unemployment is​ this?

seasonal unemployment

Total income equals the dollar value of total output because

spending by one group represents income to the other group.

A proportional​ tax, or​ flat-rate tax

takes the same percentage of a​ person's taxable income in tax regardless of their level of income.

Which of the following is the most important source of revenue for the federal​ budget?

the federal personal income tax

The fundamental limitation on public expenditures during a specific time interval is expressed by

the government budget constraint.

If real GDP increases in any​ year, we know that

the output of goods and services produced this year has increased.

According to the static tax analysis approach to evaluating how changes in tax rates affect government tax​ collections,

the tax rate will have no effect on the tax base.

Full employment means

there is a level of unemployment consistent with​ "normal" frictions in the labor market.

The economy of Finlandia is at full employment when

there is some unemployment due to friction in the labor​ market, but there is no cyclical unemployment.