Econ 201 test 2 review

Which person can be categorized as a discourage worker?

A. Andy Friese was formerly employed at Mama's used cars. He has not worked there for 6 months and has given up on looking for work

Someone who recently moved to Florida because of its warmer climate will need to spend some time looking for a new job. This is an example of:

A. Frictional unemployment

A binding and effective interest rate ceiling creates ___ loanable funds

A. a shortage of

Which of the statements is the best description of a business cycle?

A. alternating periods of increasing and decreasing economic output

Suppose that Congress decided to exempt seniors from paying income tax on labor income. What would happen to the labor force participation rate of seniors?

A. it would increase

Laws that make it more difficult (and more expensive) to fire workers:

A. lead to higher rates of long term unemployment

Many people say that if people save more, that is bad for the economy. They say that spending money on consumer goods keeps the money moving through the economy. Does the Solow model say that?

A. no; higher savings rate is good for the economy

Consider a hypothetical model for the loanable funds market. Suppose that the government decides to reduce the federal goods and services tax(GST). How does this tax reduction impact investment and why? The tax reduction:

A. reduces investment bc lowering the GST reduces savings

When workers lose their jobs and become officially unemployed, the number of people in the labor force:

A. remains constant

Which of the situations is an example of the crowding-out effect on investment as it pertains to macroeconomics?

B. Jack want to borrow money to create a cowboy-themed inflatable counce house for kids called "Wild West" However the government is running a deficit which has increased interest rates so much that jack can no longer afford to borrow the money.

The source of the _______ for loanable funds is investment.

B. demand

A business that pays for its workers to attend a technical college is increasing its:

B. human capital

If two countries have the same steady state levels of output, the country that _____ today will ______ in per capita output

B. poorer; catch up

Minimum wage laws and unions tend to:

B. raise wages and increase unemployment

For most of recorded history, economic growth has been:

B. virtually nonexistent

Which of the following is NOT an example of the need to borrow a fiance large investments?

C. Jamie pays for college by working 2 jobs on the weekends

Akemi, who is Japanese citizen, works in the united states as a computer programmer. The value of her output is included in:

C. US GDP and Japan' GNP

The labor forces consist of:

C. employed workers and adults who do not have jobs but who are looking for work

According to the Solow model, which of these would not increase economic output in a developing nation?

C. increasing their government ownership of agricultural land

A rural village in a developing country has an economy based on agriculture. Then the government of the country provides the village with newly developed hybrid seeds that more than double the agricultural yield per acre. This story illustrates the growth of per capita GDP in the village through which factor(s) of production?

C. technological knowledge

Which of the following do economist consider an investment?

C. the construction of a new factory

All else equal, which hypothetical scenario exhibits a country with the most economic growth?

C.Froland, a country that resolves most trials and legal issues within a year

Which transaction is not included in gross domestic product?

D. Francis receives her social security check

Which of the following would be considered unemployed?

D. Janice, who graduated from the university in May, is waiting for her new job to starting July

Which of the following is considered unemployed?

D. John, on temporary lay off from work, awaits recall.

Economics is characterized by many statistics and measurements. Suppose that an analyst is interested in comparing the economy of today with the economy ten years ago. Which term is least likely to be useful for this purpose?

D. Nominal GDP

Suppose the the country of Altaria only produces 1 style of good, pink tutu. Last year, nominal GDP was $50000 and this it is $200,000. What can be concluded?

D. None of the statements are necessarily true

Suppose a doctor spends 1/2 of the year in the united states and the other half in canada and works in both places. How does his production get allocated between the US and Canada?

D. The value of the services provided in the US gets counted in US GDP and the value of the services produced in canada gets counted in canadian GDP

Consider an economy that is operating at its steady state. An increase in the investment rate in this economy will lead to:

D. an increase in the growth rate of output in the short run but 0 growth in output in the longrun

A set of tires installed on a vehicle in an automobile factory is counted as:

D. an intermediate good and its market price is not part of GDP

If the supply of loanable funds increases and the demand for loabable funds increase at the same time,. interest rates will:

D. increase, decrease, or remain the same

A worker repairing VHS cassette tape players was laid off bc most of his customers have started using DVD players and streaming services. This worker is now:

D. structurally unemployed

If the recent financial crisis raises awareness about the dangers of not saving, leading to an increase in overall savings rates across the country, the loanable funds market will experience an increase in the ______ loanable funds and ______ in equilibrium interest rates.

D. supply of; a decrease