Econ 2105 Test 2
Real GDP; the price level
A decrease in aggregate demand causes a decrease in _____ only in the short run, but causes a decrease in _____ in both the short run and the long run.
Frictionally unemployed
A student who just graduated from college but has not found a job would most likely be
14 years
According to "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?
Price level; the real value of household wealth
According to the "wealth effect," when the ____ falls, the ___ rises.
Real GDP; the price level
An increase in aggregate demand causes an increase in _____ only in the short run, but causes an increase in ____ in both the short run and the long run.
Expansion; short run
An increase in aggregate demand results in a(n) _____ in the _____.
Minus personal tax payments
Disposable personal income equals personal income...
The total market value of final goods and services produced in the economy during a period of time
Gross domestic product is calculated by
Greater than
Gross domestic product is generally _____ national income
125
If nominal GDP is $5 trillion and real GDP is $4 trillion, the GDP deflator is
2.9%
If real GDP grows by 3% in 2011, 3.2% in 2012, and 2.5% in 2013, what is the average annual growth rate of real GDP?
is 3.75%
If real GDP in a small country in 2012 is $8 billion and real GDP in the same country in 2013 is $8.3 billion, the growth rate of real GDP between 2012 and 2013
80%
If the number employed is 190 million, the number unemployed is 10 million, and the working age population is 250 million, the the labor force participation rate is
5%
If the number employed is 190 million, the working age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is
Decrease
If the price level rose in three consecutive years from 100 to 120 to 140, then the annual inflation rate over those years would
GDP will be below potential GDP
If the short-run aggregate supply increases by less than the long-run aggregate supply, then, at the short-run equilibrium,
8 years and 9 months
If you invest $10,000 in a bond that earns 8% interest per year, how many years will it take to double your money?
$5 billion
If, in a closed economy, real GDP is $30 billion, consumption is $20 billion, and government purchases are $5 billion, what is total saving in the economy?
Above the market wage, causing labor demand to be less than labor supply
Minimum wage laws cause unemployment because the legal minimum wage is set
Minus the consumption of fixed capital
National income equals gross domestic product...
Not in the labor force
Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as
Inflation rises and GDP falls
Stagflation occurs when
Out of the labor force
The Bureau of Labor Statistics would categorize a retiree who is not working as
Lowers; recession; raises; expansion
The automatic mechanism _____ the price level in the case of _____ and _____ the price level in the case of _____.
Capital stock
The total amount of physical capital available in a country is known as the country's
GNP; GDP
The value of what a U.S. owned McDonald's produces in South Korea is included in the U.S. ______ and South Korean ______
G= $5 trillion T= $5 trillion TR= $1 trillion
Under which of the following circumstances would the government be running a deficit?
$3 trillion
What is investment in a closed economy if you have the following economic data? Y= $10 trillion C= $5 trillion TR= $2 trillion G= $2 trillion
The financial crisis
Which of the following is one reason for the decline in aggregate demand that led to the recession of 2007-2009?
Negative $1 trillion (a deficit of $1 trillion)
Y= $12 trillion C= $8 trillion I= $2 trillion G= $2 trillion TR= $2 trillion T= $3 trillion Based on the information above, what is the level of public saving?
$3 trillion
Y= $12 trillion C= $8 trillion I= $2 trillion G= $2 trillion TR= $2 trillion T= $3 trillion Based on the information above, what is the level of private saving in the economy?