macro 21-25

Gross Domestic Product is defined as:

consumer spending + government purchases + investment spending + exports - imports.

All of the following create structural unemployment EXCEPT:

granting Social Security benefits to laid-off workers.

A recession leads to all of the following EXCEPT:

higher employment

Economic aggregates are:

measures that summarize data across markets.

Which of the following is considered to be the two types of stabilization policies?

monetary and fiscal policy

In general, for the U. S. economy, the relationship between unemployment and economic growth is:

negative

The actual numerical measure of aggregate output typically used by economists is called:

real gross domestic product

Periods in which output and employment are falling are known as:

recessions

Cyclical unemployment:

rises during recession.

The most painful consequence of a recession is:

rising unemployment

If stabilization policy has been successful over a period of time, it is likely that the economy has not seen:

sever recessions

The rate of unemployment that exists when the economy is at full employment is:

the natural rate of unemployment

The unemployment rate is:

the percent of the labor force that is unemployed

Cyclical unemployment is characterized as:

the deviation in the actual rate of unemployment away from the natural rate

Macroeconomics focuses on:

the economy as a whole

Which of the following is likely to result in pushing the natural rate of unemployment upward?

the entrance of large numbers of women into the work force

Real GDP is nominal GDP adjusted for:

changes in prices

Consider an economy that only produces two goods: DVDs and DVD players. If 10 DVDs are sold at $20 each and 5 DVD players are sold at $100 each, then nominal GDP is:

$700

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

10%

If the labor force totals 100 million workers and 90 million are actively working, then the unemployment rate is ________.

10%

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is:

150 million

Assume that the real GDP of the U.S. is approximately $12 trillion and the population of the United States is approximately 300 million. What is per capita real GDP?

40,000

If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, then the natural rate of unemployment is:

5%

The short-run alternation between economic downturns, recessions, and economic upturns and expansions is known as the:

business cycle

Inflation is when there is:

a rising aggregate price level

Efficiency wages are wages that are:

above equilibrium to encourage better performance

A price index:

always includes a base year. measures the cost of purchasing a market basket of output across different years. is normalized to 100 for the base year.

If during a period of several months we observe the economy to be simultaneously increasing its level of output and employment, we could assume that the economy is in:

an expansion

Unit-of-account costs of inflation are the:

costs associated with money being a less reliable unit of measurement

Economists frequently use GDP per capita to better reflect:

differences in living standards across countries.

The official unemployment rate ignores:

discouraged workers who have given up looking for a job.

Goods that are produced domestically but sold abroad are:

exports

A high unemployment rate implies a high level of GDP.

false

Counted among the unemployed are underemployed who can not find a job working as many hours as they wish.

false

If the United States exports $500 of goods and services and imports $700 of goods and services, net exports are $1200.

false

Unemployment that is due to the time workers spend in job search is considered:

frictional unemployment.

Unemployment that occurs because it takes workers and employees time to find each other is called:

frictional unemployment.

The reason the dollar value of only final goods and services are counted in GDP is that:

if we counted the value of all goods we would count inputs, like the value of steel in a new automobile, more than once.

Shoe-leather costs refer to the costs of:

increased number of transactions as inflation increases.

Real gross domestic product or real GDP:

is aggregate output. is the total production of final goods and services. grows during an expansion.

Firms pay efficiency wages because:

it reduces the risk of losing the best workers.

In calculating the unemployment rate, discouraged workers are:

not included in the labor force

To be classified as unemployed, a person must be:

not working and actively looking for a job in the last four weeks.

An expansion is a period in which:

output rises

With regard to the aggregate price level, economists generally believe:

price stability is a desirable goal

Investment spending represents spending on:

productive physical capital

The widely held view that the government should take an active role in the macroeconomy dates back to:

the Great Depression.

The topics studied in macroeconomics include:

the average price level in the economy.

Fiscal policy refers to:

the control of government spending and taxations.

The official unemployment rate reported by the government may tend to understate the amount of unemployment by:

the presence of discouraged workers who are not actively seeking employment.

The labor force is equal to the:

the sum of employment and unemployment

Gross domestic product or GDP is:

the total dollar value of final goods and services produced in the economy in a given time period.

Employment is:

the total number of people actively working.

The labor force is:

the total of people employed and unemployed

Discouraged workers are non-working people who want to work but are not actively looking for a job.

true

Expansions are periods of economic growth when real GDP and employment are growing.

true

Final goods and services are sold to the final or end user.

true

Recessions are periods in which output and employment are falling.

true

Stabilization policy is policy undertaken to reduce the severity of recessions.

true

The inflation rate is measured as the percentage change per year in a price index.

true

The largest spending category in GDP is consumption.

true

During a recession:

unemployment increases and the growth rate of real GDP decreases

The percentage of the labor force who are unemployed is the:

unemployment rate

Structural unemployment is:

unemployment that results when there are more people seeking jobs than there are jobs available at the current wage rate.

The Human Development Index is:

used by the U.N. to compare nations by measures other than real GDP per capita.

Discouraged workers are those individuals:

who have given up looking for a job.