Macro boii

a decrease

An increase in the price of hamburger would probably result in _____ in the demand for hamburger buns. no change a decrease random fluctuations an increase

percentage change in the consumer price index

Inflation can be measured by the: percentage change in GDP. absolute change in the GDP deflator. absolute change in the consumer price index. percentage change in the consumer price index.

is an increase in the overall level of prices

Inflation: can be thought of as an increase in a nation's standard of living. is a movement of the economy toward economic growth. is a sustained fall in the overall level of prices. is an increase in the overall level of prices.

doing so would result in double counting

Intermediate goods are NOT counted in GDP because: doing so would result in double counting. these goods are produced in the underground economy. these goods are not produced for the market. these goods involve financial transactions.

the government can help a depressed economy via fiscal and monetary policies

Keynesian economics promotes ideas that: the private sector is perfectly capable of regulating itself. the government can help a depressed economy via fiscal and monetary policies. the free market system will always prevail. government intervention can be destabilizing.

supply of; right

7. You notice that the price of Blu-ray players falls and the quantity of Blu-ray players sold increases. You suspect that _____ Blu-ray players shifts to the _____. demand for; left. demand for; right. supply of; left. supply of; right.

the united states has a comparative advantage in wheat and an absolute advantage in wheat

(Table: Wheat and Aluminum) Use Table: Wheat and Aluminum. The United States and Germany can produce both wheat and aluminum. The table shows the maximum annual output combinations of wheat and aluminum that can be produced. Based on the table: The table shown in the image is titled "Wheat and Aluminum." The maximum amount of wheat produced in the U.S. is represented as 100 and 0, while the amount of aluminum produced in the U.S. is 0 and 100. The maximum amount of wheat produced in Germany is represented as 50 and 0, while the amount of aluminum produced in the Germany is 0 and 100. Germany has a comparative advantage in aluminum and an absolute advantage in aluminum. the United States has a comparative advantage in both aluminum and wheat. Germany has an absolute advantage in aluminum and a comparative advantage in wheat. the United States has a comparative advantage in wheat and an absolute advantage in wheat.

an increase in the quantity demanded

A decrease in the price of a good will result in: an increase in supply. an increase in demand. an increase in the quantity demanded. more being supplied.

55

A friend comes up to you and offers you a free ticket to a professional baseball game that night. You decide to attend the game. The game takes five hours and costs you $15 for transportation. If you had not attended the game, you would have worked at your part-time job for $8 an hour. What is the cost to you of attending the game? The cost is zero—the ticket is free. $40 $65 $55

decrease in buyer's incomes

A newspaper story recently reported that the price of new cars, a normal good, has decreased and the quantity of new cars sold has dropped. The new price and quantity could have been caused by a(n): decrease in buyers' incomes. decrease in production costs. increase in production costs. increase in buyers' incomes.

which no services were rendered by the government

A transfer payment is a payment for: transfer of a debt to a different person. which no services were rendered by the government. a military transfer to a war zone. being transferred to a different city by your employer.

when markets don't achieve efficiency, government intervention can improve society's welfare

All children have to be immunized against polio, measles, mumps, and other diseases. If you don't have enough money to pay for the immunizations, they will be provided free at the county health clinic. Which economic principle does this statement BEST represent? When markets don't achieve efficiency, government intervention can improve society's welfare. People usually respond to incentives, exploiting opportunities to make themselves better off. Government policies can change spending. Resources should be used efficiently to achieve society's goals.

not possible to produce more of one good without producing less of another good

An economy is efficient if it is: not possible to produce more of one good without producing less of another good. possible to produce more of all goods and services. possible to produce more of one good without producing less of another. producing a combination of goods

has the lowest cost of producing a particular good, compared with other economies

An economy is said to have a comparative advantage if it: can produce fewer of all goods than another economy. has the lowest cost of producing a particular good, compared with other economies. can produce more of all goods than another economy. has the highest cost of producing a particular good, compared with other economies.

purchase of a freezer by an ice cream parlor

An example of investment spending is the: purchase of a freezer by an ice-cream parlor. purchase of government bonds by a private household. purchase of stock shares by a mutual fund. amount of funds raised by the government in the financial markets.

consume outside of its production possibilities frontier

Because of trade, a country may: find its production possibility frontier shifting outward. consume inside its production possibility frontier. avoid opportunity costs. consume outside its production possibility frontier.

use more public transportation

Because people usually exploit opportunities to make themselves better off, if the price of gasoline rises and stays high for an extended period, we expect people to: increase the number of miles they drive. buy larger and less fuel-efficient cars. ride their bicycles less. use more public transportation.

always include a base year, measure the cost of purchasing a market of output across different years, and is normalized to 100 for the base year

Choose the best answer. A price index: is normalized to 100 for the base year. always includes a base year. always includes a base year, measures the cost of purchasing a market basket of output across different years, and is normalized to 100 for the base year. measures the cost of purchasing a market basket of output across different years.

1300

Consider an economy that produces only DVDs and DVD players. Last year, 10 DVDs were sold at $20 each and 5 DVD players were sold at $100 each, while this year 15 DVDs were sold at $10 each and 10 DVD players were sold at $50 each. Real GDP this year using last year as the base year is: $700. $100. $300 $1,300.

unemployment increases and the growth rate of real GDP decreases

During a recession: unemployment increases and the growth rate of real GDP decreases. unemployment decreases and the growth rate of real GDP increases. unemployment and the growth rate of real GDP both decrease. there is no relation between unemployment and the growth rate of real GDP.

not all resources are equally suited to producing every good

Economists usually assume that production is subject to increasing opportunity costs because: if production is efficient, it is not possible to increase the production of all goods simultaneously. individuals desire constantly increasing opportunities to make themselves better off. higher production usually results in more inflation. not all resources are equally suited to producing every good.

taxes and spending

Fiscal policy attempts to affect the level of overall spending by making changes in: the interest rate. the money supply. taxes and spending. banking regulations.

People usually respond to incentives, exploiting opportunities to make themselves better off

Florida schools offered cash bonuses to students who scored high on the state's standardized exams. The cash bonuses are motivated by which economic principle? Choices are necessary because resources are scarce. "How Much" is a decision at the margin. People usually respond to incentives, exploiting opportunities to make themselves better off. The true cost of something is its opportunity cost.

what you gave up to get it

For an economist, the cost of something is: the quantity of resources used to produce it. always equal to its market value. the amount of money you paid for it. what you gave up to get it.

false

For measuring GDP as spending on domestically produced final goods and services, spending on inputs like steel for manufacturing a car is counted in GDP, but spending on a new factory in which the cars are produced is NOT counted in GDP. True False

true

Frictional and structural unemployment are a part of the natural rate of unemployment. True False

the value of owner-occupied housing

GDP does NOT exclude: the value of housework. the value of leisure. the value of owner-occupied housing. damage to the environment.

final goods and services produced in the economy in a given period

GDP is the total dollar value of all: wages paid to producing workers in a given period. government production in a given period. intermediate goods and services produced in the economy in a given period. final goods and services produced in the economy in a given period.

specialization in production

Gains from trade arise because of: marginal analysis. individual choice. specialization in consumption. specialization in production.

end up in inventory and are included in investment

Goods that are produced in a particular period but NOT sold in that period: end up in inventory and are included in investment. are finally included in depreciation when they are sold. go into inventory and are called consumption. are classified as intermediate goods.

consumer spending + government purchases of goods and services + investment spending + exports - imports

Gross domestic product is defined as: consumer spending + government purchases of goods and services + investment spending + exports - imports. disposable income + taxes + investment spending + exports + imports. consumer spending + government transfers + investment spending + exports - imports. consumer spending + government purchases of goods and services + financial spending + exports - imports

fallen

If real GDP rises while nominal GDP falls, then prices on average have: risen. stayed the same. fallen. decreased and then been offset by an equal increase.

one person's spending is another person's income

I know when I shop at the local grocery store, I am helping my community. Which economic principle does this statement BEST represent? One person's spending is another person's income. There are gains from trade. Overall spending sometimes gets out of line with the economy's productive capacity. People usually respond to incentives, exploiting opportunities to make themselves better off.

there are opportunities for some people to make themselves better off

If a market is in disequilibrium: there are opportunities for some people to make themselves better off. it will continue unless there is government intervention. it must be because the government has intervened in the market, resulting in the market's failure to reach equilibrium. no individual will be better off doing something different.

make some people better off without making others worse off

If an economy has NOT achieved efficiency, there must be ways to: eliminate inequity. increase opportunity costs. make some people better off without making others worse off. increase the incentives for its citizens to follow their own self-interest.

efficient in production but not necessarily in allocation

If an economy is producing at a point on its production possibilities frontier, it is: efficient in production but not necessarily in allocation. efficient in production and allocation. not necessarily efficient in production or allocation. efficient in allocation but not necessarily in production.

true

If coffee and tea are viewed as substitutes in consumption, then an increase in the price of coffee will increase the demand for tea. True False

decrease; increase

If demand is downward sloping, a decrease in supply with no change in demand will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price. decrease; decrease increase; decrease increase; increase decrease; increase

there will be no remaining opportunities for individuals to make themselves better off

If equilibrium exists: the price in that market will not fluctuate by more than 5%. all individuals must have an equal amount of income. the number of buyers will equal the number of sellers. there will be no remaining opportunities for individuals to make themselves better off.

living standards would fall

If every individual were required to be self-sufficient: living standards for some individuals would fall, but for others they would rise. living standards would fall. it's impossible to say how living standards would change. living standards would rise.

complements

If people demand more of product A when the price of B falls, then A and B are: complements. substitutes. not related. inferior goods.

shift to the left in the supply curve for the product this year

If suppliers expect prices for their product to rise next year, then one would expect a: decrease in the quantity demanded this year. shift to the right in the supply curve for the product this year. shift in the demand curve for the product this year. shift to the left in the supply curve for the product this year.

5

If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, then the natural rate of unemployment is: 2%. 5%. 9%. 7%.

75

If the cost of a market basket is $150 in year 1 and $200 in year 2, the price index for year 1 using year 2 as the base is: 75. 133. 150. 100.

11.64

If the price index in year 1 is 146 and in year 2 is 163, the rate of inflation between year 1 and year 2 is: 8.2%. 10.43%. 17.0%. 11.64%.

measured in terms of the best alternative uses for that money

If the state government allocates additional spending on education programs, the opportunity cost is: the dollar amount of the additional spending. measured in terms of the best alternative uses for that money. zero. considered only if taxes have to be raised to fund the spending.

11 billion

If, during 2010, the Republic of Sildavia recorded investment spending of $3 billion, government purchases of $3 billion, consumer spending of $7 billion, imports of $5 billion, government transfers of $1 billion, and exports of $3 billion, Sildavia's GDP in 2010 was: $14 billion. $11 billion. $13 billion. $12 billion.

it shifts his production possibilities frontier out

In Kessy's old kitchen, he could bake 10 cookies or mix 15 glasses of lemonade in one day. Now Kessy has a larger oven and refrigerator. How does this affect his production possibility frontier? He will not be able to produce as much as before. It shifts his production possibility frontier in. It shifts his production possibility frontier out. He will be less efficient.

incentives built into a market economy

In most cases, economic efficiency is achieved through: incentives built into a market economy. individuals seeking out opportunities that involve no risk. reducing regulation. maximizing equity.

is measured by the amount of the other good that must be given up

In movement along a production possibility frontier, the opportunity cost to society of getting more of one good: is measured by the amount of the other good that must be given up. usually decreases. is measured in dollar terms. is always constant.

23.07

In the Republic of Sildavia, a market basket of goods and services cost $130 in 2009, $140 in 2010, and $160 in 2011. Based on this information and considering 2009 as the base year, inflation from 2009 to 2011 was: 14.28%. 7.14%. 7.69%. 23.07%.

123.07

In the Republic of Sildavia, a market basket of goods and services cost $130 in 2009, $140 in 2010, and $160 in 2011. Based on this information and considering 2009 to be the base year, the price index in 2011 was: 130. 123.07. 107.69. 100.

a decrease in the price of tacos

In the market for tacos, the factor that does NOT shift the supply curve to the left is: fewer taco shops. an increase in the wages of taco shop workers. an increase in the price of beef. a decrease in the price of tacos

sustained upward trend in aggregate output per person over several decades

Long-run growth is the: sustained downward trend in the employment rate over several decades. sustained upward trend in aggregate output per person over several decades. expansion phase of business cycles. downturn phase of business cycles.

is used primarily when deciding how much of an activity should be done

Marginal analysis: is used primarily when deciding how much of an activity should be done. does not help when making a "how much" choice. is primarily used when making an either-or choice. refers to decisions about whether or not to engage in a particular activity.

whatever she would have purchased with the $30,000 plus whatever she would have earned had she not been in college

Margo spends $30,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is: whatever she would have earned had she not been in college. whatever she would have purchased with the $30,000 plus whatever she would have earned had she not been in college. $30,000. whatever she would have purchased with the $30,000 instead.

real costs of changing listed prices

Menu costs are the: increase in the transaction costs caused by inflation. costs of money becoming less reliable. adjustments to the cost of living. real costs of changing listed prices.

payments to; increase

Payments to Social Security recipients are indexed to the rate of inflation, as measured by the consumer price index. This means that, when the rate of inflation increases, the _____ Social Security recipients _____. payments to; decrease payments to; increase market basket for; increases market basket for; decreases

changes in prices

Real GDP is nominal GDP adjusted for: imports. changes in prices. double counting. population.

an incomplete measure of a country's standard of living

Real GDP per capita is: used only by the United Nations to compare nations based on measures of welfare. the only way to measure living standards among different countries. an incomplete measure of a country's standard of living. a perfect measure of a country's standard of living.

government policies can change spending

Sometimes the government varies its spending, depending on the needs of the country. Which economic principle does this statement BEST represent? The true cost of something is its opportunity cost. Resources should be used efficiently to achieve society's goals. When markets don't achieve efficiency, government intervention can improve society's welfare. Government policies can change spending.

the exchange of goods and services in markets

Specialization and trade usually lead to: lower living standards. lower economic growth. higher prices. the exchange of goods and services in markets.

the percentage of Indiana residents wit a college degree rises from 25% to 30%

Suppose Indiana produces only steel and corn, with fixed amounts of land, labor, and capital resources. Which scenario BEST sets the stage for economic growth? The unemployment rate in Indiana rises from 5% to 6%. The United States imports more and more low-cost steel from Asian countries. The Midwest has a devastating drought. The percentage of Indiana residents with a college degree rises from 25% to 30%.

it will fall because 2 million people are not in the labor force this month and are not counted as unemployed

Suppose that roughly 8 million people in the United States were actively seeking jobs but had not found them this month, the same number as last month. Suppose that 2 million of the people who were unemployed last month gave up their search this month and stopped looking for work. What will happen to the official unemployment rate this month, all other things unchanged? It will rise because 2 million people are not in the labor force this month and are not counted as unemployed. The unemployment rate will decrease by 25%. It will be unaffected because the same number of people is unemployed. It will fall because 2 million people are not in the labor force this month and are not counted as unemployed.

true

Suppose there is an excess supply of chemical engineers in India. Over time, the salaries for chemical engineers will fall in India. False True

70

The Republic of Livonia has an adult population of 100 million; 60% of Livonia's population is employed, and 10% of the people are unemployed. The labor force participation rate in Livonia is _____%. 70 10 60 7

deflation

The annual percentage change in the aggregate price level is negative when there is: spiraling inflation. disinflation. inflation. deflation.

bridgestone tires purhcased by ford motor co.

The calculation of GDP does NOT include the value of: Michelin tires purchased by Canadian car collectors. Bridgestone tires purchased by Ford Motor Co. Goodyear tires purchased by the United States Secret Service. Firestone tires sold at your local garage.

relative opportunity costs

The concept of comparative advantage is based on: relative opportunity costs. relative labor costs. dollar prices of labor. absolute labor productivity.

changes in the prices of goods and services typically purchased by consumers

The consumer price index reflects: the level of prices for intermediate goods and services purchased by businesses. the level of prices for raw materials. the prices of all goods and services computed from the ratio of nominal GDP to real GDP. changes in the prices of goods and services typically purchased by consumers.

making choices at the margin

The economic way of thinking entails: the analysis of costs but not benefits. making the distinction between microeconomics and macroeconomics. the analysis of benefits but not costs. making choices at the margin.

inward shit of

The effect of a natural disaster can be shown by a(n) _____ the production possibility frontier. inward shift of point inside of outward shift of movement from one point to another along

outward shift of the production possibilities frontier

The effect of an increase in productive inputs such as labor and capital can be shown by a(n): point inside of the production possibility frontier. movement from one point to another along the production possibility frontier. outward shift of the production possibility frontier. inward shift of the production possibility frontier

increases, the quantity demanded will decrease

The law of demand states that, other things equal, as the price: increases, the quantity demanded will decrease. increases, the quantity demanded will increase. decreases, the demand curve will shift to the right. increases, demand will decrease.

supple decreased

The market price of airline flights increased recently. Some economists suggest that the price increased because several airlines went out of business. They believe that, in the market for flights: supply increased. demand increased. demand decreased. supply decreased.

cyclical

The natural level of unemployment contains no_____ unemployment. structural cyclical frictional minority

economic growth

The process observed when an economy's production possibility frontier shifts outward is: comparative advantage. economic growth. specialization. full employment.

prices of inputs will ultimately be reflected in prices of final products

The producer price index is often regarded as a warning sign of inflation because: producers are likely to have monopoly control over prices. prices of inputs will ultimately be reflected in prices of final products. consumers have to pay the prices charged. commodity producers can sell whatever they want at higher prices.

natural rate of unemployment

The sum of frictional and structural unemployment is the: cyclical amount of unemployment. actual unemployment level. natural rate of unemployment. amount of unemployment in an economy during a recession.

business cycle

The switching between recessions and expansions is known as the: long-run economic growth. business cycle. unemployment rate. macroeconomy.

real gdp

The total value of all final goods and services produced in a given year, calculated using the prices of a selected base year, is: real GDP. net exports. consumption spending. nominal GDP.

fall; rise

When an economy is expanding, unemployment tends to _____ and overall prices tend to _____. fall; rise rise; rise fall; fall rise; fall

real GDP

When economists measure economic growth, they often use: real GDP. nominal GDP. the unemployment rate. the inflation rate.

higher than; an increase in structural employment

When labor unions successfully bargain for wage rates that are _____ the equilibrium wage rate, they may cause _____. higher than; an increase in structural unemployment equal to; shortages in that labor market lower than; frictional unemployment higher than; shortages in that labor market

false

When people in Brazil engage in trade with people in Germany, all citizens in both nations are necessarily made better off. False True

true

When the actual rate of unemployment is equal to the natural rate of unemployment, we conclude that there is no cyclical unemployment. True False

drinking another cup of coffee

Which decision is the BEST example of making a choice at the margin? attending college quitting your job buying a new car drinking another cup of coffee

payments by the defense department for a new weapons system

Which example is NOT a government transfer? food stamps unemployment compensation Social Security benefits paid to someone who is retired payments by the Defense Department for a new weapons system

a decrease in the price of feed given to dairy cows

Which factor is MOST likely to shift the supply of milk to the right? the bankruptcy of many small dairy farms an increase in household income, milk being a normal good a decrease in the price of feed given to dairy cows a tax on each gallon of milk produced

the purchase of stocks and bonds by a business

Which factor is NOT included in investment spending in the national income accounts? the purchase of machinery and other productive physical capital spending on inventories the purchase of stocks and bonds by a business new residential construction

a shift to the right of the demand curve for milk

Which factor will raise the price of milk? a shift to the right of the demand curve for milk a decrease in the number of milk buyers a shift to the right of the supply curve for milk an increase in the number of milk suppliers

the purchase of your neighbor's house, which was built in 1994

Which item would NOT be included in this year's GDP? the purchase of your neighbor's house, which was built in 1994 the hiring of a new schoolteacher the purchase of a new hybrid truck the production of a television show

imposing a tax per unit of garbage generated

Which method of encouraging recycling is likely to be MOST effective given that people usually exploit opportunities to make themselves better off? publicizing the advantages of recycling imposing a tax per unit of garbage generated advertising different ways of recycling appealing to consumers to be a good citizen

there are gains from trade

Which principle underlies the interaction of individual choices? There are gains from trade. Choices are necessary because resources are scarce. People usually respond to incentives, exploiting opportunities to make themselves better off. "How Much" is a decision at the margin.

money

Which resource is NOT one that pertains to the production of rice? labor money capital equipment fertile land

in 2008, fearing a recession, congress approved a white house approval to rebate some taxes for 2007

Which statement demonstrates one of the three principles of economy-wide interactions? A city builds a new public park on the grounds of an abandoned warehouse. Your roommate offers to pay for the movie tickets if you drive to the theater. In 2008, fearing a recession, Congress approved a White House proposal to rebate some taxes for 2007. A student chooses to rent a movie with friends, rather than study for an economics quiz.

it is possible to have an absolute disadvantage but a comparative advantage in something

Which statement is TRUE? Some very untalented people have a comparative advantage in nothing they do. Some very talented people have a comparative advantage in everything they do. It is possible to have an absolute disadvantage but a comparative advantage in something. Some very talented people have a very low opportunity cost in everything they do.

there has been an increase in the rate of inflation

Which statement is a positive economic statement? Women should be paid as much as men are for the same work. There has been an increase in the rate of inflation. Government has grown too large and should be reduced. Government should be subject to the same rules as all other institutions.

sean bought a new truck

Which transaction will be included in the official measurement of GDP? Stan sold his 2015 Honda to his sister. Monica illegally downloaded movies to her laptop. Sean bought a new truck. Ben bought a textbook from his friend who took the class last semester. .

a supply curve

_____ illustrates a positive relationship between price and quantity. Equilibrium A production possibility frontier A demand curve A supply curve