Macro Econ chap 21-26
Determine whether each description refers to nominal gross domestic product (GDP) or real GDP. A measure of an economy's output using current prices.
nominal GDP
James quit his job to stay at home with his children and has not worked in 15 years, nor has he looked for work.
not unemployed
Laura works 20 hours in a paid position for her local animal shelter
not unemployed
Pete had a knee replacement two weeks ago and will not be available to work at his job as a mechanic for the next three months.
not unemployed
The United States federal government, which had almost $15 trillion in debt in 2011
winner
A new building for Tony Hawk Industries
Included in GDP
A new skateboard you buy for your niece
Included in GDP
The commission paid to the seller of a previously-owned collectors' skateboard
Included in GDP
Honda's assembly and sale of cars in the U.S.
Included in U.S. GDP
Ocean Spray purchases plastic to make bottles
Included in U.S. GDP
Herb, who keeps his savings in an old coffee can
L
Karen, a retired school teacher who relies upon her fixed pension to pay for her expense
L
Third National, a bank that loaned many people money for home purchases
L
Have the millions of dollars that people have spent on video games worldwide affected the gross domestic Product (GDP) in their respective countries?
Macroeconomics
How much less economic output occurs countrywide because workers call in sick to stay home and play either "Call of Obligation" or another video game?
Macroeconomics
Has the country's unemployment rate changed as Ultravision hired a huge team of workers to develop the game?
Macroenonmics
How does Ultravision choose to market "Call of Obligation.
Microeconomics
How much will Ultravision charge for "Call of Obligation?"
Microeconomics
How much will Ultravision pay the developers of the game?
Microeconomics
Is Ultravision able to sell all of the "Call of Obligation" games it produces or does it need to produce more?
Microeconomics
A previously-owned collectors' skateboard
Not included in GDP because of double-counting
A ticket for the X Games bought from a person on a street corner
Not included in GDP because of double-counting
A used copy of the Tony Hawk video game
Not included in GDP because of double-counting
A used skateboard you buy for your brother
Not included in GDP because of double-counting
Included in GDP
Not included in GDP because of double-counting
GM's assembly and sale of cars in Mexico
Not included in U.S. GDP
resale of used textbooks to college students
Not included in U.S. GDP
sale of wheat to Mrs. Baird's Bakery
Not included in U.S. GDP
Ocean Spray purchases plastic to make bottles
Ocean Spray purchases plastic to make bottles
Prior tothe Great Depression, most economists believed that the economywas self-regulating.
Prior tothe Great Depression, most economists believed that the economywas self-regulating.
Which individual is out of the labor force?
Robert is without a job, is able to work, but is not actively looking for work.
The actions of individuals in an economy can compound upon one another, leading to outcomes that magnify the actions of individuals. This can be summarized using which phrase?
The whole is greater than the sum of its parts.
Recessions typically hurt
firms and individuals.
When the government changes either its spending or tax policy to pursue economic objectives, it has changed its
fiscal policy.
Eric is an experienced project manager who lost his job at a tech start-up because the company's product failed to become popular. He is confident he can get a new job and has already rejected a number of offers.
frictional unemployment
Hamid has just graduated as a lawyer from an esteemed law school. He is confident of getting a job and has already refused a few lower‑paying jobs.
frictional unemployment
The natural rate of unemployment equals
frictional unemployment plus structural unemployment.
A public school teacher's salary
government purchases
According to Keynesian economics, economic downturns are caused by
inadequate spending
A large number of young people entering the labor force
increase
An increase in union membership
increase
Extra financial benefits for the unemployed
increase
Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. increasing minimum wage
increase
Calculate Pakistan's GDP. Assume that the values are all current and no conversions need to be made. Give your answer in terms of trillions of rupees, and round to two decimals.
11.99
What is the value added for Bob?
12050
Consider the given simple economy. Sheepnip Co. makes sheep feed. Better-bald Inc. purchases sheep feed for the sheep it raises and sells wool. Sweeter Sweaters Inc. makes and sells wool sweaters. What is the total payments (income) to factors of Better-bald Inc.?
1350
What is the unemployment rate?
22.55
Suppose the civilian noninstitutionalized working-age population is 35.935.9 million in in a hypothetical economy. Of these, 4.44.4 million are working part-time and 13.1913.19 million are working full-time. Assume the Bureau of Labor Statistics (BLS) definitions are used for calculating unemployment data. Among those not working, the most recent job-search activity for 3.403.40 million happened less than two weeks ago, while 1.721.72 million most recently looked for work between two and four weeks ago. An additional 0.860.86 million most recently looked for work five weeks ago, and the remaining 12.3312.33 million who do not have jobs have not looked for work in the past six weeks. Round your answers to two decimal places. What is the size of the total labor force?
22.71
Mother Nature produces dirt, Tlaloc turns the dirt into brick, and Bob creates brick houses. The economy is characterized by the table. Note all figures are measured in dollars. What is the value added for Mother Nature?
3250
The average rate of growth for slow-growth countries is around 2% per year, and for fast-growth, greater than 5% per year. Suppose the growth rate of the economy is 2%. The size of the economy roughly doubles every
35 years.
What is the total payments (income) to factors of Sweeter Sweaters Inc.?
4600
How many people are unemployed?
5.12
What is the value added for Tlaloc?
5150
What is the labor force participation rate?
63.26
What6 was the GDP for this economy
7750
Which of the examples provides the best evidence that inflation has occurred?
A person whose salary has increased is able to purchase fewer goods and services.
Why is a hypothetical basket of goods used to measure inflation?
Consumers can see the general increase in price over time by using a basket of goods
Joy, who borrowed $40,000 to pay for her college education
W
The graph depicts total non-farm employment in the United States over time. The grey bars represent recessions. The graph depicts total non-farm employment in the United States over time. The grey bars represent recessions.
Which of these organizations officially determines when the economy is experiencing a recession?
Select the correct definition of inflation.
a general and ongoing rise in the average level of prices in an economy
What is inflation?
a general increase in prices
Which of the events is likely to occur when the business cycle is in a period of expansion?
an increase in economic growth
Since 1900, what has been the long-term pattern of growth in the United States?
an increase in real GDP (gross domestic product) per capita
Which of the events is likely to occur when the business cycle is in a period of recession (contraction)?
an increase in unemployment
Consider the hypothetical trade data presented in the accompanying table.
comparative advantage
A 55-cent taco
consumption
A cab for personal use
consumption
A domestically manufactured personal computer
consumption
A ticket to a local sporting event.
consumption
ice cream
consumption
James is an architect who has been laid off owing to a slump in the demand for property. He feels he will have to wait until the economy picks up before he can get a new job.
cyclical unemployment
Sarah is a recent economics graduate who is entering a difficult labor market, due to a severe recession. She is continuing to look for work but is having a hard time getting interviews.
cyclical unemployment
An increase in information about job opportunities
decrease
More funding for government worker training programs
decrease
Reducing workers' collective bargaining rights
decrease
The graph depicts total non-farm employment in the United States over time. The grey bars represent recessions. Based on the graph, a major characteristic of a recession is
decrease in employment.
Prior tothe Great Depression, most economists believed that the economywas self-regulating.
decreased taxes, supported decreased interest rates, or both
Individuals who want to work, but have given up searching for a job because of limited prospects, are known as
discouraged workers.
A domestically manufactured business computer
investment
What is the main goal of policymakers in regard to the business cycle?
limit the volatility of the business cycle by reducing the size of both recessions and economic booms
This group, consisting of individuals who would like to work but have not looked for work during the past four weeks, is included among
marginally attached workers.
Changing the amount of money in circulation to pursue economic objectives changes the
monetary policy.
How frequently is the survey that determines unemployment released?
monthly
A dollhouse sold abroad
net exports
A measure of output that is not adjusted for inflation.
nominal GDP
A measure of an economy's output using constant prices.
real GDP
A measure of output that is adjusted for inflation.
real GDP
Which of the choices is most directly related to cyclical unemployment?
recessions
Craig lost his job several months ago. He is having a hard time finding a job that pays him more than unemployment insurance does.
structural unemployment
Who reports the official U.S. unemployment rate?
the U.S. Bureau of Labor Statistics
Which of the factors would decrease the rate of frictional unemployment?
the advent of the Internet, which makes finding available jobs easier
Suppose a report on CNN says that the United States is heading into a recession. As a result, Bert's family, as well as many other like-minded families and individuals, reduces their spending and instead fills up their savings accounts for potential hard times. As a result of this behavior,
the economy is actually harmed, since there is a sharp decease in consumer spending.
Suppose a report on CNN says that the United States is heading into a recession. As a result, Bert's family, as well as many other like-minded families and individuals, reduces their spending and instead fills up their savings accounts for potential hard times. In macroeconomics, this result is known as
the paradox of thrift.
Real GDP per capita is NOT an adequate measure of
the well-being of each person in an economy.
When the economy is doing well, a significant share of unemployment is frictional.
true
Individuals who are involuntarily working part‑time are considered
underemployed.
By excluding the groups identified in the previous questions, the U.S. Bureau of Labor Statistics calculation methods
understate the true level of unemployment.
Alex just turned 16 and started applying for jobs. He has not found a company that will hire him yet.
unemployed
Erik volunteers for 10 hours per week at his children's school and does no other work. He sends his resume to 10 potential employers daily
unemployed
The most common indicator in the labor market is
unemployment rate.
