macro exam 2

The real interest rate is the:

the nominal interest rate minus the rate of inflation

Which of the following encourages the development of new ideas and inventions

patents

If you see that inflation between last year and this year is 3%, this means that:

on average, prices went up across the Econ by 3%

The aggregate production function Y = f(L, H, K) shows that economic growth can occur if: (i) human capital increases. (ii) labor productivity falls. (iii) the capital stock in the country depreciates. (iv) the depreciation rate increases.

(i)

The aggregate production function Y = f(L, H, K) shows that economic growth can occur if: (i) more labor is employed. (ii) human capital is reduced. (iii) the dependency ratio rises. (iv) the capital stock stays constant

(i)

The moral of the story of the solow growth model is that:

Capital accumulation alone cannot lead to sustainable economic growth

Property rights refer to:

Control over a tangle or intangible resource

The higher the minimum wage, as compared to the equilibrium wage, the:

Higher the structural unemployment rate

Along the same aggregate production function, the level of _____ is the same.

Technology

Money Illusion

Tendency to focus on nominal values instead of inflation-adjusted values.

The Gov passes a new investment tax credit initiative. Which input in the production function changes, and what is the effect on Econ growth in the country?

The capital stock increases, and Econ growth is positively affected

The aggregate production function is represented as:

Y=f(L,H,K)

Which of the following would lead to a slowdown in economic growth?

a reduction in the birth rate coupled with an increase in the retirement rate of a population

A decreasing returns to scale production function is one where increasing all inputs by a certain proportion leads to output rising by:

a smaller proportion

Henry Ford's $5 per day wage is an example of:

an efficiency wage

A minimum wage that is above an equilibrium wage is:

an example of a price floor

Hyperinflation is:

extremely high rates of inflation.

The GDP Deflator is an index that tracks the:

price of all goods and services produced domestically

If the frictional rate of unemployment is 1.45%, the structural rate of unemployment is 2.3%, and the total unemployment rate is 6%, then we can conclude that:

the equilibrium rate of unemployment is 3.75%

Which of the following lists the functions of money? -medium of exchange, store of value, and unit of account -medium of exchange, measure of inflation, and benchmark of quality -carrier of exchange, unit of account, and measure of inflation -store of value, store of interest, and buffer against inflation

-medium of exchange, store of value, and unit of account

An underemployed person is one who is:

working but who's skills are not fully utilized

Which of the following would lead to a slowdown in economic growth? -an increase in the dependency ratio -an increase in human capital an increase in capital accumulation in the economy -reduced inefficiency in production

an increase in the dependency ratio

Which of the following correctly shows the steps needed to calculate the inflation rate? -Collect prices from the stores where people shop, assess the substitution that people make from low inflation to high inflation products, and calculate the difference in the prices that people pay. -Find the total value of the basket of goods and services, assess quality changes from one period to the next, and measure the inflation rate. -Tally up the cost of the basket of goods and services, subtract the value of goods and services that are no longer counted in the basket, and then calculate the inflation rate. -Find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate.

Find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate.

The equilibrium unemployment rate is also known as the _____ unemployment rate.

Long-run

If a bakery buys a second oven, hires a second baker, buys double the number of ingredients, doubles the size of the bakery, and then produces double the number of cakes, then the bakery is experiencing:

constant returns to scale.

If you see that the consumer price index this year is lower than the consumer price index last year, this means that:

on, average, prices went down across the economy

During the Great Recession, the United States Congress increased the length of time that unemployment benefits could be received from 52 weeks to 99 weeks. This change caused:

An increase in costs for the gov

What is the difference between microeconomics and macroeconomics

Microecon is the study of an individual decisions in specific markets, whereas macroecon is the study of the economy as a whole

Menu costs are the:

marginal costs of adjusting prices.

What is the difference between spending from a mircoecon standing vs macroeconomic standpoint

micro spending refers to spending by you, your family, company, whereas macro spending refers to the spending by all consumers, businesses, and government in economy