Macro Final Exam
Last year in Canadamica consumption expenditure was 20 billion, interest, rent, and profit were 2.5 billion, government expenditure on goods and services 7 billion net exports of goods and services was 5 billion and investment was 2 billion hence total expenditure was
34 billion
Real gdp measures the value of goods and services produced in a given year valued using
Base year prices
Total expenditure equal total income
Because firms pay out everything they receive as income to the factors of production
Total income in a country in 2010 is 780 billion. Total expenditure in the country
Is 780 billion
Cyclical unemployment occurs when
A downturn in economic activity decreases employment
If the aggregate demand curve and the aggregate supply curve intersect at a level of real gdp less than potential gdp there is
A recessionary gap
To measure gdp by using the income approach we must add all incomes and then ________ depreciation and _________ net taxes less subsidies
Add; add
If the aggregate demand curve and the aggregate supply curve intersect at a level of real gdp more than potential gdp there is
An inflationary gap
If the economy is above full employment there is ________ gap and as the economy adjusts toward full employment the price level ______
An inflationary; rises
A restaurant buys fish to offer as a daily menu special. The purchase of the fish by the restaurant is
An intermediate good
Consumption expenditure includes spending
By households
An example of cyclical unemployed individual is
Chalres, who lost his job as real estate salesperson when the housing market went soft
Which of the following is included in Germany's GDP
China produced by the English owned wedge wood company at a factory in Berlin, Germany
The expenditure approach to measuring gdp is done by using data on only
Consumption expenditure, investment, government expenditure, on goods and services and net exports of goods and services
Which of the following represents the relationship between disposable income (di) consumption (c) and saving (s)
Di=c+s
The rate of unemployment is found by
Dividing the number unemployed by the number of people in the labor force
The purchase of a new Boeing fighter jet by Israel is classified in the us gdp accounts as
Export expenditure
Net exports of goods and services is equal to the value of
Exports minus the value of imports
The faster economic growth is the
Farther the production possibilities curve shifts out
To calculate GDP it is necessary to add up the market value of all the ___________ produced within a country during a year
Final goods and services produced
Investment is the expenditure done by
Firms
The following are all final goods except
Flour used by the baker to make cup cakes
In one year a firm increases its production by 9 million and increases its sales by 8 million. All other things in the economy remaining the same which of the following is true
Gdp increases by 9 million and inventory investment increase 1 million
The expenditure approach values _____ and the income approach values _________
Goods and services at market prices; goods and services at factor prices
As measured gdp omits which of the following
Illegal sales of goods and services changes in the amount of leisure time household production of goods and services
The category of rent in the income approach to gdp
Includes the money paid to use land and other rented inputs
After calculating net domestic product at factor cost to calculate gdp using the income approach in part we must add
Indirect taxes and depreciation
Bobs funky t-shirts began the year with 1000 shirts in inventory produced 10000 shirts during the year and ended the year with 1100 shirts in inventory. The 100 shirts added to his inventory will be classified as
Investment
The fraction of a change in real disposable income that is spent is referred to as the
Mpc
Which of the following is true
Mpc + MPs = 1
Which of the following expenditure components of gdp can be negative or positive
Net exports of goods and services
When calculating gdp purchases of used goods are
Not included
If you buy a five year old tv from a friend the amount you paid for the tv is
Not included in this years gdp
If you make dinner for yourself
Only the market value of ingredients that you purchased this year is added to gdp
The consumption function relates
Planned household consumption to real disposable income
GDP is equal to the market value of all final goods and services ____________ in a given period of times
Produced within a country
Which formula is correct
S=yd - c
The terms saving and savings differ in that
Savings are a stock and saving is a flow
A lifeguard who is out of work in the winter is
Seasonally unemployed
If an outdoor vendor loses her job when winter weather comes this individual is
Seasonally unemployed
Economic growth will
Shift the production possibilities curve outward
When measuring gdp by the income approach wage income includes
Social security contributes made by the firm, wages paid during a workers vacation time
In 2009 in the United States consumption expenditure was 9996 billion investment was 1559 billion, government expenditures on goods and services were 2927 billion and total exports were 1492 billion gdp equaled
Some amount but there is not enough information given calculate gdp
Fictional unemployment will always exist since
Some workers will always want to make a job transition
Collin has lost his job with a telemarketing company which has moved its operation to India. Collin is considered
Structurally unemployed
If a person loses her job because her abilities and skills are poor match with current requirements of employers this person is considered
Structurally unemployed
Depreciation is
The decrease in the value of capital resulting from its use and obsolescence
Which of the following would not be directly included in the us gdp in 2010
The market value of the jet fuel bought by delta to use for flights in 2010
Costs of unemployment include
The output lost due to the fact that the economy is not running at full employment
Which of the following is included in U.S GDP
The rental value homes owned by US citizens tickets sold by U2 for concerts held in the United States
The total civilian labor force is comprised of
The unemployed and the employed
Last year us net exports of goods and services was negative. This fact means that last year
The value of u.s exports was less than the value of us imports
In order to measure gross domestic product we can follow
Two approaches, the expenditure approach and the income approach
Production by Honda a Japanese firm in the United States is included in ________ gdp and the production by NIke corporation a us firm in Vietnam is included in _______ gdp
US/ Vietnamese
To calculate GDP it is necessary to
Use the market price to place a dollar value on each good produced
Nominal gdp is gdp
Using current market values
The income approach to measuring gdp is based on summing
Wages, interest, rent, and profits
Which of the following is classified as a final good or service
Your purchase of online access to the Wall Street journal
What does GDP measure
value of final goods and services