MACRO TEST TWO
economic growth is usually measured by the annual percent change in
real GDP per capita
economists typically measure economic growth by tracking
real GDP per capita
Which phase of the business cycle occurs immediately before a trough?
recession
The contradictory phase of the business cycle is characterized by
reduced output and increased unemployment
GDP can be found either by adding up all of the __ or __ in the economy
spending;income
disposable personal income can be either __ or __
spent;saved
As a result of __ unemployment, workers' jobs may become obsolete, they will need additional training to find new jobs
structeral
due to the invention of ATMs many bank tellers lost there jobs, this is an example of __
structural unemployment
How much the economy can produce at its natural rate of output depends on
technology, quantity of available resources, the productivity of labor, stock of available capital
Measures of employment and prices have been estimated on a monthly basis only since
the great depression
other things being equal, the higher the rate of savings across countries
the higher the rate of change of real GDP per capita
Personal consumption expenditures are goods and services purchased by residents of the united states
true
Scott has a Phd in sociology and drives a taxi cab for a living. Scott is categorized as
underemployed
Business Cycles
vary in duration and intensity
If the US imported 1.5 billion worth of goods and services and sold 2.9 billion worth of goods and services outside its borders , net exports would equal..
1.4 billion
If the labor force is 20 mil and the total employed is 18 mil, what is the unemployment rate
10%
The nation of workovia has a population of 15 mil, of which 10 mil are the labor force and 9 mil are working , workovias unemployment rate is
10%
Macroeconomics focuses on issues such as economic growth, the output of the entire economy and inflation rates
True
An example of an intermediate product is
a purchase of tires by a motor company to put on cars, wood for a home,leather for shoes
What is the primary goal of macroeconomic policy?
achieving low inflation
Included in the investment category under the expenditure approach to GDP accounting is
additions in inventory, machines and tools, newly constructed residential housing
Reduced levels of illiteracy
are, in part both a cause of economic growth and caused by economic growth
What is an example of a final good?
bacon purchased at a grocery store
Which of the following will cause the PPF to shift outwards
better public education, healthcare, and larger budgets for research/exploration
Alternating increases and decreases in economic activity are known as
business cycles
A recession is always followed by a depression
false
Both the initial development process and the sustained growth of an economy are dependent on a large natural resource base
false
Economic growth is usually measured by is usually measured by the annual percent change in the nominal output of goods an services per capita
false
Economic growth rates tend to be lower in countries where property rights are better enforced by government
false
Macroeconomics studies economic activity from the level of one individual or firm
false
a limited resource base is no obstacle to economic growth
false
GDP is calculated including
final products but not intermediate goods
Which of the following is considered a factor that contributes to economic growth?
government protection of property rights, increased specialization of labor, research and development, improved efficiencies through economies of scale
economic growth tends to be greater in countries where
government protects property rights,free trade, many resources towards research/development
The total market value of all final goods and services produced by resources in the US is called
gross domestic product
to be in the labor force you can...
have a temporary job, be retired, or actively seeking work
Other things equal, if a recession gets worse, the number of discouraged workers __ and those in the labor force __
increases;decreases
If a country increased its saving rate
its current consumption would have to fall, and its future consumption possibilities would rise
In the long run the most important determinant of a nations standard of living is
its rate of productivity growth
The main reason people were unemployed in the US in 2009 was because they...
lost their job
An economic policymaker discovers that structural unemployment has been rising relative to the other types of unemployment . She should recommend
more funding for job retraining to get employees into growing industries
Nominal GDP differs from real GDP in that
nominal GDP is measured in current year prices, real GDP is measured in base year prices
The unemployment rate is
one of the most important statistics for policy makers
we can be certain that net exports fall if
exports fall and imports rise
An increase in labor input does not necessarily increase output per capita
true
What do households supply?
Both labor and non labor resources
Which organization dates business cycles
National Bureau of Economic Research
Which category of consumption spending tends to be the most unstable over the business cycle?
durable consumer goods
An economy's PPF will shift outward over time if
either a tech. advance occurs or the productivity of labor increases
a business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle in order are
expansion, peak, contradiction, and trough
not included in government purchases
transfer payments
The event that stimulated the U.S government's commitment to tracking the economy's health through national income accounting system was the
Great Depression
__ are over 70% of GDP, while__ are nearly 11% of GDP
Personal consumption expenditures;gross private domestic investments
Which is not included in gross domestic product?
a construction firm's purchase of lumber to build a four bedroom home
Which of the following would be included in GDP calculations
a hamburger purchase by a hungry restaurant patron
disposable income is
a measure of the income households have to spend after paying taxes
Gross domestic product is a measure of
an economy's total output
investment in human capital
can be acquired through on the job training, and that it is an important source of economic growth
The idea that all income ultimately goes to households, which then use it to buy goods and services from firms, is a central idea of the
circular flow diagram
Net exports
exports minus imports
following the expenditure method GDP= C+ I+G+X
false
if the quantity of physical capital in a country increases at the same time that the quantity or quality of labor resources used falls that country would experience economic growth as a result
false
the correlation between per capita output and the proportion of the population that is unstable to read and write small
false
the distinction between weather a good is durable or non durable is clear and easy to apply
false
Investment includes
fixed investment plus additions to business inventories
A primary goal of a macroeconomic policymaker is to achieve
full employment
high rates of saving and investment in a country will result in
guaranteed rapid econ growth, will result in greater econ growth if accompanied by advances in technology/ human capital
The natural rate of employment
is the employment rate where the economy is producing at optimal level of output
In a country that has an unstable government or judiciary, would you expect to see more entrepreneurial activity or less?
less, because its an unreliable infrastructure for protecting property rights
French perfume that is purchased in the US is accounted for in which expenditure category of US GDP
net exports
Total spending in an economy is the sum of
personal consumption+gross private investment+government+net exports
Per capita real output would tend to rise, other things being equal if ____
the labor force participation rate in the country rose
The standard of living will decline if
the rate of population growth exceeds the rate of growth of real GDP
The nation's gross domestic product is equal to
the total market all final goods and services produced by resources in the united states
The labor force is defined as
the total number of employed and unemployed
in the great depression __ out of __ people in the labor force had jobs
three; four
What is not considered a factor payment
transfer payments
"jobless recovery" was a recent phenomenon during the recession of 2001 because the early rate of employment increase was well below the average of past recoveries
true
Human welfare is greatly influenced by long term changes in a nation's capacity to produce good and services
true
along the PPF, the economy is producing at its potential output , sometimes called its natural level of output
true
economic growth is a complex process involving many important factors, no one of which completely dominates
true
education is both a consequence of economic growth and also a cause
true
fixed investments include all spending on capital goods as well as on residential construction
true
free-trade policies will tend to increase the value of total output in an economy
true
greater stocks of land, labor, or capital can shift the PPF outward
true
if we counted the value of intermediate goods as well as the full value of the final product in GDP we would be double counting
true
in boom periods, expenditures on consumer durables often increase more than expenditures on non durables
true
one of the most important determinants of economic growth is saving rate
true
technological advances even without any change in the quantity or quality of the labor resources used tend to lead to economic growth
true
technological advances involve both invention and innovation
true
trade can make economies more productive , even if an individual enterprises don't become more efficient
true
In the income approach to measuring GDP, factor payments include
wages and salaries used for goods and services, rent for land, interest payments for the use of capital goods, profits for workers
If personal consumption= $100, investment=25, government purchases=$25, imports=$20, and exports=$10, then GDP=
$140