macro unit 2 test
Real GDP refers to
GDP data that have been adjusted for changes in the price level
Suppose the total monetary value of all final goods and services produced in a particular country in a year is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that
GDP that year is $500 billion.
If the unemployment rate is 9 percent and the natural rate of unemployment is 5 percent, then the
cyclical unemployment rate is 4 percent. - If the natural rate of unemployment (frictional + structural) is 5 percent and the actual rate (frictional + structural + cyclical) is 9 percent, then there is 9 - 5 = 4 percent cyclical unemployment.
The one demand factor (determinant) that relates to economic growth a) if met, ensures there will be no unplanned increases in inventories. b) requires increases in total spending to realize the output gains. c) is one of six factors that directly affect the rate and quality of economic growth. d) All of these choices are correct.
d) All of these choices are correct.
The labor force includes
employed workers and persons who are officially unemployed.
free trade
encourages growth by promoting the rapid spread of new inventions and innovations.
Transfer payments are
excluded when calculating GDP because they do not reflect current production.
net exports are
exports less imports
The National Income and Product Accounts (NIPA) help economists and policymakers to
follow the long-run course of the economy to determine whether it has grown or stagnated.
Search unemployment is a type of
frictional unemployment
Final goods and services refers to
goods and services purchased by ultimate users, rather than for resale or further processing.
When an economy's production capacity is expanding,
gross domestic investment exceeds depreciation
There are several ways to measure aggregate output. The one favored by the Bureau of Economic Analysis is
gross domestic product
The income amount used for "Rents" in the national accounts is net rent, so it is
gross rental income - depreciation of the rental prop
In the period following the Great Recession, the creation of new Internet apps has
had little measured effect on GDP or productivity but may create a lot of consumer satisfaction.
The money paid by private businesses to the suppliers of loans used to purchase capital is called
interest
If the number of hours worked in an economy is 108 and its labor productivity is $9 of output per hours worked, the economy's real GDP
is $972.
The nation's stock of capital
is the collection of human-made resources that help to produce goods and services., can be divided into two broad categories that we can informally refer to as "tools" and "recipes.", includes spending that pays for new or improved software
A nation's gross domestic product (GDP)
is the dollar value of all final output produced within the borders of the nation during a specific period of time.
After the steam engine was perfected,
items that were once handcrafted, were now mass-produced in factories.
U.S. GDP growth statistics
may understate or may overstate the gains in well-being
The fundamental invention underpinning the 1995-2010 rise in the average rate of productivity growth is the
microchip
GDP is the
monetary value of all final goods and services produced within the borders of a nation in a particular year.
The system that measures the economy's overall performance is formally known as
national income accounting.
The smallest component of aggregate spending in the United States is
net exports
Alex works in his own home as a homemaker and full-time caretaker of his children. Officially, he is
not in the labor force.
By summing the dollar value of all monetary transactions in the economy, we would
obtain a sum substantially larger than GDP
National income accountants can avoid multiple counting by
only counting final goods
GDP can be calculated by summing
personal consumption, investment, government purchases, and net exports.
Suppose that an economy's labor productivity and total worker-hours each grew by 4 percent between Year 1 and Year 2. We could conclude that this economy's
production possibilities curve shifted outward.
A nation's infrastructure refers to
public capital goods such as highways and sanitation systems.
The income approach to national income accounting lists "Rents" as one of the components. All of the following statements about "rents" are correct except
rents include the interest paid to the suppliers of loans used to purchase capital.
U.S. GDP growth statistics may understate the gain in well-being,
since products have greatly improved over time.
Human-made resources that are referred to as "recipes" includes
spending on new writing that increases the flow of entertainment and education.
Susie has lost her job in a Vermont textile plant because of import competition. She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be available. We can say that Susie is faced with
structural unemployment.
Unemployment involving workers whose skills and experience have become obsolete or unneeded is called
structural unemployment.
Buying a new pair of jeans for yourself would increase
consumer nondurable goods and consequently personal consumption expenditures.
interest costs of the money households recieve on
corporate bonds, certificates of deposit (CDs), savings deposits.
Nomial GDP is
the sum of all monetary transactions involving final goods and services that occur in the economy in a year.
Which of the following will NOT be included in U.S. GDP?
the value of avocados grown in Mexico and shipped to your local grocery store
Labor productivity is defined as
total output ÷ hours of work
National income accountants consider services to be an intangible act or use for which a consumer, firm, or government is willing to pay. true or false
true
Purchasing a two-year-old, secondhand laptop contributes nothing to this year's GDP.
true
The four supply factors (determinants) that relate to economic growth
will increase the potential size of an economy's GDP.
Suppose that GDP was $280 billion in Year 1 and that all other components of expenditures remained the same in Year 2 except that business inventories fell by $18 billion. GDP in Year 2 is
$262 billion.
1.Improvements in technology. 2.Increases in the supply (stock) of capital goods. 3.Purchases of expanding output. 4.Obtaining the optimal combination of goods, each at least-cost production. 5.Increases in the quantity and quality of natural resources. 6.Increases in the quantity and quality of human resources. As distinct from the supply factors and efficiency factor of economic growth, the demand factor(s) of economic growth is (are)
3 only
What percentage of the U.S. adult population has a college or postcollege education (as of 2020)?
38 percent
Which Scottish inventor perfected an efficient steam engine, and thus is credited with starting the Industrial Revolution?
James Watt
the Bureau of Economic Analysis complies the NIPA accounts. The letters NIPA represent
National Income and Product Accounts.
Which of the following is not a reason for women's increased labor-force participation?
There has been an increase in the number of jobs requiring a college degree.
Which of the following is not an argument made by proponents of economic growth?
There is a direct relationship between a growing real GDP and rising pollution.
Suppose Smith pays $100 to Jones.
We need more information to determine whether GDP has changed.
Which of the following is a final good or service?
a haircut purchased by a father for his 12-year-old son
Net exports are negative when
a nation's imports exceed its exports.
To manage the problem of adding dissimilar items when calculating GDP, the BEA
adds the monetary values of each final good or service produced.
Which of the following is not a supply factor in economic growth? a) the stock of capital b) technological advance c) the size and quality of the labor force d) aggregate expenditures of households, businesses, and government
aggregate expenditures of households, businesses, and government
Critics of economic growth
argue that economic growth does not resolve socioeconomic problems such as an unequal distribution of income and wealth.
Transfer payments are not included in government purchases because
such payments generate no production.
The natural rate of unemployment is
that rate of unemployment occurring when the economy is at its potential output.
The Industrial Revolution and modern economic growth resulted in
the average human lifespan more than doubling.
At the economy's natural rate of unemployment,
the economy achieves its potential output.
Real GDP is
the nominal value of all final goods and services produced in the domestic economy, adjusted for inflation or deflation.
A price index is
the price of a market basket in a given year divided by the price of an identical market basket in a reference year.
