macroeconomics 2302 ch 5, 6, 7
In the circular flow diagram, households demand _____ and supply _____
goods and services; labor
The expenditure approach to GDP is
GDP = C + I + G + EX - IM
Index most often used to measure inflation is
GDP deflator
If GNP is $800 billion and depreciation is $90 billion, then net national product is
$710 billion
If personal income is $925 billion and personal income taxes are $70 billion, the value of disposable personal income is
$855 billion
If the labor force is 500 and unemployment is 450, then the unemployment rate is
10%
If x is the base year and you're trying to find it's price index, it will always be
100
A company produced 12 motorcycles in 2010. The company sold 8 in 2010 and added 4 to its inventories. The market value of the motorcycles in 2010 was $1000 per unit. What is the value of this company's output that will be included in the 2010 GDP?
12,000. GDP is a total of all goods and services PRODUCED in a given year.
If there's 14,000 employed and 3,000 unemployed, the labor force equals
17,000
If nominal GDP is $18 trillion and real GDP is $3 trillion, the GDP deflator is
600
The GDP deflator in year 2 is 110 and the GDP deflator in year 3 is 118. The rate of inflation between years 2 and 3 is
7.27%
The value of a 2006 convertible you purchased from a dealer in 2010 would not be a part of 2010's
GDP
When differences between nominal GDP and real GDP result due to price changes and nothing else is compared, an index called the ____ is created
GDP deflator
The value of what Burger King produces in France is included in the United States ____ and in the French ____
GNP; GDP
The value of what KFC produces in Japan is included in the U.S. ____ and in the Japanese ____
GNP; GDP
The productivity of workers is defined as the
Output produced by a worker per hour
What is NOT a desirable characteristic in an economy?
Rapid increase in the general price level
The government wants to encourage consumer spending through cutting income taxes. This is an example of
a fiscal policy
A price index is
a measurement showing how the average price of a bundle of goods changes over time
GDP minus final sales gives a measure of the
change in business inventories
The income received and payments made by each sector of the economy are represented by a
circular flow diagram
When the Fed increases the rate of growth of the money supply to jump start the economy, the unemployment type that will be directly affected is the
cyclical unemployment
A decrease in the overall price level is known as
deflation
By not counting the value of intermediate goods when calculating GDP, you avoid
double counting
When a radiologist quits her job at a hospital and starts looking for a better job in another hospital, she is
frictionally unemployed
The total market value of all final goods and services produced within a given period by factors of production located within a country is
gross domestic product
If net investment is positive, then
gross investment is greater than depreciation
GNP converted into dollars using an average exchange rate over several years adjusted for rates of inflation is
gross national income
Nominal GDP measures the value of all goods and services
in current dollars
Matt graduated from college three weeks ago and is currently without work. He accept a job that will start in two weeks. Today, Matt is
in the labor force
Cheryl graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Cheryl is
in the labor force.
Real GDP is gross domestic product measured
in the prices of a base year
If the central bank increases the money supply, it is conducting
monetary policy
When GDP is measured in "current prices" it is known as the
nominal GDP
Double counting can be avoided by
not counting the value of intermediate goods in GDP
A rancher raises alpaca. Once a year, he shears them and sells the raw wool to a processor who spins it into yarn. The yarn is then sold to a mill which produces and sells alpaca sweaters. In calculating GDP we would count
only the sweaters
Inflation is an increase in the
overall price level
The per-hour output produced by a worker describes the
productivity of workers
The GDP deflator is the
ratio of nominal GDP to real GDP multiplied by 100
When GDP is measured using "adjustments for price changes" it is known as the
real GDP
The difference between the interest rate on a loan and the inflation rate is the
real interest rate
Slump, downturn, and contraction are all words for a
recession
The term "business cycle" refers to the
short-term ups and downs in the level of economic activity
Demand for massage therapists declined in the spring of 2010, but the starting wages paid to massage therapists was still the same at the end of 2010. This is an example of
sticky price
An individual who cannot find a job because his or her skills have become obsolete is an example of
structural unemployment
Telephone operators who have lost their jobs as a result of computerized switchboards are an example of
structural unemployment
Macroeconomics
studies the behavior of the economy as a whole
Fiscal policies are government policies regarding ____ and ____
taxes; expenditures
The major lesson of the circular flow diagram is that
total income in the economy must always equal total spending
The period in the business cycle from a _____ to a _____ is called an expansion
trough; peak
Diane lost her job and immediately started looking for another job. As a result the
unemployment rate increases