principles on macroeconomics final
"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:
$44
In November 2010 the labor force in Siouxtown, was 14,800. There were 14,483 persons employed. The local unemployment rate:
2.10%
If the price index moves from 107 to 110, the rate of inflation is:
2.80%
Which of the following is included in the calculated Gross Domestic Product?
A local ice cream store sells $17,000 worth of cones and sundaes on July 1.
_________ is output per hour in the business sector.
Productivity
_____________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s.
The Industrial Revolution
In a market for a good, if there is a shift in supply (supply goes up). What happens to demand?
There is a movement down along the demand curve.
Match the terms with the actions
There is a movement up the demand curve-Quantity demanded goes down The demand curve shifts to the right-Demand goes up There is a movement down the demand curve-Quantity demanded goes up The demand curve shifts to the left-Demand goes down
Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect on the market for steel?
There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.
Choose the correct statement concerning natural disasters.
They create jobs, but destroy wealth
Increased investment alone will guarantee economic growth.
This is a false statement, because economic growth hinges on the quality and type of investment as well as the human capital and improvements in technology.
What is the definition of a shortage
When quantity demanded is greater than quantity supplied
Which of the following factors contribute to economic growth?
an increase in the proportion of the population that is college educated
Which of the following will not result in a leftward shift of the market demand curve for labor?
an increase in the wage rate
Another term used to describe negative inflation is:
deflation
The ____________ is the quantity where quantity demanded and quantity supplied are equal at a certain price.
equilibrium quantity
Improvements in the productivity of labor will tend to:
increase wages
__________ implies that pressure for price increases reaches across _______________markets, not just one.
inflation; most
Which of the following best describes a monetary policy tool?
interest rates
Which one looks at the big picture
macroeconomics
The unemployment rate may underestimate the true extent of unemployment if:
many part-time employees would like to work fulltime, but are unable to get the additional work.
To achieve a high standard of living, a nation should:
promote economic growth.
One factors that complicate the calculation of the inflation rate is:
quality bias sometimes called new product bias
A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis.
quantity supplied
The difference between nominal GDP and real GDP is:
real GDP adjusts for inflation
Economists typically measure economic growth by tracking:
real GDP per capita.
The nominal value of any economic statistic refers to the number that is actually announced at that time, while the ________________ refers to the statistic after it has been adjusted for inflation.
real value
Today the Broken Window Fallacy can similarly be applied to the fear of jobs being lost due to a rise in
robotics
Who wrote: "The Wealth of the Nations"?
Adam Smith
Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect:
Andy's demand for beer to increase.
The information that markets generate to guide the distribution of resources is called:
Price Signals
What does a budget constraint show?
Various combinations of goods or services an individual can purchase with their income.
The labor force consists of:
all adults who are working or actively seeking work.
The term "ceteris paribus" means that:
all variables except those specified are constant.
In macroeconomics, the connection from inputs to outputs for the entire economy is called _______________.
an aggregate production function
Which of the following are most likely classified by economists as consumer durable goods?
automobiles, furniture
The demand measure of GDP accounting adds together:
consumption, investment, government purchases, and trade balance.
A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle are:
expansion, peak, recession, trough
In the ______________, households receive goods and services and pay firms for them.
goods and services market
Final goods or services used to compute GDP refer to:
goods and services purchased by the ultimate users.
Karen chooses to go to university fulltime rather than to work. Karen:
is not part of the labor force.
A nation can achieve higher economic growth if:
it devotes more resources to research and development.
Inflation can be calculated in terms of how the overall cost of ___________________ changes over time.
the basket of goods
Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:
the benefit to his grades from studying for an hour
The opportunity cost of attending university is likely to include all except which of the following?
the cost of haircuts received during the school term
As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other good.
the production possibilities frontier
Macroeconomic topics do not usually include:
the profit maximizing decisions of an individual manufacturer.
which of the following is not counted as a part of GDP?
the purchase of 100 shares of AT&T stock by your grandfather.
When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________.
the quantity demanded of financial capital at any given interest rate will shift to the right.
If new manufacturers enter the computer industry, then (ceteris paribus):
the supply curve shifts to the right.
Which of the following is included in GDP calculations?
the university tuition paid to enroll in a course
GDP does not directly include:
the value of intermediate goods sold during a period.
What items could cause equilibrium quantity to go up
Demand goes up or supply goes up
Ethiopia has a GDP of $8 billion (measured in U.S. dollars) and a population of 55 million. Costa Rica has a GDP of $9 billion (measured in U.S. dollars) and a population of 4 million. Calculate per capita GDP for each country.
Ethiopia = $145.00 Costa Rica = $2250.00
Most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers.
Market-oriented economy
Frictional unemployment occurs when:
a worker decides to quit one job to seek a different job.
The _________________ argument points out that if an employer reacts to poor business conditions by reducing pay for all workers, then the best workers, with the best employment alternatives at other firms, are the most likely to leave and the least-attractive workers, with fewer employment alternatives, are more likely to stay.
adverse selection of wage cuts
To compare the GDP of two different countries with different currencies, it is necessary to use _________________________.
an exchange rate
In the Circular Flow Model do businesses demand or supply? (tricky question, think about it, there are two markets in the model)
both demand and supply
In the circular flow model looking at just firms and households. Do physical goods and money flow in the same direction?
false
The effects of inflation are seen in:
goods, services, wages and income levels
Which of the following is most likely to contribute to economic growth as measured by GDP per capita?
increased capital formation
A payment is said to be ________________ if it is automatically adjusted for inflation.
indexed
Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________.
law of demand
When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being:
low inflation
The demand curve for a typical good has a(n):
negative slope because some consumers switch to other goods as the price rises.
A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will:
shift to the right, decreasing the price of the drug
As the __________ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left.
technology
The most commonly cited measure of inflation in the United States is:
the Consumer Price Index (CPI).
Investment (I) includes:
the amount spent on new factories and machinery.
Which of the following is included in GDP?
the fees charged for a stock broker's services
Demand for a good goes up. Because of this the price of the good rise.
true
If measuring opportunity cost on a budget constraint line. Can the opportunity cost be less than one? Can it be one-half a good?
true
Is the budget constraint a visual of the opportunity cost between two goods?
true
The demand curve has a negative slope
true
Frictional unemployment is:
unemployment that is due to normal turnover in the labor market.
Scarcity exists because of:
unlimited wants and limited resources
In the market for labor. What happens to real wages when there is an increase in the demand curve?
will increase
If the number of employed persons in a country equals 24 million, the number of unemployed persons equals 8 million, and the number of persons over age 16 in the population equals 40 million, the unemployment rate equals:
25%
What is a chart that shows all possible combinations a country can produce of two different goods. It shows the trade off of producing more of one good over another one.
A Productions Possibility Frontier
When discussing economic growth, it is often useful to focus on ____________, to avoid studying changes in the size of GDP that represent only having more people in the economy, and focus on those increases in GDP which represent an actual rise in the standard of living on a per person basis.
GDP per capita
Which of the following best describes the relationship between economic growth and literacy?
Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education.
What name is given to the index based on the prices of exported or imported merchandise?
International Price Index
Match the changes with the outcomes. These are concerning shifts in supply and demand.
Price go down because of change in supply-Supply goes up Price go up because of change in demand-Demand goes up Price go down because of change in demand-Demand goes down Price go up because of change in supply-Supply goes down
Which of the following results in a rightward shift of the market demand curve for labor?
an increase in demand for the firm's product
Which of the following will not result in a rightward shift of the market supply curve for labor?
an increase in labor productivity
In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of:
buyers and sellers
Investment in human capital:
can be acquired through on-the-job training. is an important source of economic growth. is characterized by both b) and c).
Which of the following is not included in GDP?
cash income paid to a day laborer that is not reported to the tax authorities
Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories.
circular flow diagram
Is the product market(goods market) and the factor market(AKA resource market) the same thing?
false
In order to avoid double counting, statisticians just count the __________________.
final goods and services
Which of the following best describes a fiscal policy tool?
government spending
The basic difference between macroeconomics and microeconomics is that:
microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).
Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be.
normative statement
While one occasionally sees references to inflation over short time periods, the term typically implies a(n)_____________ in prices.
ongoing rise
A university student who is enrolled in school fulltime and not seeking employment is considered:
out of the labor force.
The �law of supply� functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied.
price
The value of what is produced per worker, or per hour worked, is called ____________.
productivity
If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ___________________
shortage or excess demand
