test 1

Which statement about long-run economic growth is true? A. It is likely to occur when obstacles preventing resources from being used are reduced. B. It is likely to occur when the capacity to produce goods and services increases. C. It is easier to achieve than short-run economic growth. D. It occurs when an economy makes use of underutilized resources.

It is likely to occur when the capacity to produce goods and services increases

Which statement about long-run economic growth is true? A. It is likely to occur when obstacles preventing resources from being used are reduced. B. It is likely to occur when the capacity to produce goods and services increases. C. It is easier to achieve than short-run economic growth. D. It occurs when an economy makes use of underutilized resources

It is likely to occur when the capacity to produce goods and services increases.

What is long run growth?

OCCURS WHEN AN ECONOMY FINDS NEW RESOURCES OR FINDS WAYS TO USE EXISTING RESOURCES BETTER

What is short term growth?

OCCURS WHEN AN ECONOMY MAKES USE OF EXISTING BUT UNDERUTILIZED RESOURCES. IT IS COMMON DURING RECOVERY FROM A RECESSION

How do you measure unemployment

The number of people unemployed / The labor force

The local Chevrolet dealership has an increase in inventory of 25 cars in 2006. In 2007, it sells all 25 cars. Which of the following statements is correct?

The value of the cars in inventory will be counted as part of 2006 GDP, and the value of the cars sold in 2007 will not increase 2007 GDP.

Which of these statements is NOT true of nations that have higher levels of economic freedom? A. These countries have high growth rates. B. Individuals and businesses can make investment and production decisions freely. C. They have high levels of government integrity and judicial effectiveness. D. These countries have low per capita gross domestic product (GDP per capita).

These countries have low per capita gross domestic product (GDP per capita).

In a simple circular-flow diagram, total income and total expenditure are _________

always equal because every transaction has a buyer and a seller.

The consumption component of GDP includes spending on __________

durable goods, nondurable goods, and services

How do you find the natural rate of unemployment

frictional unemployment + structural unemployment

What is one of the reasons that property rights are important for economic development is that without legal ownership? A. consumption will be lowered. B. money cannot be passed along to heirs C. no one will plant flower gardens. D. loans are very difficult to obtain.

loans are very difficult to obtain

We are MOST likely to see a recession if interest rates on long-term bonds are A. higher than interest rates on short-term bonds. B. the same as interest rates on short-term bonds. C. rising. D. lower than interest rates on short-term bonds.

lower than interest rates on short-term bonds.

Suppose an economy has historically grown at a rate of 1.25%. Economic activity decreased every quarter over the past year, but the decline stopped this quarter. The economy is expected to grow at a rate of 1.4% in the near future, but monetary authorities are concerned that inflation may increase. This economy is probably in the _____ stage of the business cycle.

trough; followed by the peak and the the cycle begins again leading to peak, recession, through, recovery, peak...

If Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself, then GDP

will fall; because that is one less service/product being contributed to the nation GDP