ECO101

If the Consumer Price Index changes from 120 in year one to 150 in year two, the rate of inflation in the intervening year is

25 percent

Suppose the city of Julian has a population of 100,000 and a labor force of 75,000. Employment is 70,000 and 5,000 workers are unemployed. How many people are not in the Labor Force?

25,000

If a country's labor force is 12.5million people, and .5 million are unemployed, the country's unemployment rate is

4 percent

A rightward shift in the supply curve for a product could be caused by all of the following except one. Which is the exception?

A decrease in the price of a productively related product

A theory may contain all but which of the following?

A normative statement expressed as a functional relation.

Which of the following factors will shift the demand curve left?

An increase in income if the product is an inferior product.

An example of transfer payment is

Federal Government Pension Plan Payments

What is the effect of an increase in the price of a productive resource?

It will cause a decrease in the supply of the product

What is the effect of a decrease in the supply of a product?

It will cause an increase in the price but a decrease in the quantity traded.

What is the effect of a shortage?

It will cause an increase in the price leading to an increase in the quantity supplied and a decrease in the quantity demanded

What is the effect of an increase in the price of coffee?

It will lead to an increase in the demand for tea.

Suppose the government imposes a price ceiling on a good above its equilibrium price. Which of the following is a likely result?

No change will occur in the market

Which one of the following people would be considered officially unemployed?

One who is a student and has been looking for an after-school job every day for the past month.

What is the distinction between a positive and normative statement?

Positive statements are assertions that can be tested with data while normative statements are based on a value system of beliefs.

How will a change in income affect the demand for an inferior product?

The demand will increase if the income of consumers decreases.

Tom had only $16 to spend this last weekend. He was, at first, uncertain about whether to go to two movies he had been wanting to see or to buy a new CD he had recently heard about. In the end he went to the movies. Which of the following statements is correct?

The opportunity cost of the two movies is one CD

If the general price level is p1 in a given period and p2 in a subsequent period, the inflation rate is calculated as

[(p2-p1)/p1]x100

Inflation is defined as

a sustained upward trend in the average price level

Macroeconomics studies

aggregated data

Which of the following would not result from a price ceiling?

an increase in supply

Price floors

cause surpluses when they are effective AND are effective when they are above the equilibrium price.

Real nation income is also known as

constant-dollar national income

In comparison to nominal GDP, real GDP refers to nominal GDP

corrected for price level changes

Which one of the following gives the correct order of the sequence of business cycle phases?

expansion, peak, contraction, trough

Economic predications are intended to

forecast the behavior of groups of individuals

Nominal GDP

is calculated by valuing output at the prices that prevailed during the time period in question, and therefore is also called the CURRENT dollar GDP

Full employment

is thought by some economists to be consistent with the fact that there is a job for everyone who desires to work

A price ceiling is a government-mandated

maximum price above which legal trades cannot be made

In what way are products A and B related if an increase in the price of product A leads to a decrease in demand for product B?

the two products must be complements

A nation's real national income in a given year measures

the value of national output produced by the economy, measured in constant dollars.

The cyclical unemployment rate is defined as

unemployment due to fluctuations in the business cycles

An expansion in the business cycle is

when there is a speed-up in the pace of economic activity