ecomonics exam 2

which person can be categorized as a discouraged worker?

Andy friese was formerly employed at Mama's Used Cars. He has not worked there for six months and has given up looking for work.

which transaction is not included in gross domestic product?

Francis receives her social security check.

which of the following is NOT an example of the need to borrow to finance large investments?

Jamie pays for college by working two jobs on the weekends.

which of the following is considered unemployed?

John, on temporary layoff from his work, awaits recall.

economics is characterized by many statistics and measurements. Suppose that an analyst is interested in comparing the economy of today with the economy ten years ago. Which term is least likely to be useful for this purpose?

Normal GDP.

Akemi, who is a Japanese citizen, works in the United States as a computer programmer. The value of her output is included in:

U.S. GDP and Japan's GNP.

a binding and effective interest rate ceiling creates ________ loanable funds.

a shortage of.

which statements is the best description of a business cycle?

alternating periods of increasing and decreasing economic output.

consider an economy that is operating at its steady state. an increase in the investment rate in this economy will lead to:

an increase in the growth rate of output in the short run but zero growth in output in the long run.

a set of tires installed on a vehicle produced by an automobile factory is counted as:

an intermediate good and its market price is not part of GDP.

the source of the ____ for loanable funds is investment.

demand.

the labor force consists of:

employed workers and adults who do not have jobs but who are looking for work.

someone who recently moved to florida because of its warmer climate will need to spend some time looking for a new job. This is an example of:

frictional unemployment.

all else equal, which hypothetical scenario exhibits a country with the most economic growth?

froland, a country that resolves most trials and legal issues within a year.

a business that pays for it's workers to attend a technical college is increasing its:

human capital.

if the supply of loanable funds increases and the demand for loanable funds increases at the same time, interest rates will:

increase, decrease, or remain the same.

according to the Solow growth model, which of these would not increase economic output in a developing nation?

increasing their government ownership of agricultural land.

suppose that congress decided to exempt seniors from paying income tax on labor income. what would happen to the labor force participation rate for seniors?

it would increase.

which of the situations is an example of the crowding-out effect on investment as it pertains macroeconomics?

jack wants to borrow money to create cowboy-themed inflatable bounce house for kids called "Wild Wild West." However, the government is running a deficit which has increased interest rates so much that jack can no longer afford to borrow the money.

which of the following would be considered unemployed?

janice, who graduate from the university in May, is waiting for her new job to start in July.

laws that make it more difficult (and more expensive) to fire workers:

lead to higher rates of long-term unemployment.

many people say that if people save more, that is bad for the economy. they say that spending money on consumer goods keeps the money moving through the economy. does the Slow model say that?

no, a higher savings rate is good for the economy.

suppose the country of Altaria only produces one style of good, pink tutu. Last year, nominal GDP was $50,000 and this year it is $200,000. What can be definitively concluded?

none of the statements are necessarily true.

if two countries have the same steady-state levels of output, the country that is ________ today will ________ in per capita output.

poorer; catch up.

minimum wage laws and unions tend to:

raise wages and raise unemployment.

consider a hypothetical model for the loanable funds market. suppose that the government decides to reduce the federal Goods and Services Tax (GST). how does this tax reduction impact investment and why? The tax reduction:

reduces investment because lowering the GST reduces savings.

when workers lose their jobs and become officially unemployed, the number go people in the labor force:

remains constant.

A worker repairing VHS cassette-tape players was laid off because most of his customers have started using DVD players and streaming services. This worker is now:

structurally unemployed.

If the recent financial crisis raises awareness about the dangers of not saving, leading to an increase in overall savings rates across the country, the loanable funds market will experience an increase in the ______ loanable funds and ______ in equilibrium interest rates.

supply of; a decrease.

a rural village in a developing country has an economy based on agriculture. then the government of the country provides the village with newly developed hybrid seeds that more than double the agriculture yield per acre. this story illustrates the growth of per capita GDP in the village through which factors of production?

technological knowledge.

which of the following do economists consider an investment?

the construction of a new factory.

suppose a doctor spends half of the year in the United States and the other half in Canada and works in both places. How does his production get allocated between U.S. and Canadian GDP?

the value of the services produced in Canada gets counted in Canadian GDP.

for the most recorded history, economic growth has been:

virtually nonexistent.