Econ 202 midterm
A company produced 8 dishwasher machines in 2010. The company sold 6 in 2010 and added 2 to its inventories. The market value of the dishwasher machines in 2010 was $200 per unit. What is the value of this company's output that will be included in the 2010 GDP?
$1600
A company produced 5 dishwasher machines in 2010. The company sold 6 in 2010 (by selling 1 dishwasher machine from their inventory from last year.) The market value of the dishwasher machines in 2010 was $100 per unit. What is the value of this company's output that will be included in the 2010 GDP?
$500
An economics professor is discussing a measure of inflation over time based on all the components of GDP. Which measure is it?
GDP Deflator
Trade deficit means
Imports higher than exports
According to the Financial Times article "Rise in corporate market power offers clues to feeble wage growth," why high profit margins for companies can worsen inequality in the US?
Those firms with high margins tend to pay less wages according to many studies.
Income Mexican citizens earn in the U.S. counts in
U.S GDP
From the Washington Post article "Seattle's higher minimum wage is actually working just fine," which study findings conform with our WS-PS model regarding the effect of minimum wage hike on employment?
University of Washington 's findings
Which of the following is an example of a final good or service?
a computer purchased by Federal Express to track shipments
Suppose that the US federal allows firms in several industries to merge with each other, which consequently increased monopoly power for those companies. Given this information, we would expect to observe which of the following?
a downward shift in the PS curve
A decrease in the minimum wage will tend to cause which of the following?
a downward shift in the WS curve
A reduction in unemployment benefits will tend to cause which of the following?
a downward shift in the WS curve
For you to be considered out of the labor force, you can be
a full-time volunteer, full-time student, and a full-time retiree.
Suppose the actual unemployment rate increases. This will cause
a movement along the WS and the PS curves.
Which of the following is a good or service counted in GDP at a current year?
a new tire you buy for your personal car
Based on our understanding of the labor market model WS-PS, we know that an increase in the minimum wage will cause
a reduction in equilibrium employment
According to Robert Allen, an economic historian, why industrial revolution took place in England?
a rise in labor cost
According to the Planet Money podcast (see Lesson), besides Simon Kuznets, who else that also made a critique about the concept of GDP? (Hint: his video can be found so easily on Youtube)
Robert Kennedy
According to the Planet Money podcast (see Lesson), who firstly developed the estimation of GDP?
Simon Kuznets
The increased ability of humans to provide light, grow food, and communicate information are all examples of:
Technological progress
When the textbook refers to "history's hockey stick", it is referring to:
The increase in growth of real GDP per capita that many countries have experienced at some point after the 19th century.
Based on our understanding of the labor market model WS-PS, we know that an increase in the minimum wage will cause the results as two answers above. The main reason is
The model assumes that demand or labor demand is constant.
What is GDP per capita?
The total amount of goods and services produced within a country in a year per person.
Okun's Law describes the relationship between GDP growth and the change in unemployment such that when GDP growth is high:
The unemployment rate is falling.
According to the Financial Times article "Rise in corporate market power offers clues to feeble wage growth," what the author thought about the wage growth of 2.7% in 2018 compared to US companies' profit margins?
The wage growth was lower since profit margins kept rising for many years.
From the Washington Post article "Seattle's higher minimum wage is actually working just fine," what researchers from the University of Washington found about an increase in minimum wage in Seattle?
an increase in minimum wage led to a reduction in employment
Based on wage setting behavior, we know that a reduction in the unemployment rate will cause
an increase in the real wage
Based on wage setting behavior, we know that a reduction in the unemployment rate will cause
an increase in the real wage.
Suppose that increased international trade makes product markets more competitive in the U.S. Given this information, we would expect to observe which of the following?
an upward shift in the PS curve
An increase in the minimum wage will tend to cause which of the following?
an upward shift in the WS curve
An increase in unemployment benefits will tend to cause which of the following?
an upward shift in the WS curve
From the Brooking Institute article about a fall in labor force participation, how much the participation rate decreased since the peak in 1990s?
around 5%
Which of the following are most likely classified by economists as consumer durable goods?
automobiles, furniture
According to the Washing Post article (see Lesson), Joel Mokyr, an economic historian, claims that the Chinese bureaucratic system in the past was progressive in some aspects. Why?
because it's a meritocracy since they have an examination.
According to NPR Planet Money: The price of lettuce in Brooklyn, why the BLS never called the restaurants or stores to check the prices, or look up the prices on the internet?
because they really want to check very specific items that most store owners do not have time to help them.
In the US, trade surplus could be observed______
before 1980s
From the Brooking Institute article about a fall in labor force participation, what do the prime-age men and women participation rates look like since 2000s?
declining
According to the Okun's Law, during the 1990s economic boom, we can expect that the unemployment rate should _______.
decrease
When the Okun's Law does NOT hold, it implies that __________.
economic growth does not translate into job creation.
James is a high school student. James works as a part-time employee after school at a fast food restaurant. James is categorized as __________
employed
Lisa spends most of her time taking care of her home and children, but she helps in her husband's computer software business all day on Friday, Saturday, and Sunday. Lisa is counted as __________.
employed
According to NPR Planet Money: The price of lettuce in Brooklyn, what does the headline Consumer Price Index (CPI) include?
everything from the market
According to NPR Planet Money: The price of lettuce in Brooklyn, what does the core Consumer Price Index (CPI) include?
everything from the market excluding food and oil
Consumption is the purchase of goods and services by:
households.
According to the Financial Times article "Rise in corporate market power offers clues to feeble wage growth," what is the markup rate?
how much they charge above their cost.
Nominal GDP measures the value of all goods and services
in current dollars.
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.
According to the Okun's Law, in the midst of economic recession, such as in 2008-2009, we can expect that the unemployment rate should _______.
increase
According to the Financial Times article "Rise in corporate market power offers clues to feeble wage growth," what De Loecker and Eeckhout found about the markups between 1980 and 2016?
increase almost 50%
Shares of personal consumption in GDP has been ________ since 1980s in the US.
increasing
From the Brooking Institute article about a fall in labor force participation, what does the prime-age men participation rate looks like before 1990s?
it decreased
From the Brooking Institute article about a fall in labor force participation, what does the prime-age women participation rate looks like before 1990s?
it increased
Based on our understanding of the labor market model WS-PS, we know that an increase in the minimum wage will cause
no change in equilibrium real wage
Based on price setting behavior, we know that a reduction in the unemployment rate will cause
no change in the real wage
Based on price setting behavior, we know that a reduction in the unemployment rate will cause
no change in the real wage.
From the Washington Post article "Seattle's higher minimum wage is actually working just fine," what researchers from the UC Berkeley found about the effects of minimum wage hike?
no employment effect
If the GDP deflator is greater than 100, then
nominal GDP is greater than real GDP.
From the Washington Post article "Seattle's higher minimum wage is actually working just fine," is the minimum wage increase considered to be an increase in nominal wage or real wage?
nominal wage
The _____________ is set by the firm in dollars while the ___________ describes how much the wage can buy for the worker.
nominal wage; real wage
In a price-setting relation, there is a _________ relationship between real wage and employment.
non-existent
Katherine has been thinking about looking for work in the past four weeks, but there was no specific effort she has made. Katherine is counted as _________.
not in labor force
In the wage setting relation, there is a __________ relationship between real wage and employment.
positive
If real GDP in 2010 using 2009 prices is higher than nominal GDP of 2010, then
prices in 2010 are lower than prices in the base year.
The GDP deflator is the
ratio of nominal GDP to real GDP multiplied by 100.
Suppose the actual employment rate increases. This will cause the PS curve
stay constant (move along the curve)
With the real wage on the vertical axis and employment (N) on the horizontal axis, we know that
the PS is horizontal
With the real wage on the vertical axis and employment (N) on the horizontal axis, we know that
the WS curve is upward sloping.
Investment (I) includes:
the amount spent on new factories and machinery.
The number of people unemployed equals
the labor force minus the number of people employed.
Inflation is an increase in
the overall price level.
Which of the following is an example of an intermediate good?
the pizza sauce you purchase to make pizzas to sell for a fund-raiser for an organization you belong to
Which of the following is not counted as a part of GDP?
the purchase of 100 shares of AT&T stock by your grandfather.
In the wage-setting relation, the nominal wage tends to decrease when
the unemployment rate increases
In the wage-setting relation, the nominal wage tends to decrease when
unemployment benefits decrease.
Diane lost her job and immediately started looking for another job. As a result the
unemployment rate increases.
Okun's Law is an empirical observation that shows that the change in the ___________ falls when __________ is faster.
unemployment rate; GDP growth
The GDP deflator in year 2 is 110 using year 1 as a base year. This means that, on average, the price of goods and services is
10% higher in year 2 than in year 1.
If nominal GDP in 2001 is $18 trillion and real GDP is $15 trillion, the GDP deflator in 2001 is
120
If 2009 is the base year, the bundle price of goods in 2009 is $500, and the bundle price of goods in 2010 is $700, the 2010 consumer price index is
140
If nominal GDP in 2001 is $18 trillion and real GDP is $15 trillion. Suppose we use 2000 as the base year, what is the inflation rate between 2000 and 2001?
20%
Between 2000-2002, GDP per capita of Spain grew at 2% per year. If GDP per capita equals to $25,000 in 2000, GDP per capita in Spain equals to $................... in 2002.
26010
According to the Financial Times article "Rise in corporate market power offers clues to feeble wage growth," what is the relationship between the market power and innovation found by the IMF?
Firms with high market power, due to concentrated companies, tend to invest less.
According to the Planet Money podcast (see Lesson), who's the first US president that mentioned the concept of GDP on the radio?
Franklin D. Roosevelt
The price setting equation is represented by the following: P = (1+m)W. When there is perfect competition (firms have no power), we know that m will equal
0
The price setting equation is represented by the following: P = (1+m)W. When firms have very high market power, m would equal to
0.9
If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 620,000, what is the unemployment rate?
3.1%
Between 2005-2007, GDP per capita of Greece reduced at 5% per year. If GDP per capita equals to $35,000 in 2005, GDP per capita in Greece equals to $................... in 2007.
31587.5
If 2009 is the base year, the bundle price of goods in 2009 is $500, and the bundle price of goods in 2010 is $700, the inflation rate between 2009 and 2010 is
40%
If real GDP per capita grows from $10,000 to to $10,500, then the growth rate is:
5%
The GDP per capital of China was $10,000 in 2017 and $10,500 in 2018. The growth rate of GDP between 2017 and 2018 was equal to...............
5%
The GDP deflator in year 2 is 95 using year 1 as a base year. This means that, on average, the price of goods and services is
5% higher in year 1 than in year 2.
Consumption in the United States is about ____________ of GDP.
68%
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%.
If the labor force is 320,000 and the total population 16 years of age or older is 400,000, the labor-force participation rate is
80%
The largest component of the expenditure side of GDP in the United States is:
Consumption
The correct formula to calculate GDP based on its spending components is:
Consumption + Investment + Government Spending + Exports - Imports
According to the Washing Post article (see Lesson), Joel Mokyr, an economic historian, thinks that scientists before the Industrial Revolution began to apply scientific knowledge to crack problems. This is what he called......
Industrial Enlightenment
Private property, markets, and firms are the key __________ shared by all capitalist economies.
Institutions
The most volatile component of GDP in the United States and Europe is
Investment
