Econ Exam 2 practice questions
The equation for GDP using the expenditure approach is
GDP = C + I + G + EX minus IM
Structural unemployment is the
The portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries.
The unemployment rate is
(labor force minus− employed)/labor force times× 100.
The unemployment rate equals
(labor force - employed)/labor force unemployed/labor force
If the labor force is 500 and employment is 450, then the unemployment rate is
10%
Employed-14,000 people Unemployed-3,000 people Not in the Labor Force-4,000 people The unemployment rate is?
17.6%
Employed -14,000 people Unemployed-3,000 people Not in the Labor Force-4,000 people The labor force equals?
17000
If Logan received a $2,500 bonus and his MPS is 0.20, his consumption rises by $________ and his saving rises by $________.
2,000; 500
If the labor force is 50 million and 48 million are employed then the unemployment rate is:
4%
Labor force participation rate - 60% Total pop 16 yrs of age & older 200 mil Unemployment rate 5% The total number of people unemployed is?
6 million
Employed-14,000 people Unemployed-3,000 people Not in the Labor Force-4,000 people The labor-force participation rate is?
80.9%
Employed-14,000 people Unemployed-3,000 people Not in the Labor Force-4,000 people The employment rate is?
82.4%
Which of the following groups over 19 years of age had the highest unemployment rate in the United States in 2015?
African American men
The total market value of all final goods and services produced within a given period by factors of production located within a country is
GDP
Which of the following is a topic studied in Macroeconomics?
GDP
Which of the following is included in both the U.S. GDP and GNP?
The value of all cars produced by General Motors in the U.S.
Saving equals
Y-C
Which of the following is an example of a final good or service?
a computer purchased by Federal express to track shipments
Which of the following is a good or service counted in GDP?
a new tire you buy for your personal car
A period when the economy shrinks is known as
a recession, contraction, and slump
Which of the following is a topic studied in Macroeconomics?
aggregate behavior of households and industries
Gross national product is the total market value of
all final goods and services produced by resources owned by a country, regardless of where production takes place
In a business cycle, a peak represents the end of ________ and a trough represents the end of ________.
an expansion, a recession
A structurally unemployed person is
an individual who cannot find a job because his or her job skills have become obsolete.
Unemployment means that
at the going wage rate, there are people who want to work but cannot find work
In a closed economy with no government, aggregate expenditure is
consumption plus investment.
Which prices are used to measure goods and services in calculating GDP?
current prices
When the Fed slows the rate of growth of the money supply to slow down the economy, the unemployment type that will be directly affected is the
cyclical unemployment
The demand for refrigerators falls when the economy enters a downturn. If a refrigerator manufacturer lays off workers during an economic downturn, this would be an example of
cyclical unemployment.
Higher interest rates are likely to
decrease consumer spending and increase consumer saving.
Uncertainty about the future is likely to
decrease current spending.
When an individual quits his/her job and decides to stay at home for a while, the labor-force participation rate
decreases.
A prolonged and deep recession is called
depression
A period during which aggregate output rises is known as a(n)
expansion
When an economics professor quits his/her job at a university and starts looking for a better job in another university, he/she is
frictionally unemployed.
A period of very rapid increase in the overall price level is known as
hyperinflation
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.
An increase in the overall price level is known as
inflation
The term 'stagflation' was created in the 1970's to describe an economy experiencing both
inflation and economic stagnation
If the MPS is .60, MPC
is .40.
Discouraged workers are
not considered as part of the labor force
Double counting can be avoided by
not counting the value of intermediate goods in GDP
Inflation is an increase in
overall price level
Consumption is
positively related to household income and wealth and households' expectations about the future, but negatively related to interest rates.
The mechanism that normally coordinates what goes on in an economy is the
price system
The period in the business cycle from a peak to a trough is a
recession, slump and contraction
Unemployment generally ________ during recessions and ________ during expansions.
rises, falls
The demand for corn has increased in May without any change in supply. Eight months later there still has been no change in corn prices. This is an example of a
sticky price
An individual who cannot find a job because his or her job skills have become obsolete is an example of
structural unemployment.
Telephone operators who have lost their jobs as a result of computerized switchboards are an example of
structural unemployment.
The natural rate of unemployment is generally thought of as the
sum of frictional unemployment and structural unemployment.
The data in the national income and product accounts are compiled by
the Bureau of Economic Analysis.
Profits earned in the United States by foreign-owned companies are included in
the U.S. GDP but not GNP.
Which of the following would be counted in 2016's GDP?
the bonus check a stockbroker gets from his/her company in 2016
The MPC is
the change in consumption divided by the change in income.
The MPS is
the change in saving divided by the change in income.
Which of the following is an example of an intermediate good?
the chocolate chips you purchase to make cookies to sell at a bake sale for your kids' school the pizza sauce you purchase to make pizzas to sell for a fund-raiser for an organization you belong to
The number of people unemployed equals
the labor force minus the number of people employed
Which of the following would not be counted in 2016's GDP?
the value of a 2008 boat you purchase from a boat dealer in 2016 the value of a motor that is used in the production of a lawn mower
Gross domestic product measures
the value of all output in the economy. the total income of everyone in the economy. the total spending of everyone in the economy.
If no foreign companies produce in a country, but many of the country's companies produce abroad, then
the country's GNP will tend to exceed its GDP.
In a business cycle, the end of a recession is represented by
trough
Value added is the difference between the value of good as they leave a stage of production and cost of the goods as they entered that stage of production.
true
It has become conventional to classify an economic downturn as a recession when aggregate output declines for
two consecutive quarters
The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese ________.
GNP; GDP
