Econ final 2

If technological change increases the profitability of new investments for firms, then the _______ curve for loanable funds will shift to the ____________ A) demand, right B) supply, right C) demand, left D) supply, left

A

If the GDP deflator is 142, by how much have prices changed since the base year? A) prices have increased by 42% B) prices have decreased by 4.2% C) prices have increased by 58% D) prices have increased by 142%

A

In a small economy, consumption spending is $6,000, government purchases are $1,200, gross investment is $1,500, exports are $2,000, and imports are $1,000. What is gross domestic product? A) $9,700 B) $9,000 C) $10,000 D) $11,700

A

Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about: A) one-half to one percentage point. B) one quarter percentage point. C) one and one-half percentage points. D) one to two percentage points.

A

National income equals gross national product minus A) depreciation B) changed in inventory C) imports D) inventories

A

Gross domestic product understates the total production of final goods and services because of the omission of: A) inflation B) household production C) intermediate goods D) exports

B

If the nominal interest rate is 6% and the inflation rate is 2%, then the real interest rate is: A) 8% B) 4% C) 3% D) 2% E) 1%

B

Potential GDP was estimated to grow at a rate of 3.2% from 1949-2017 in the United States. Actual GDP in the US: A) Always grows at a slower rate than potential GDP B) is the same as potential GDP if all items in the economy were working at capacity C) always grows at a faster rate than potential GDP D) always grows at the same rate as potential GDP

B

Table 9-17. Looking at the table shows, real average hourly earnings in 2017 were: A) $3.67 B) $5.63 C) $10.24 D) $11.37

B

The quantity of goods and services that can be produced by worker on by one hour of work is referred to as: A) human capital B) labor productivity C) real GDP D) technology

B

The size of the underground economy would tend to increase if the government of a country: A) decreased government regulations on business. B) Increased income tax rates C) legal marijuana D) legalized prostitution

B

Which of the following statements is true? A) household production is counted in GDP as it amounts to real production. B) GDP accounting rules do not adjust for production that pollutes the economy C) a decrease in the crime rate increase GDP as people will spend more on security. D) GDP growth distributes income equally to people in the economy

B

If the number of unemployed workers is 19 million, the number in the working age population is 500 million, and the unemployment rate is 4%, what is the labor force participation rate?

C

The budget deficit is defined as: A) T-(G+TR) and this is positive B) T+(G+TR) and this is negative C) T-(G+TR) and this is negative D) T-(G-TR) and this is negative

C

Typically, as an economy begins to emerge from a recessionary phase of the business cycle: A) investment begins to fall B) unemployment falls immediately C) unemployment continues to rise D) inflation begins to fall

C

If the number of unemployed workers is 200 million, the number of employed workers is 300 million, and the working-age population is 800 million, what is the labor force participation rate? A) 0.4% B) 4% C) 14% D) 40%

D

National income is equal to: A) GNP plus depreciation B) disposable personal income plus depreciation plus personal taxes C) personal income minus personal taxes D) GDP minus depreciation.

D

Refer to Table 8-3. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals A) $2,200 B) $1,600 C) $1,400 D) $1,200

D

Refer to table 10-2. Using the table above, what is the approximate average annual growth rate from 2015 to 2018? A) -1% B) 1% C) 2% D) 4%

D

The labor force participation rate is defined as: A) the percentage of the labor force that is employed B) the percentage of the working-age population that is unemployed C) the percentage of the labor force that is unemployed D) the percentage of the working-age population in the labor force E) the percentage of the working-age population that is employed

D

The measure of production that values production using current prices is called: A) underground GDP B) real GDP C) value-added GDP D) nominal GDP

D

The "new production bias" in the consumer price index refers to the idea that: A) new products' prices often decrease after their initial introduction, and the CPI is adjusted infrequently and overestimates the cost to consumers. B) consumers prefer new goods, even if they are worse in quality than old goods, and this causes the CPI to underestimate the cost to consumers. C) consumers switch to old goods when the prices of new goods increase, and the CPI underestimates the cost to consumers. D) consumers switch to new goods when the prices of old goods increase, and the CPI overestimates the cost to consumers.

A

The underground economy can be described as: A) economic activity that is hidden from the government to avoid taxes or because the activity is illegal. B) production of intermediate goods and services c) economic production that includes mining D) production of infrastructure that spurs growth in the rest of the economy.

A

Us gross national product is defined as: A) the value of final goods and services produced by residents of the United States even if the production takes place outside of the United States. B) the value of final goods and services produced outside of the United States C) the value of final goods and services produced within United States D) the value of final goods and services produced within the United States, by United States residents.

A

Which of the following could cause nominal GDP to increase next year, but real GDP to decrease? A) the price level rises and the quantity of final goods and services produced falls. B) The price level falls and the quantity of final goods and services produced falls. C) the price level rises and the quantity of final goods and services produced rises. D) the price level falls and the quantity of final goods and services produced rises.

A

Which of the following would be a consequence bias in the CPI? A) the inflation rate based on the CPI would underestimate the true level of inflation. B) Businesses would overcompensate employees for inflation when giving cost of living raises. C) Social Security payments would not adequately compensate retires worker for inflation. D) Judges would award child support payments that would not adequately keep up with the true cost of tuition.

B

A firm can fund an expansion of its operations by: A) buying stock B) loaning money C) issuing bonds D) paying dividends

C

A student who just graduated from college but has not found a job would most likely be: A) cyclically unemployed B) seasonally unemployed C) frictionally unemployed D) structurally unemployed

C

Disposable personal income is defined as: A) personal income less transfer payments plus personal taxes. B) personal income less personal taxes plus indirect sales taxes C) personal income less personal taxes D) personal income less depreciation

C

If the federal government implements programs so that unemployed are more quickly matched with jobs, then A) the natural rate of unemployment will increase. B) the natural rate of unemployment could either increase or decrease. C) the natural rate of unemployment will decrease. D) the natural rate of unemployment will not change.

C

Which of the following individuals would be most negatively affected by anticipated inflation? A) a union contractor whose pay is adjusted based on changes in the CPI B) a student who borrows $10,00 at a nominal interest rate of 5% to finance educational expenses C) a full time employee at a pizza parlor who makes more than the minimum wage D) a retired railroad engineer who receives a fixed income payment every month

D

Table 9-9. Suposse that the data in the table above reflect the price levels in the economy. Given the data, we can say that the cost of living rose by ________ between 2017 and 2018? A) 2% B) 5% C) 8% D) 11% E) 13%

E