Econ Final

All of the following types of people are excluded from the survey conducted by the Bureau of Labor Statistics EXCEPT a. Retirees b. Children c. Soldiers d. Prisoners

A

An increase in the number of consumers in the market for chocolate would a. cause the demand curve to shift to the right. b. cause the demand curve to shift to the left. c. cause movement along the demand curve. d. cause the quantity demanded to increase.

A

An increase in the price of peanut butter will: a. Cause the demand curve for jelly to shift to the left. b. Cause the demand curve for jelly to shift to the right. c. Cause the demand curve for peanut butter to shift to the right. d. Cause the demand curve for peanut butter to shift to the left.

A

If scientists discover that eating bacon reduces cholesterol levels, a. The demand for bacon will increase. b. The demand for bacon will decrease. c. There will be fewer pounds of bacon consumed. d. There will be no effect on the consumption of bacon.

A

On a demand graph, a. Price is on the y axis; quantity is on the x axis. b. Price is on the x axis, quantity is on the y axis. c. Supply is on the x axis, price is on the y axis. d. Supply is on the y axis, price is on the x axis.

A

One major purpose of Federal Reserve monetary policy is to a. decrease the money supply when price level is rising. b. to adjust marginal tax rates downward when economic activity slows. c. increase production of necessary goods and services during times of shortage. d. to reduce government spending in the economy when price level is rising too fast.

A

The Federal Reserve System keeps price level stable by a. influencing the money supply. b. supervising and regulating the banking system. c. processing electronic payments for commercial banks. d. recommending changes to taxes and government spending.

A

The largest group of people counted as "not in the labor force" by the Bureau of Labor Statistics is a. Retirees b. Students c. Homemakers d. Discouraged Workers

A

The supply curve slopes upward because: a. There is a direct relationship between price and quantity supplied. b. There is an inverse relationship between price and quantity supplied. c. There is no relationship between price and quantity supplied. d. There is a direct relationship between price and supply.

A

Which of the following explain how the unemployment rate could rise even if employers have not eliminated jobs from their payrolls? (Choose all that apply.) a. College students graduate and begin seeking work. b. People quit their current jobs to seek ones paying a higher wage. c. Cuts in Social Security benefits force retirees to begin seeking work. d. Discouraged workers become more optimistic about finding a job and begin looking for work.

A

Which of the following inflationary situations could Federal Reserve monetary policy most directly address? Select all that apply. a. The increases in price level are caused by too much money circulating in the economy. b. Corn, a major input in food and energy production, suffers a drought forcing price level upwards. c. Higher wage demands by workers increase production costs and the price level of goods and services. d. Price level rises after sustained increases in the price of oil, a major input into many goods and services in the economy.

A

A decrease in the demand for a good causes a. a temporary shortage of that good. b. a temporary surplus of that good. c. permanent shortage of that good. d. a permanent surplus of that good.

B

A decrease in the supply for a good causes a. a temporary surplus of that good. b. a temporary shortage of that good. c. a permanent shortage of that good. d. a permanent surplus of that good.

B

All of the following activities would be included in the country's GDP EXCEPT a. cutting someone's hair at a hair salon b. washing the dishes after dinner at home c. fixing a customer's car at the auto repair shop d. baking cupcakes that are on sale at a grocery store

B

An increase in demand shifts the demand curve to the right resulting in a new equilibrium with: a. A higher price and a lower quantity. b. A higher price and a higher quantity. c. A lower price and a lower quantity. d. A lower price and a higher quantity.

B

An increase in prices is always due to inflation. a. True b. False

B

Choose all of the following items that would lower the potential GDP of a country. a. Production machinery is damaged and cannot be used. b. A large percentage of workers become elderly and can no longer work. c. Fewer people complete high school and college leading to lower worker productivity. d. A national recession lowers the number of goods and services produced in the economy.

B

Choose all of the options below that must be true for ANYONE counted as unemployed by the Bureau of Labor Statistics: a. Looking for a job b. Over the age of 16 c. Fired by previous employer d. Received no pay for work the previous month

B

Demand curves slope downward because there is: a. A direct relationship between price and quantity demanded. b. An inverse relationship between price and quantity demanded. c. No relationship between price and quantity demanded. d. A direct relationship between price and demand.

B

In a market economy, choices about what goods and services will be produced and at what prices they will be sold are made by a. The Federal Agency on Production and Prices (FAPP). b. Consumers and producers. c. The Federal Reserve. d. Congress.

B

In the United States, economic indicators are most often used to a. Set output targets for companies b. Measure the health of the economy c. Evaluate the effectiveness of government policies d. Make hiring decisions at the Bureau of Labor Statistics

B

Price level can be defined as a. the percent change in prices from one year to another year. b. the average of the current price of everything sold in our economy. c. the market value of goods and services produced in the economy in a given year. d. the annual cost of maintaining a particular standard of living within an economy.

B

Production done at home is not counted in gross domestic product because a. economists want people to work at companies not at home. b. there is no market price to calculate for work done for oneself. c. production done at home is not valuable to anyone except the person doing it. d. goods produced at home lack the quality control found in the commercial market.

B

Protecting the purchasing power of the dollar means a. keeping the price level constant at all times. b. ensuring that increases in price level will be gradual and predictable c. setting maximum prices for necessities so most people will be able to afford them. d. insuring everyone's bank deposits through the Federal Deposit insurance Corporation.

B

Sugar is an input used to produce candy bars. If the price of sugar increases: a. The supply of candy bars will increase. b. The supply of candy bars will decrease. c. There will be an increase in the demand for candy bars. d. There will be a decrease in the demand for candy bars.

B

The Federal Reserve's goals of price stability and maximum employment are sometimes called a. monetary policy b. the dual mandate c. open market operations d. supervision and regulation

B

The Law of Demand states that as a. As price increases, quantity demanded increases. b. As price increases, quantity demanded decreases. c. Price changes have no effect on quantity. d. Price changes shift the demand curve left or right.

B

The Law of Supply states that as a. As price increases, quantity supplied decreases. b. As price increases, quantity supplied increases. c. Price changes have no effect on quantity. d. Price changes shift the supply curve left or right.

B

The Law of Supply states that: a. Price changes shift the supply curve. b. As price increases, quantity increases. c. As price increases, quantity decreases. d. Price changes have no effect on quantity.

B

The two main economic goals pursued by the Federal Reserve are a. Economic security and economic growth b. Price stability and maximum employment c. Economic stability and economic freedom d. Maximum employment and economic security

B

When the economy is operating above its potential GDP, the Federal Reserve will most likely a. Increase the amount of dollars in circulation to boost economic activity. b. Decrease the amount of dollars in circulation to keep inflation under control. c. Pursue policies designed to decrease the unemployment rate in the economy. d. Do nothing since the economy is performing even better than everyone expected.

B

How often do government statisticians compute our country's GDP? a. every month b. every six months c. one time per year d. every three months

D

A new technology that reduces the cost of producing shoes would: a. Cause movement along the supply curve for shoes. b. Cause the supply curve for shoes to shift to the left. c. Cause the supply curve for shoes to shift to the right. d. Cause the quantity supplied of shoes to decrease.

C

An economy producing below its potential GDP most often results from a. high prices of production inputs b. corrupt government policies that stifle economic growth. c. low consumer demand for goods and services in the economy. d. loss of consumer purchasing power due to a high inflation rate in the economy.

C

At market equilibrium, a. The quantity of a good buyers are willing to buy is greater than the quantity sellers are willing to sell. b. The quantity of a good sellers are willing to sell is greater than the quantity buyers are willing to buy. c. The quantity of a good buyers are willing to buy is the same quantity that sellers are willing to sell. d. The supply of a good is equal to the demand for the good.

C

Inflation can best be described as a. an increase in the price of necessities. b. an increase in the purchasing power of the dollar. c. a rise in the average price level of goods and services. d. an increase in the amount of goods and services produced in the economy.

C

One negative aspect of inflation for the average consumer is a. wages and salaries rise. b. interest rates on savings rise. c. the purchasing power of income falls. d. the prices of assets, such as homes, rise.

C

Real Gross Domestic Product (RGDP) can best be defined as a. the average of all the prices of goods and services produced in the economy. b. the percent change in the price level of all goods and service produced in an economy in a given time period. c. the total value of all final goods and services produced in an economy in a given time period adjusted for inflation. d. the value of all final goods and services that could be produced in an economy in a given time period if all its capacity was utilized.

C

The Law of Demand states that a. Price changes shift the demand curve. b. As price increases, quantity increases. c. As price increases, quantity decreases. d. Price changes have no effect on quantity.

C

The employment rate is best represented by the formula a. The labor force divided by the adult population b. The number of employed plus the number of unemployed c. The number of employed divided by the labor force times one hundred d. The number of unemployed divided by the labor force times one hundred

C

When the economy is operating below potential GDP, the Federal Reserve is most likely concerned with a. a rising price level b. increasing inflation c. high levels of unemployment d. shortages of necessary goods like energy and food

C

With which of the following statements would most economists agree? a. Any increase in the inflation rate is bad for the economy. b. Increases in prices are always due to inflation in the economy. c. Gradual, predictable increases in the price level promotes economic stability. d. Increases in the inflation rate are fine as long as they are equal to increases in the GDP growth rate.

C

Imagine you are an economist in the country of Utopia. If the number of people in the adult, civilian, non-institutionalized people is 80, the number of employed people is 55, and the number of unemployed people is 5, then the unemployment rate for Utopia is a. 6.3% b. 6.9% c. 7.5% d. 8.3%

D

On a supply graph: a. Price is on the x-axis, supply is on the y-axis. b. Price is on the x-axis, quantity is on the y- axis. c. Supply is on the x-axis, price is on the y-axis. d. Quantity is on the x-axis, price is on the y-axis.

D

One group of people the Bureau of Labor Statistics includes in the "marginally attached" category is a. Retirees b. Homemakers c. Full Time Students d. Discouraged Workers

D

Read the scenarios below. Choose all of the situations describing someone who is part of the adult population, but not in the labor force. a. Priya was fired three months ago for excessive tardiness to work. Since then, she has been looking for another job but has not yet found one yet. b. Brandon is building an invention in his garage. Right now, he is not earning any income, but hopes to launch his new business next month. c. Josue is trained as a highly specialized medical researcher. Only one employer in the city hires his specialty and there are currently no openings. Josue is not currently looking for a job since he knows no one is hiring. d. Giselle worked at a local bank for 30 years and retired two months ago. She is planning a second career and is currently taking computer classes at the local community college. She hopes to seek a new job at the end of the semester.

D

The Alternative Measure of Labor Underutilization is a. the best way to find out what type of part-time jobs people hold. b. considered by economists to be more accurate than the unemployment rate. c. the best way to predict which job categories are going to grow and decline in the future. d. helpful in understanding the differences in the types of unemployment people are experiencing.

D

The cost of living refers to a. the current price level in the economy. b. changes in the price level from one year to the next. c. increases in wages and salaries based on the inflation rate. d. the amount of money needed to sustain a particular level of living.

D