Econ Quiz #3

Including intermediate goods in the GDP calculation is:

double counting.

A wage offered by an employer as an incentive for more work effort and performance and that exceeds the equilibrium wage rate is known as a(n) _____ wage.

efficiency

People who are changing jobs are counted in _____ unemployment.

frictional

Increases in the average level of prices are called:

inflation.

During rapid price inflation, firms must frequently change prices. The cost of changing listed prices is known as the _____ cost.

menu

The sum of frictional and structural unemployment is the:

natural rate of unemployment.

A country's exports minus its imports during a period are:

net exports.

The GDP deflator is equal to:

nominal GDP divided by real GDP times 100.

To be officially unemployed, a person must:

not have a job and must have looked for work in the past four weeks.

You are a college student and not working or looking for work. You are:

not part of the labor force.

Income divided by the price level is _____ income.

real

Inflation is a(n):

rising aggregate price level.

When hyperinflation forces Emily to visit her bank very frequently to keep her cash holdings to a minimum, economists say that Emily has a:

shoe-leather cost.

Private saving by households is:

the portion of disposable income not spent on goods and services.

In a market basket of goods:

the quantities stay constant and the prices may change.

A transfer payment is a payment for:

which no services were rendered.

Suppose a consumer buys a Perfect Pizza frozen cheese pizza at the grocery store for $10. Perfect Pizza purchased the dough and tomato sauce from a food processing company for $2 and bought the cheese for $1. It sold the pizza to the store for $5. How much has GDP increased?

$10

You read in the newspaper that the consumer price index in 2011 was 120. You conclude that a typical market basket in 2011 would have cost _____ more than the same market basket purchased in _____.

20%; the base year

Stock in a company is:

a share of ownership of the company.

Anticipated inflation affects:

all aspects of the economy.

Real GDP per capita is:

an incomplete measure of a country's standard of living.

Which of the following is considered to be an IOU?

bond

Government economists have adopted the _____ method of calculating the change in real GDP, which averages the GDP growth rate according to both an early base year and a late base year.

chain-linking

The consumer price index reflects:

changes in the prices of goods and services typically purchased by consumers.

The natural level of unemployment contains no_____ unemployment.

cyclical

A drop in the inflation rate is called:

disinflation