ECON Test 2
Who of the following is counted as "unemployed" by the Bureau of Labor Statistics?
someone on temporary layoff
If Real Interest Rate is 10%, and inflation is 4%, then nominal interest rate is:
14%
Suppose the economy is closed with national saving of $3 trillion, consumption of $10 trillion, and government purchases of $4 trillion. What is GDP?
17 trillion
If Y = 2000, G=750, I= 300, for a closed economy. Let Net Taxes =T =150. Then C =
950
A two variable graph of number of hours you study per week for Economics, and the score you receive on the course, will show:
A positive slope, representing that as hours studied increase, score increases.
Who of the following are included in the Bureau of Labor Statistics' "employed" category?
All of the above are correct.
savers to borrowers.
At the broadest level, the financial system moves the economy's scarce resources from
In the M LF, everything else remaining constant, if the Demand of funds decreases, it implies:
Demand of LF will shift to the left.
The primary economic function of the mutual funds is to
Diversify an investor's portfolio of stocks and bonds
Ethan purchases a new house for $170,000. Ethan's purchase of the house contributes $170,000 to which magnitude in the identity Y = C + I + G?
I
In the market for Loanable Funds (henceforth called M LF), the product being bought and sold is:
Money, in the form of loanable funds
their investments are being financed by someone else's saving.
Most entrepreneurs do not have enough money of their own to start their businesses. When they acquire the necessary funds from someone else,
If a 2 variable graph is a flat horizontal line, it shows that
One of the two variables does not change even when the other changes.
In the M LF, everything else remaining constant, if the Supply of funds increases, it implies:
Supply of LF will shift to the left.
16 years old
The Bureau of Labor Statistics counts a member of a surveyed household as an adult if that person is at least
60,000
The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of about
Natural Rate of Unemployment
The amount of unemployment that an economy normally experiences is called the
Which of the following could explain an increase in the interest rate and the equilibrium quantity of loanable funds?
The demand for loanable funds shifted rightward
the bond market and the stock market.
The economy's two most important financial markets are
Suppose private saving in a closed economy is $12b and investment is $10b.
The government budget deficit must equal $2b
Which of the following is a requirement for the Bureau of Labor Statistics to place someone in the "unemployed" category?
The person must have tried to find employment during the previous four weeks.
In the LF market:
The price of the loanable funds is the real interest rate
match one person's saving with another person's investment.
The primary economic function of the financial system
Bond A has a term of 20 years and Bond B has a term of 2 years.
We would expect the interest rate on Bond A to be higher than the interest rate on Bond B if the two bonds have identical characteristics except that
Bond A has a term of 1 year and Bond B has a term of 5 years.
We would expect the interest rate on Bond A to be lower than the interest rate on Bond B if the two bonds have identical characteristics except that
more capital and higher productivity
When a country saves a larger portion of its GDP than it did before, it will have
sell bonds
When a large, well-known corporation wishes to borrow directly from the public, it can
capital investment.
When opening a print shop you need to buy printers, computers, furniture, and similar items. Economists call these expenditures
Which of the following expressions must be equal to national saving for a closed economy?
Y - C - G
Which of the following equations represents GDP for an open economy?
Y - I - G - NX
Which of the following equations represents GDP for a closed economy?
Y = C + I + G
Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as "unemployed"?
anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid off
To be counted as "employed" in the U.S. labor force statistics, a person
does not have to be working for pay if they are working for a family business and does not have to be working full time
Who in the adult population is counted as "employed" in U.S. labor statistics?
people who are temporarily absent from their job and people who work without pay in a family member's business
Other things the same, when the interest rate rises,
people would want to lend more, making the quantity of loanable funds supplied increase.
The source of the supply of loanable funds
positive relation between the real interest rate and investment.
Stock Market, Bond Market and Mutual Funds represent:
the kinds of institutions and intermediaries available in the financial markets
If there is a shortage of loanable funds, then
the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is below equilibrium.
If there is a surplus of loanable funds, then
the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is above equilibrium.
In the market for LF, if the government announces a tax break for savers,
the supply of LF shifts to the right
Who of the following is not included in the Bureau of Labor Statistics' "employed" category?
those waiting to be recalled to a job from which they had been laid off
The Bureau of Labor Statistics places people in the "employed" category if they
work without pay in a family member's business.
