Macro-Econ 16 & 17

How are interest rates set, according to the classical model?

by supply and demand

According to classical economists, the competitive interaction of markets kept the economy operating near __________.

full employment

If a set basket of goods costs $6,000 in the current year and $5,000 in the base year, what is the consumer price index?

120

Julie can bake 12 dozen cookies in an 8-hour day. What is her labor productivity?

18 cookies per hour

Which of the following is included in a country's infrastructure?

interstate highways

What is the greatest limitation of the classical model?

its focus on the long run

Labor productivity is the ratio of __________ to the __________ devoted to the production of that output.

output of goods; labor hours

Hyperinflation is typically caused by excessive government spending that is financed by:

printing money.

Roger worked in a coal mine until it went out of business because fewer people were using coal to heat their homes. Now he is unable to find a new job because he is not qualified for any of the jobs that are available. This is an example of:

structural unemployment.

June is a highly skilled surgeon who was forced to take a job as a lifeguard at a local pool because she was unable to find a job in the medical field during a recession. June is considered to be:

underemployed.

What is the formula for calculating CPI?

(cost in current period/cost in base period) x 100

What is the effect of a high capital-to-labor ratio?

Higher productivity since each worker has more tools at their disposal.

Jim has been out of work for over a year and has given up trying to get a new job until the economy gets better. Jim is considered to be:

a discouraged worker.

Which of the following is not a source of growth?

Increases in nominal money supply

In 2007 the inflation level was -.9%. This is an example of:

deflation.

What does a consumer price index of 130 mean?

Prices have increased by 130% from the base year to the current year.

In 2005 the inflation level was 5.6% and in 2006 the inflation level was 4.9%. This is an example of:

disinflation.

Which of the following is included in the PPI?

excise taxes

Which of the following would be protected by a copyright?

the invention of a machine

Which of the following would be protected by a patent?

the invention of a machine