Macro Exam 2 Homework questions

No effect in Per Capita

- the avg life expectancy increases - businesses begin utilizing production methods that protect the environment without increasing production costs

Example of produced within a certain timeframe

- trudy ages buys her dream car that was made in the 1970's - Don E. Brook buys only vintage shoes because he wants a new look

Frictionally unemployed example

Deron does not currently have a job. Many firms would like to hire. him, in Dallas and Brooklyn in particular, but Deron remains out of work as he evaluates potential jobs in search for a proper match

Individuals who want to work, but have given up searching for a job because of limited prospects, are known as

Discouraged workers

Anita Job is the new Treasury Secretary, and she is trying to interpret the inflation measures for two consecutive years. In year one, the aggregate price level increased by 6%6% and, in year two, the aggregate price level increased by 4%4% . Which term describes the change in the price level from year one to year two?

Disinflation

Example of produced within a country's boundaries

Easton West buys Nike sports gear. Nike is headquartered in Oregon but produces in Malaysia

Example of Inflation

Barry cade notices that the price of many items that he uses on a regular basis has steadily been increasing over the past 10 years

Example of disinflation

Bill Board notices that his rent for this year has increased button as much as it had increased last year

Example of Not a part of this years GDP

- Barbie Dahl buys a 1960's ranch style home so she can be closer to campus - this year, skip dover is more business focused so he invests in stocks

Not in labor force examples

- Brian is 31 year old who would like a job, is available to work, and most recently sought work six weeks ago - Sarah is 73 year old retiree who has no intention of returning to work - James is a 35 year old who most recently sought work 2 years ago

Examples of market value

- Dr. A just trades acne treatments with Kit E. Katz for cat-sitting services - Joy rider makes guacamole from avocados that her neighbor Be a Kind gave to Joy from her tree

Unemployed examples

- Erik volunteers for 10 hours per week at his children's school and does other work. he sends his resume to 10 potential employers daily - Alex just turned 16 and started applying for jobs. He has not found a company that will hire him yet - bruce is a 61 year old who has been without a job for two years, is available for work, and most recently sought work last week

employed examples

- Laura works 20 hours in a paid position for her local animal shelter - Pete had a knee replacement two weeks ago and will not be available too work at his job as a mechanic for the next three months - James quit his job tot stay home with his children and has not worked in 15 years, nor has looked for work - chung is a 25 year old single parent working only 10 hours a week but seeking more hours

Examples of Investment

- Skip Dover buys his parents a home that was completed earlier this year - A car manufacturer from outside the US builds another car factory in Alabama

Examples of Government purchases

- Veterans affairs, a federal government agency, orders more paper for all their branches - the average salary for a California state senator is a little over $90,000

Example of imports

- a popular video game in the US is produced by a Finnish video game company - a candy bar is popular in Alabama but comes from another country

Example of Exports

- a premium candy maker located in tacoma WA, sells al and candy in high-end sores in china - a new brand of guitars, which are produced in Nashville TN, become the must haves for all aspiring rock stars in Europe

Decrease in per capita

- a wave of immigrants from Venezuela increases the size of population - parents remove their children from childcare centers and begin caring for their children themselves

Examples of Consumption

- barbie Dahl decides to take Spanish lessons at the local college - Skip Dover buys a jet ski as a gift

What corresponds to a deficiency in real GDP per capita as an accurate reflection of the well-being of a nation.

- it does not consider the quality of environment - it does not look at value production that is not intended for sale - it does not put importance on physical health

Suppose that an economy consists of only two individuals. Trevor has $1510 available to spend on goods. He decides to purchase $510 worth of produce from Charlotte in the current quarter. No other economic activity takes place during the current quarter. 1. for the current quarter, what is the economy's income? 2. for the current quarter, what is the economy's expenditure? 3. In an economy, how are income and expenditure related?

1. $510 2. $510 3. they are equal

After a financial crisis hits the country of Barbaria, 33 million people become unemployed. If 2525 million individuals are lucky enough to keep their jobs, what is the unemployment rate? Please specify your answer to two decimal places.

10.71%

Which provides the best evidence that inflation has occurred?

A person whose salary has increased is able to purchase fewer goods and services

Cyclically unemployed example

Abby is a stellar employee. However, her employer has gone out of business due to a recession and abby has no job as a result. Abby will surely be able to find a job in the future but remains looking for a job currently

Example of Hyperinflation

Anne Teak notices that her government has taken to printing money in trillion dollar bills in order to make everyday transactions easier

Example of deflation

Barb Dwyer notices that during economic downturns, such as recessions, the prices tend to decrease for at least the duration of these economic events

T/F: Business cycles are common in emerging economics but not in developed economies

False

T/F: Business cycles last for approximately nine months

False

T/F: Deflation means that the overall price level is increasing at a decreasing rate

False

T/F: When a business cycle reaches the trough, the economy is usually operating at its capacity

False

T/F: while theoretically possible, deflation has never been observed in the US

False

How are GDP and GNP related?

GDP=GNP - (output of US citizens living abroad) + (output of foreign nationals living in the US)

Anna Graham is the new Treasury Secretary, and she is trying to interpret some inflation measures. In year one, the aggregate price level increased by 66% and in year two, the aggregate price level decreased by 22%. Which statement accurately characterizes the changes in the nation's price level?

In year one, the economy is experiencing inflation. In year two, the economy is experiencing deflation

How would you expect the inclusion of previously excluded underground activities impact the value of Italy's GDP?

Increase the value of GDP

The overall health of Costa Rican citizens is/is not included in GDP

Is not

This group, consisting of individuals who would like to work but have not looked for work during the past four weeks, is included among

Marginally attached workers

Structurally unemployed example

Terrell does not have a job. For many years, Terrells skills were highly desired and he had no trouble finding work. Terrell still has many of these same skills but he is finding that employers now desire different attributes in employees

What best describes real GDP

The production of goods and services valued at constant prices

T/F: A negative rate of inflation implies that deflation has taken place

True

T/F: Business cycles can be described as fluctuations from the economy's long-term growth trend

True

T/F: Deflation means that the overall price level is decreasing

True

T/F: The four phases of business cycles are peaks, troughs, expansions, and recessions

True

T/F: The peak of a business cycle is followed by a downturn or recession

True

Individuals who are involuntarily working part‑time are considered

Underemployed

By excluding the groups identified in the previous questions, the U.S. Bureau of Labor Statistics calculation methods

Understate the true level of unemployment

Examples of Final good or service

Yum n' yummy restaurant buys celery, egg plant, and squash for use in the famous Yum n' yummy omelet

Which of the statements best describes a business cycle?

alternating periods of increasing and decreasing economic output

what is inflation?

an increase in overall price level

Legal fees o prosecute a criminal in Costa Rica are/are not included in GDP

are

Low crime rates in costa rica are/are not included in GDP

are not

Increase in Per Capita

business operating in the informal economy begin reporting their income to the government

A Costa Rican buying his son an inhaler for treatment of asthma is/is not included in GDP

is

the total spending on health care in Costa Rica is/is not included in GDP

is

Air quality in Costa Rica's major cities is/is not included in GDP

is not