Macro Exam #2

Which of the following would increase disposable personal income?

A decrease in taxas paid.

China has developed a comparative advantage in the production of children's toys. The source of this comparative advantage is?

A large supply of unskilled workers and relatively little capital.

A quota is?

A limited placed on the quantity of goods that can be imported into a country.

A voluntary export restraint is an agreement negotiated by two countries that places________ that can be imported by one country from another country.

A numerical limit on the quantity of a good.

Structural unemployment is the result of ?

A persistent mismatch between the skills and characteristics of workers and the requirements of a jobs.

Cyclical unemployment is the result of ?

A slowdown in the economy.

A tax imposed by a government on imports of a good into a country is called?

A tariff

Which of the following would increase GNP in the United States?

An increase in the production of U.S. - Owned Vernal motors cars made in Mexico.

The GDP deflator is measure of the ?

Average level of prices of final goods and services in the economy.

The consumers price index is the ?

Average of the prices of the goods and searches purchased by a typical urban family of four.

To calculate GDP by the expenditure method, one must add?

Consumption spending, investment spending, government spending and net exports.

What is the largest component of spending in the United States?

Consumption spending.

Protection in the form of tariffs create winners and losers. Winners include________ and losers include ________?

Firms sheltered from foreign competition; U.S. consumers and taxpayers.

A student who just graduated from college but has not found a job most likely be?

Frictionally unemployed.

In the circular flow diagram, ________ supply the factors of production, and _____ goods and services.

Households; Buy

The increased generosity of unemployment insurance programs in Canada as compared to the United States should?

Increase the duration of unemployment in Canada as compared to the Untied States.

During a business cycle expansion, total production _____ and total employment______?

Increases; Increases

An advantage of the establishment survey over the household survey of the labor market is that the establishment survey?

Is based on actual payrolls, rather than unverified answers.

What does the PPI measure?

The average of the prices received by producers of goods and services at all stages of the production process.

Value added equals the market price of the firm's product minus?

The price of intermediate goods.

Frictional unemployment is the result of ?

The search process of matching workers with jobs.

If the minimum wage is set above the market wage?

Unemployment will rise.

Dumping refers to ?

selling a product for a price below its cost of production.

Protectionism is the use of ________ to protect domestic firms from foreign competition.

trade barriers

Trade restrictions are often motivated by a desire to save domestic jobs threaten by competition from imports. Which of the following counter - arguments is made by economists who oppose trade restrictions?

Consumers and tax payers pay a high cost for jobs saved through trade restrictions.

When the U.S. government places a tariff on a product, such as the tariff on tires imported from China, the quantity of the product imported will generally ________ and the price paid by consumers for the product will generally _________?

Decrease, Increase

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true extent of joblessness?

Discouraged workers.

Gross national product, GNP , of the United States is the market value of all final goods and services ?

Produced by citizens of the United States anywhere in the world.

An example of an intermediate good would be?

the bread that goes into a sub sandwich that is sold by Quiznos.