Macro Exam 2 Questions (ch.4-7)
we are most likely to see a recession if interest rates on long-term bonds are ______ and interest on short-term bonds are __________ .
2% ; 4%
given the following data, the unemployment rate % for this economy is approximately ___________ . employed full time - 65 employed part time - 15 actively seeking work - 20 retired - 30 discouraged workers - 10 unpaid family members working 10 hours per week - 100
20
if the growth rate in an economy is 3.5%, then its GDP will double in about:
20 years
in order to be actively seeking work, the Department of Labor indicates that a person needs to be looking for work in the past ______ weeks
4
implementing a price floor can cause:
a surplus
which of the following refers to "human capital"?
academic training and on-the-job training
according to the textbook, which group of workers have experienced the highest amount of unemployment over the past two decades?
african-americans
before a house is sold, the buyer usually inspects the property for problems. this reduces which cause of market failure?
asymmetric information
who are the two decision makers on the circular flow diagram?
businesses and households
the ___________ refers to the notion that developing countries are able to achieve greater productivity for each unit of capital invested because they are using existing technologies.
catch-up effect
the direction of flow of goods and services on the circular flow diagram:
clockwise
the largest category for the income approach to GDP in the US is:
compensation of employees
the ability of growth to build on previous growth over time is specifically called:
compounding
which group is helped by inflation?
debtors
the Bureau of Labor Statistics (BLS) counts the following workers in the total labor force.
employed full-time and part-time workers, those actively seeking work
what can the government do to facilitate or promote economic growth?
enforce contracts, protect property rights, provide stable financial system
the index in the base year will be:
equal to 100%
when demand for a product falls, ceteris paribus, what happens to the equilibrium price and consumer surplus at that price?
equilibrium price falls and consumer surplus falls
what is the correct sequence of stages in the business cycle?
expansion, peak, recession, trough
"Short-run" growth involves _________ capacity, while "long-run" growth involves _________ capacity.
fixed; expanding
over the past 150 years, the U.S> economy has endured a recession on average about every:
four to five years
according to Professor Rourke, the National Rate of Unemployment is the same of _______ and it ranges from ______
frictional & structural; 4 to 6 percent
graph
graph
a higher capital-to-labor ratio results in ___________ labor productivity, and ___________ wages.
higher; higher
a change in the Leading Economic Index is supposed to reflect:
how the economy will behave in the near future
this term best describes when prices are rising greater than 100% per year.
hyperinflation
consumer surplus is the difference between the:
max price the buyer is willing to pay and the market price
the frictional unemployment rate will be highest during a:
peak
the high point of a business cycle is called the:
peak
total surplus is calculated as:
producer surplus + consumer surplus
economic growth is most commonly measured by:
real GDP per capita
which is the worst type of unemployment?
structural
which is the largest contributor to economic growth?
technology improvements
the broadest measure of inflation is
the GDP deflator
what event was a major influence on the development of macroeconomics?
the Great Depression
___________ is a measure of the change in average prices paid by urban consumers for a typical market basket of 300 goods and services
the consumer price index
during a typical economic recovery:
unemployment decreases
when would "net exports" be negative?
when imports are greater than exports
assuming the Nominal GDP is $5 billion and the Price Index in the current year is 125%. The real GDP will equal ___________.
$4 billon
Susan purchased a new printer for $150 although she was willing to pay $175. The minimum price acceptable to the seller, Jasmine, was $145. The results of this transaction are a consumer surplus of:
$25 and a producer surplus of $5
laissez-faire is a _______ term that means _______
French; "let it be"
what represents the expenditure approach to GDP?
GDP = C = Ig+ G + Xn
in a simple circular flow model:
income is equal to spending
the ___________ refers to the public capital of a nation, including transportation networks, power-generating plants and transmission facilities, public education institutions, and other intangible resources.
infrastructure
public goods are difficult to provide in the private market because they have the characteristics of:
non-rivalry and non-exclusivity
these products have an average useful life of less than three years.
nondurable goods
which term best reflects the "underground economy"?
the informal economy
the total of consumer surplus plus producer surplus is maximized at:
the market equilibrium price
which best represents an accurate description of GDP?
the market value of all final goods and services produced by resources in a given year.
if a country's population increases at a higher rate than the growth in its real GDP:
the standard of living in the country has declined
