Macro hw 3-4

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 on unverified answers.

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat. This lumberjack would be

structurally unemployed.

An example of an intermediate good would be

the rims on a new car

According to the text, economists consider full employment to occur when

the unemployment rate consists of only frictional and structural unemployment.

Which of the following is likely to increase measured GDP?

Marijuana becomes legal to grow and sell.

The GDP deflator is the

The ratio of nominal GDP to real GDP multiplied by 100

Which of the following goods is directly counted in GDP?

a 12-inch Subway sandwich purchased by a student

Which of the following is considered a durable good?

a washing machine

Investment, as defined by economists, would include the purchase of a

computer by an accounting firm.

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

consumption spending

In the second half of 2019, automobile sales in the United States were lower than they were in the second half of 2018. The decrease in auto sales impacts GDP because new automobiles are counted as ________ when purchased by households and ________ when purchased by businesses.

consumption; investment

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

counting people as employed who are working part time, although they would prefer to be working full time

Most of the unemployment that occurred during the Great Depression was

cyclical unemployment

In the circular flow model, the value of total income for an economy ________ the value of total production.

equals

Efficiency wages cause unemployment because

firms pay wages that are above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied

Jack just told his boss that he thinks his boss is an idiot. It is likely that Jack will be experiencing ________ unemployment in the near future.

frictional

The advice to "keep searching, there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment?

frictional unemployment

Which of the following is not an example of a transfer payment? -social security payments to disabled persons -unemployment insurance payments -health insurance payments to an army private -social security payments to retirees

health insurance payments to an army private

Gross domestic product understates the total production of final goods and services because of the omission of

household production.

Nominal GDP will increase

if either the price level or the quantity of goods and services produced rises.

A sharp increase in the number of medical errors increases the number of lawyers hired to determine medical malpractice settlements. This will

increase GDP and decrease well-being in the economy.

Suppose that homemakers are included as employed in the labor force statistics, rather than being counted as out of the labor force. This would

increase the measured labor force participation rate.

An increase in unemployment insurance payments would, in effect, ________ the amount of time spent searching for a job, which would increase ________ unemployment.

increase; frictional

The size of the underground economy would tend to increase if the government of a country

increased income tax rates.

The purchase of a new house is included in

investment expenditures.

Which of the following explains why many European countries have unemployment rates that are higher than in the United States?

European countries offer higher unemployment benefits than the United States.

GDP is not a perfect measure of well-being because

GDP is not adjusted for pollution

The purchase by a household in China of an automobile produced in the United States is included in U.S.

net exports.

Consumption expenditures do not include household purchases of

new houses

Discouraged workers are classified by the BLS as

not in the labor force

The Bureau of Labor Statistics would categorize a retiree who is not working as

out of the labor force.

To examine how the total production of an economy has changed over time, it would be better to examine

real GDP.

Suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed become employed. The labor force participation rate will

remain constant.

By offering training to workers whose firms laid them off because of competition from foreign firms, the federal government is attempting to reduce

structural unemployment.

The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect

that stock prices are more likely to fall.

Since the end of World War II, each president running for reelection when the economy was growing has won, and each president running for reelection when the economy was contracting has lost. These presidents were experiencing the political effects of

the business cycle

Suppose in 2020, you purchase a house built in 2014. Which of the following would be included in the gross domestic product for 2020?

the value of the services of the real estate agent

If the minimum wage is set above the market wage

unemployment will rise

In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA

values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.