macro unit 2 test

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Real GDP refers to

GDP data that have been adjusted for changes in the price level

Suppose the total monetary value of all final goods and services produced in a particular country in a year is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that

GDP that year is $500 billion.

If the unemployment rate is 9 percent and the natural rate of unemployment is 5 percent, then the

cyclical unemployment rate is 4 percent. - If the natural rate of unemployment (frictional + structural) is 5 percent and the actual rate (frictional + structural + cyclical) is 9 percent, then there is 9 - 5 = 4 percent cyclical unemployment.

The one demand factor (determinant) that relates to economic growth a) if met, ensures there will be no unplanned increases in inventories. b) requires increases in total spending to realize the output gains. c) is one of six factors that directly affect the rate and quality of economic growth. d) All of these choices are correct.

d) All of these choices are correct.

The labor force includes

employed workers and persons who are officially unemployed.

free trade

encourages growth by promoting the rapid spread of new inventions and innovations.

Transfer payments are

excluded when calculating GDP because they do not reflect current production.

net exports are

exports less imports

The National Income and Product Accounts (NIPA) help economists and policymakers to

follow the long-run course of the economy to determine whether it has grown or stagnated.

Search unemployment is a type of

frictional unemployment

Final goods and services refers to

goods and services purchased by ultimate users, rather than for resale or further processing.

When an economy's production capacity is expanding,

gross domestic investment exceeds depreciation

There are several ways to measure aggregate output. The one favored by the Bureau of Economic Analysis is

gross domestic product

The income amount used for "Rents" in the national accounts is net rent, so it is

gross rental income - depreciation of the rental prop

In the period following the Great Recession, the creation of new Internet apps has

had little measured effect on GDP or productivity but may create a lot of consumer satisfaction.

The money paid by private businesses to the suppliers of loans used to purchase capital is called

interest

If the number of hours worked in an economy is 108 and its labor productivity is $9 of output per hours worked, the economy's real GDP

is $972.

The nation's stock of capital

is the collection of human-made resources that help to produce goods and services., can be divided into two broad categories that we can informally refer to as "tools" and "recipes.", includes spending that pays for new or improved software

A nation's gross domestic product (GDP)

is the dollar value of all final output produced within the borders of the nation during a specific period of time.

After the steam engine was perfected,

items that were once handcrafted, were now mass-produced in factories.

U.S. GDP growth statistics

may understate or may overstate the gains in well-being

The fundamental invention underpinning the 1995-2010 rise in the average rate of productivity growth is the

microchip

GDP is the

monetary value of all final goods and services produced within the borders of a nation in a particular year.

The system that measures the economy's overall performance is formally known as

national income accounting.

The smallest component of aggregate spending in the United States is

net exports

Alex works in his own home as a homemaker and full-time caretaker of his children. Officially, he is

not in the labor force.

By summing the dollar value of all monetary transactions in the economy, we would

obtain a sum substantially larger than GDP

National income accountants can avoid multiple counting by

only counting final goods

GDP can be calculated by summing

personal consumption, investment, government purchases, and net exports.

Suppose that an economy's labor productivity and total worker-hours each grew by 4 percent between Year 1 and Year 2. We could conclude that this economy's

production possibilities curve shifted outward.

A nation's infrastructure refers to

public capital goods such as highways and sanitation systems.

The income approach to national income accounting lists "Rents" as one of the components. All of the following statements about "rents" are correct except

rents include the interest paid to the suppliers of loans used to purchase capital.

U.S. GDP growth statistics may understate the gain in well-being,

since products have greatly improved over time.

Human-made resources that are referred to as "recipes" includes

spending on new writing that increases the flow of entertainment and education.

Susie has lost her job in a Vermont textile plant because of import competition. She intends to take a short course in electronics and move to Oregon, where she anticipates that a new job will be available. We can say that Susie is faced with

structural unemployment.

Unemployment involving workers whose skills and experience have become obsolete or unneeded is called

structural unemployment.

Buying a new pair of jeans for yourself would increase

consumer nondurable goods and consequently personal consumption expenditures.

interest costs of the money households recieve on

corporate bonds, certificates of deposit (CDs), savings deposits.

Nomial GDP is

the sum of all monetary transactions involving final goods and services that occur in the economy in a year.

Which of the following will NOT be included in U.S. GDP?

the value of avocados grown in Mexico and shipped to your local grocery store

Labor productivity is defined as

total output ÷ hours of work

National income accountants consider services to be an intangible act or use for which a consumer, firm, or government is willing to pay. true or false

true

Purchasing a two-year-old, secondhand laptop contributes nothing to this year's GDP.

true

The four supply factors (determinants) that relate to economic growth

will increase the potential size of an economy's GDP.

Suppose that GDP was $280 billion in Year 1 and that all other components of expenditures remained the same in Year 2 except that business inventories fell by $18 billion. GDP in Year 2 is

$262 billion.

1.Improvements in technology. 2.Increases in the supply (stock) of capital goods. 3.Purchases of expanding output. 4.Obtaining the optimal combination of goods, each at least-cost production. 5.Increases in the quantity and quality of natural resources. 6.Increases in the quantity and quality of human resources. As distinct from the supply factors and efficiency factor of economic growth, the demand factor(s) of economic growth is (are)

3 only

What percentage of the U.S. adult population has a college or postcollege education (as of 2020)?

38 percent

Which Scottish inventor perfected an efficient steam engine, and thus is credited with starting the Industrial Revolution?

James Watt

the Bureau of Economic Analysis complies the NIPA accounts. The letters NIPA represent

National Income and Product Accounts.

Which of the following is not a reason for women's increased labor-force participation?

There has been an increase in the number of jobs requiring a college degree.

Which of the following is not an argument made by proponents of economic growth?

There is a direct relationship between a growing real GDP and rising pollution.

Suppose Smith pays $100 to Jones.

We need more information to determine whether GDP has changed.

Which of the following is a final good or service?

a haircut purchased by a father for his 12-year-old son

Net exports are negative when

a nation's imports exceed its exports.

To manage the problem of adding dissimilar items when calculating GDP, the BEA

adds the monetary values of each final good or service produced.

Which of the following is not a supply factor in economic growth? a) the stock of capital b) technological advance c) the size and quality of the labor force d) aggregate expenditures of households, businesses, and government

aggregate expenditures of households, businesses, and government

Critics of economic growth

argue that economic growth does not resolve socioeconomic problems such as an unequal distribution of income and wealth.

Transfer payments are not included in government purchases because

such payments generate no production.

The natural rate of unemployment is

that rate of unemployment occurring when the economy is at its potential output.

The Industrial Revolution and modern economic growth resulted in

the average human lifespan more than doubling.

At the economy's natural rate of unemployment,

the economy achieves its potential output.

Real GDP is

the nominal value of all final goods and services produced in the domestic economy, adjusted for inflation or deflation.

A price index is

the price of a market basket in a given year divided by the price of an identical market basket in a reference year.


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