2 test canvas

A benefit of a labor union comes in the form of collective bargaining.

True

A good is inferior when a rise in income decreases the demand for the good.

True

A price ceiling set above the equilibrium price has no effect.

True

A price control is a legal restriction on how prices may be set.

True

An example of a final service included in gross domestic product (GDP) would be a haircut.

True

An example of shoe leather costs would be driving to the grocery store to stock up on goods in anticipation of inflation.

True

As the fertility rate in the United States increases, the demand for diapers will increase.

True

Graphically, a price floor is set at a price that is below the equilibrium price.

True

High rates of inflation impose significant economic costs.

True

If both demand and supply curves increase, quantity will increase but price depends on the size of the shift, or is indeterminant.

True

If the current inflation rate is higher than expected, borrowers will gain at the expense of lenders.

True

If the demand curve increases but the supply curve decreases, price increases but quantity depends on the size of the shift, or is indeterminant.

True

If the demand curve increases while the supply curve is held constant, both price and quantity will increase.

True

If the nominal interest rate on a 30-year fixed rate mortgage is equal to 3.99% and the inflation rate is equal to 2.1%, then the real interest rate must be equal to 1.89%.

True

If the supply curve increases while the demand curve is held constant, price will decrease and quantity will increase.

True

In 2017, soybeans were a top US export.

True

In August 2008, the annual inflation rate was equal to 5.4.

True

In order to determine whether or not the economy is entering the recession phase, economic indicators such as output and employment must be falling for a period of at least six months or longer.

True

Indexing a social security payment to the Consumer Price Index (CPI) means to increase or decrease that payment with inflation or deflation.

True

Inflation and wages rise during the expansion phase as the economy improves and businesses increase prices of goods and services.

True

Microeconomics is the area of economics that focuses on decisions made by individuals and buinesses and covers such topics as profits, costs, revenues, and the four basic market structures.

True

Missed opportunities can occur if a market or an economy is inefficient.

True

Net exports refers to the difference between the value of exports and the value of imports.

True

Price controls are passed by governments in response to political pressure from constituents (buyers and sellers).

True

Price floors can lead to excess supply where the quantity supplied is greater than the quantity demanded at the set price.

True

Price stability is a desirable goal for the economy since it makes it easier for consumers and businesses to plan their budgets accordingly.

True

Scarcity is the idea of having less and how to deal with having less.

True

Structural changes can be responsible for job losses in the labor market.

True

Structural unemployment can lead to a surplus of workers in the labor market.

True

Structural unemployment occurs when there are more people looking for jobs in the labor market than there are jobs available at the current wage rate

True

Tax payments through tax brackets are indexed to the Consumer Price Index (CPI).

True

The Great Recession in the United States occurred from 2007 to 2009.

True

The United States is an example of an open economy.

True

The demand for hot dog buns will decrease when the price of hot dogs increases.

True

The equilibrium price is referred to as the market-clearing price.

True

The formula for the GDP Deflator is Nominal GDP/Real GDP × 100.

True

The labor force participation rate refers to the percentage of the population that are age 16 or older who are working or those who want to work.

True

The law of demand implies that the demand curve will be downward sloping.

True

The law of supply implies that the supply curve will be upward sloping.

True

The minimum wage is the market price of labor.

True

The underemployment rate refers to the percentage of the labor force who work part-time jobs because they cannot find full-time jobs.

True

There is a strong direct relationship between educational attainment and the unemployment rate.

True

There is a surplus of a good when the quantity supplied exceeds the quantity demanded.

True

There was deflation in the economy in September 2015.

True

Voluntary export restriction is an example of a barrier to free trade.

True

When shifting both the demand and the supply curves simultaneously, each shift must be drawn roughly the same. The demand curve cannot shift by a larger amount than the supply curve and vice versa.

True

The unemployment rate can vary widely by

all a ... Something

Which of the following best describes a marginally attached worker?

all the above

Which of the following is an example of an intermediate good used to produce a final good included in gross domestic product (GDP)?

Buns used in Hamburgers

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Which of the following is not a factor that can shift the supply curve? Changes in tastes. Changes in expectations. Changes in technology. Changes in the number of producers in the market

Changes in tastes.

Which of the following is not a factor that can shift the demand curve? Changes in tastes Changes in expectations Changes in technology Changes in income

Changes in technology

Most households receive the majority of their income from ownership of stocks and bonds.

False

Normative economic analysis is the branch of economics that describes how the economy works and is backed by factual data and research.

False

Price is the only variable that can cause the demand curve to shift.

False

Price is the only variable that can cause the supply curve to shift.

False

Price stability occurred in January 2018.

False

Protectionism is the idea that free trade is in the best interest of a country.

False

Real gross domestic product (GDP) is the value of all final goods and services produced in the economy during a specific time period, usually a year calculated using current year prices.

False

Shortages occur when the price is above its equilibrium level.

False

Suppose the price index for January 2017 equals 242.839 and the price index for January 2018 equals 247.867, then the inflation rate for January 2018 would equal 3.07%.

False

Suppose the price of milk increases from $4.99 to $6.99 per gallon and quantity demanded decreases from 100 to 50 gallons then the demand curve will shift to the left.

False

The Consumer Price Index (CPI) is used to measure changes in prices of goods and services purchased by producers in the economy.

False

The Core Consumer Price Index (CPI) is used to measure the cost of a hypothetical market basket of goods and services purchased by consumers in the economy.

False

The four phases of the business cycle are trough, peak, depression, and recovery.

False

The individual supply curve illustrates the relationship between quantity supplied and price for the market as a whole.

False

The inflation rate refers to a single number representing the overall level of prices in the economy.

False

The national unemployment rate peaked at 24.9% in 1933.

False

The natural rate of unemployment does not fluctuate in the United States.

False

The natural rate of unemployment is unemployment that is due to the time workers spend searching for a job.

False

The nominal wage rate such as the federal minimum wage rate of $7.25 per hour is adjusted for inflation.

False

To calculate the Growth Rate in Real gross domestic product (GDP), the formula used equals Real GDP in year 2 minus Real GDP in year 1 divided by Real GDP in year 1 multiplied by 100.

False

To graphically illustrate each case, begin each model in market equilibrium condition.

False

Two goods are substitutes if a rise in the price of one good leads to a decrease in the demand for the other good.

False

You take the size of the population and divide it by gross domestic product (GDP) in order to calculate GDP per capita.

False

A price ceiling is set above the equilibrium price.

Flase

Let's suppose you are looking to finance a new car and based on your credit score you qualify for an annual interest rate of 2.58% on a 5-year car loan. If the current annual rate of inflation is 2.1%, what is the real interest rate equal to? 0.58% 2.48% 0.48% 4.68%

I can tell you it is not 2.48

From 1914 to 2018, the highest inflation rate was? From 1914 to 2018, the highest inflation rate was? 34.12% 17.44% 23.67% None of the above

I can tell you its not 17.44%

Something that can lead to job loss for employees is poor economic performance at companies.

true

Teenagers tend to have a higher unemployment rate compared to adults.

true

In October 2016, the annual inflation rate was equal to 2.5.

False

In October 2018, the United States had a goods and services trade surplus.

False

Inflation refers to an overall falling aggregate price level.

False

Investment spending is the largest category of gross domestic product (GDP).

False

Employed refers to people who work full-time jobs only.

false

The formula for the unemployment rate is equal to the Labor Force divided by the Unemployed multiplied by 100.

false

The labor force refers to the number of people who hold a job either part time or full time in the economy.

false

The unemployment rate can understate the true level of unemployment since it is normal for workers to spend some time searching for a job even when jobs are easy to find.

false

In order to calculate the real wage rate, you divide the price level by the wage rate.

False

Who wrote The Wealth of Nations?

Adam Smith

Which is an example of a productive resource? Labor Land Capital Entrepreneurial ability All of the above None of the above

All of the above

Which of the following is an example of a social science? Anthropology Psychology Economics Sociology All of the above

All of the above

A decrease in demand is a rightward shift of the demand curve.

False

A market-based economy is when the government has total control over production, investment, prices, and income decisions.

False

A price ceiling is a minimum price that sellers are allowed to charge for a good or service.

False

A rent-controlled apartment is an example of a price floor.

False

A tradeoff is what you have to give up in order to do or get something else.

False

Aggregate output refers to the total value of all final goods and services produced in the economy during a specific time period, usually a year.

False

An example of an input used to produce a can of Coke would be plastic.

False

An increase in supply is a leftward shift of the supply curve.

False

Assume Great Value chicken noodle soup is an inferior good. If your income increases, then your demand for Great Value chicken noodle soup will increase.

False

Comparative advantage is the ability to produce a good or service using fewer resources than another producer.

False

Cyclical unemployment is the unemployment rate that arises from the effects of frictional and structural unemployment.

False

David Ricardo believed factory workers should work in areas where they have a clear advantage and trade for other necessities.

False

Deflation refers to the process of bringing down the inflation rate.

False

During a recession, firms look to increase their overall cost.

False

Export subsidies are taxes on imports.

False

Government purchases of goods and services refers to payments by the government to individuals where no good or service is provided in return.

False

If both demand and supply curves decrease, quantity will remain the same but price will decrease.

False

If more gas stations are built in the local area, then the supply of gasoline will decrease as a result.

False

If the demand curve decreases but the supply curve increases, price decreases but quantity will remain the same.

False

If the demand curve decreases while the supply curve is held constant, price will increase and quantity will decrease.

False

If the supply curve decreases while the demand curve is held constant, price will decrease and quantity will decrease.

False

Imports refer to US sales of goods and services.

False

From 1914 to 2018, deflation was worst during what month and year? From 1914 to 2018, deflation was worst during what month and year? July 2009 October 1938 March 1933 June 1921

June 1921

Which of the following is an example of an economic resource? A hat The sun Wind Land All of the above

Land

Which of the following is an example of a command economy? United States North Korea Canada China

North Korea

Which of the following correctly explains menu costs? Which of the following correctly explains menu costs? Increased transaction costs caused by inflation. The real costs associated with changing listed prices of goods and services. A cost associated with inflation that makes money a less reliable unit of measurement. None of the above.

The real costs associated with changing listed prices of goods and services.

The phrase the "dismal science" is attributed to?

Thomas Robert Malthus

Which of the following is a factor that can affect the natural rate of unemployment?

d. all of the above

Which of the following is an example of a structural change that can lead to structural unemployment?

e. all of the above