chap. 7, 8 ,9:t or f
T or F:The GDP deflator is the most important and most commonly used index when computing the price level.
False
Which of the following is an example of a final good or service?
an economics textbook you purchase with the intent of reselling after your course is over.
T or F:The unemployment rate does not factor in people who voluntarily leave the labor force such as homemakers and discouraged workers.
true
Examples of stock variables include the inflation rate and items found on a company's income statement.
False; a stock variable is measured at one point in time, such as the interest rate, stock prices, and unemployment.
When calculating gross domestic product (GDP), it doesn't matter whether you use the income or expenditure approach because they will always equal each other.
False; due to measurement problems stated in the chapter, it is more efficient to use the expenditure approach.
The growth rate of an economy is calculated by looking at the ratio of real to nominal GDP.
False; growth rate is calculated by taking the change in real GDP from two time periods and dividing the difference by the value of real GDP in the first time period.
Two measurement problems with GDP discussed in the chapter include the underground economy and household activities; including both of these would decrease the overall value of GDP.
False; if the underground economy and household activities were included, the value of GDP would be higher.
If a car produced and first sold in 2007 is traded in and resold in 2008, the sale is counted as part of GDP in 2007 and 2008.
False; it is only counted as part of GDP in the year in which it was produced.
The difference between GDP and NDP is indirect buisness taxes/
False; the difference between the two is that depreciation is subtracted from GDP to calculate NDP.
If McDonalds buys a bun for 10 cents and beef for 30 cents, and sells a hamburger for $1, the contribution to GDP is $1.40 as each of these goods are final goods.
False; the hamburger was the final good, the rest are intermediate goods and therefore are not factored into GDP.
By measuring and adding only the value added of goods, we can avoid multiple counting and get a better estimate of GDP.
True
Firms produce a certain number of goods and services within a period of time, usually per week, month, quarter or year. This is an example of a flow.
True
National income accounting is important because it provides economists with detailed information that can be used to track the health of an economy and to forecast future growth and development.
True
T or F: The Great Depression and the technology boom of the 1990 s dominate all historic recessions and expansions.
True
T or F: An example of cost-push inflation is when the Federal Reserve decides to increase the money supply in the economy.
false
T or F: Because inflation and deflation are measured in terms of relative price levels, it is possible for average prices to rise or fall continuously without changing the individual price level.
false
T or F: Cost-push inflation is not as much of a concern to an economy as demand-pull inflation.
false
T or F: People who are not part of the CNIP are factored into the labor force and unemployment rate.
false
T or F: Some of the macroeconomic effects mentioned in the chapter include the wealth effect, uncertainty, price effect, and tax effects.
false
T or F: Some ways to measure the price level include the Consumer Price Index, the Producer Price Index, and the GDP inflator.
false
T or F: The Bureau of Economic Analysis is the government agency responsible for surveying households and defining the labor force.
false
T or F: The difference between the real and nominal GDP is that nominal GDP factors in the effects of inflation.
false
T or F: The income and substitution effects are some of the microeconomic effects of inflation mentioned in the chapter.
false
T or F: The three types of unemployment that make up the natural rate of unemployment are frictional, cyclical, and structural unemployment.
false
T or F: Those who serve in the U.S. military are counted as part of the labor force.
false
T or F: Under normal circumstances, the natural rate of unemployment is between 0 and 3 percent.
false
T or F: When analyzing business cycles, the trough is the recovery phase.
false
T or F: When calculating the price level, the base year is always defined as the year with the highest price index.
false
The total market value of all final goods and services produced within a given period of factors of production located within a country is................
gross domestic product
Which of the following is an example of an intermediate good?
the pizza sauce you purchase to make pizzas to sell for a fundraiser for an organization you belong to.
Which of the following is not included in 1977's GDP?
the profit earned in 1994 from selling a stock that you purchased in 1990.
T or F: Changes in the price of oil are likely to cause a change in the natural rate of unemployment.
true
T or F: Frictional unemployment accounts for the majority of the natural rate of unemployment.
true
T or F: One reason that economists are concerned about the inflation rate is because it affects the cost of living and the cost of inputs.
true
T or F:A discouraged worker is a person who has stopped actively seeking employment after 3 weeks of job searching.
true
T or F:A recession helps the economy by eliminating ineffciencies in the economy.
true
T or F:Stagflation occurs when inflation is increasing and the economy is experiencing negative growth (or recession).
true
