ECON 201 Macroeconomics Test 2

In the national income accounts, depreciation is called A) "capital consumption allowance" B) "negative investment" C) "diminished value" D) "loss due to wear"

A) "capital consumption allowance"

Refer to table 23-1 Net domestic product for Chereaux in 2015 is A) $194 B) $196 C) $198 D) $204

A) $194

Economists call an institution designed to oversee the banking system and regulate the quantity of money in the economy A) a central bank B) a charter bank C) a national bank D) a state bank

A) a central bank

The unemployment rate is computed as the number of unemployed A) divided by the labor force, all times 100 B) divided by the number of employed, all times 100 C) divided by the adult population, all times 100 D) times the labor force participation rate, all times 100

A) divided by the labor force, all times 100

When the consumer price index rises, the typical family A) has to spend more dollars to maintain the same standard of living B) can spend fewer dollars to maintain the same standard of living C) finds that its standard of living is not affected D) con offset the effects of rising prices by saving more

A) has to spend more dollars to maintain the same standard of living

Gross domestic product measures A) income and expenditures B) income but not expenditures C) expenditures but not income D) neither income or expenditures

A) income and expenditures

Frictional unemployment results from A) job searching. its often thought to explain relatively short spells of unemployment B) Job searching. it is often thought to explain relatively long spells of unemployment C) a surplus in some labor markets. it is often thought to explain relatively short spells of unemployment D) a surplus in some labor markets. it is often thought to explain relatively long spells of unemployment

A) job searching. its often thought to explain relatively short spells of unemployment

You pay for cheese and bread from the deli with currency. Which function of money does this best illustrate? A) medium of exchange B) unit of account C) store of value D) liquidity

A) medium of exchange

Mia puts money into a piggy bank so she can spend it later. What function of money does this illustrate? A) store of value B) medium of exchange C) unit of account D) none of the above are correct

A) store of value

Liquidity refers to A) the ease with which an asset is converted to the medium of exchange B) the measurement of the intrinsic value of commodity money C) the measurement of the durability fo a good D) how many time a dollar circulates in a given year

A) the ease with which an asset is converted to the medium of exchange

Which of the following is included in the calculation of GDP? A) the purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country B) the purchase of a new edition of a foreign textbook that was produced in a different nation C) the purchase of ink and paper supplies by a textbook company for the production of new textbooks D) the purchase of a used textbook from a friend who took the same class last year

A) the purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country

Refer to table 23-1 The market value of all final goods and services produced within Chereaux In 2015 is A) $214 B) $200 C) $204 D) $230

B) $200

The Bureau of Labor Statistics counts a member of a surveyed household as an adult if that person is at least A) 14 years old B) 16 years old C) 18 years old D) 21 years old

B) 16 years old

If the consumer price index was 96 in 2012, 100 in 2013, and 102 in 2014, then the base year must be A) 2012 B) 2013 C) 2014 D) The base year can not be determined from the given information

B) 2013

Savings deposits are included in A) M1 but not M2 B) M2 but not M1 C) M1 and M2 D) Neither M1 orM2

B) M2 but not M1

Expenditures on a nation's domestic production A) are less than its domestic production. B) are equal to its domestic production. C) are greater than its domestic production. D) could be less than, equal to, or greater than its domestic production.

B) are equal to its domestic production

Grapes are considered intermediate goods A) whether the purchaser uses them to make wine to sell or eats them B) if the purchaser uses them to make wine to sell others but not if the purchaser eats them C) if the purchaser eats them, but not if the purchaser uses to them to make wine to sell D) none of the above is correct

B) if the purchaser uses them to make wine to sell others but not if the purchaser eats them.

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is A) included in GDP whether Susan pays Speedy Lube to change it or changes it herself B) included in GDP is Susan pays Speedy Lube to change it but not if she changes it her self C) included in GDP if Susan changes it herself, but not if she pays Speedy Lube to change it D) Not inculded in GDP whether Susan pays Speedy lube to change it or she changes it herself

B) included in GDP is Susan pays Speedy Lube to change it but not if she changes it her self

The labor force equals the A) number of people employed B) number of people employed plus the number of people unemployed C) number of people employed plus the number of people unemployed plus teenagers between ages 14 and 16 who work at least 10 hours a week D) adult population

B) number of people employed plus the number of people unemployed

The consumer price index is used to A) convert nominal GDP into real GDP B) turn dollar figures into meaningful measures of purchasing power C) characterize the types of goods and services that consumers purchase D) measure the quantity of goods and services that the economy produces

B) turn dollar figures into meaningful measures of purchasing power

How is net national product (NNP) calculated? A) saving is subtracted from the total income of a nation's citizens B) saving is added to the total income of a nation's citizens C) Depreciation losses are subtracted from the total income of a nation's citizens D) Depreciation losses are added to the total income of a nation's citizens

C) Depreciation losses are subtracted from the total income of a nation's citizens.

The CPI is a measure of the overall cost of goods and services bought by A) a typical firm B) the government C) a typical consumer D) all of the above are correct

C) a typical consumer

Which of the following is a way to compute GDP? A) add up the wages paid to all workers B) add up the quantities of all final goods and services C) add up the market values of all final goods and services D) add up the difference between the market values of all final goods and services and then subtract the costs of producing those goods and services

C) add up the market values of all final goods and services

An important function of the U.S. Federal Reserve is to A) set the debt ceiling B) fund congressional spending C) control the supply of money D) mint coins

C) control the supply of money

In the CPI, goods and services are weighted according to A) how long a market has existed for each good and service B) the extent to which each good or service is regarded by the government as a necessity C) how much consumers buy for each good or service D) the number of firms that produce and sell each good or service

C) how much consumers buy for each good or service

A nations standard of living is determined by A) the percentage of its GDP that is accounted for by government purchase B) the quantity of natural resources with which it is endowed C) the productivity of its workers D) factors and events that are beyond the nation's control

C) the productivity of its workers

Which of the following is not one of the categories into which the Bureau of Labor Statistics places each adult of each surveyed household? A) employed B) unemployed C) underemployed D) not in the labor force

C) underemployed

Refer to table 23-1 Disposable income for Chereaux in 2015 is A)$190 B)$211 C)$125 D)$141

C)$125

GDP is equal to A) the market value of all final goods and services produced within a country in a given period of time B)Y C)C+I+G+NX D) all of the above

D) all of the above

M1 includes A) currency B) demand deposits C) travelers checks D) all of the above

D) all of the above

Which of the following statements about GDP is correct? A) GDP measures two things at once: the total income of everyone in the economy's output of goods and services B) Money continuously flows from households to firms and then back to households, and GDP measures this flow of money C) GDP is generally regarded as the best single measure of a society's economic well being D) all of the above

D) all of the above

Who is included in the labor force by the bureau of Labor Statistics? A) Tina, who worked most of the week in a steel factory B) Kelly, who is temporarily laid off but expects to be recalled C) DJ, who does not have a job but is looking for work D) all of the above are correct

D) all of the above are correct

Which of the following is NOT included in GDP? A) a can of bug spray B) the service of an exterminator C) the honey produced and sold by a bee keeper D) all of the above are included in GDP

D) all of the above are included in GDP

The natural rate of unemployment is the A) unemployment rate that would prevail with zero inflation B) rate associated with the highest possible level of GDP C) difference between the long run and short run unemployment rates D) amount of unemployment that the economy normally experiences

D) amount of unemployment that the economy normally experiences

Most goods and services produced at home A) and most goods and services produced illegally are produced in GDP B) are included in GDP while most goods and services produced illegally are excluded from GDP C) are excluded from GDP while most goods and services produced illegally are included in GDP D) and most goods and services produced illegally are excluded from GDP

D) and most goods and services produced illegally are excluded from GDP

In the calculation of the CPI, tea is given greater weigh than beer A) the price of the tea is higher than the price of beer B) it costs more to produce tea than it costs to produce beer C) tea is more readily available than beer to the typical consumer D) consumers buy more tea than beer

D) consumers buy more tea than beer

Cyclical unemployment is caused by A) frictional and Structural unemployment B) frictional but not Structural unemployment C) Structural but not frictional unemployment D) neither frictional nor structural unemployment

D) neither frictional nor structural unemployment

which of the following are correct? A) the federal reserve has 14 regional banks. The board of Governors has 12 members who serve 7- year terms B) the federal reserve has 14 regional banks. The board of Governors has 7 members who serve 14- year terms C) the federal reserve has 12 regional banks. The board of Governors has 12 members who serve 7- year terms D) the federal reserve has 12 regional banks. The board of Governors has 7 members who serve 14- year terms

D) the federal reserve has 12 regional banks. The board of Governors has 7 members who serve 14- year terms

Economists use the term "money" to refer to A) all wealth B) all assets, including real assets and financial assets C) all financial assets, but not real assets D) those types of wealth that are regularly accepted by sellers in exchange for goods and services

D) those types of wealth that are regularly accepted by sellers in exchange for goods and services

Fiat money A) has no intrinsic value. B) is backed by gold. C) is a medium of exchange but not a unit of account. D) is any close substitute for currency such as checkable deposits.

has no intrinsic value