Econ 410 Homework for Exam 1
The total income of everyone in the economy adjusted for the level of prices is called:
real GDP
In principle, the GDP accounts should—but do not—have an imputation for
rental services of automobiles driven by owners
When studying the short-run behavior of the economy, an assumption of ________ is more plausible, in contrast to studying the long- run equilibrium behavior of an economy, when an assumption of _________ is more plausible
sticky prices; flexible prices
An increase in the price of imported goods will show up to:
the CPI but not in the GDP deflator
In the classical model with fixed, output the supply and demand for goods and services are balanced by:
the interest rate
The real interest rate is the:
the nominal interest rate minus the rate of inflation
In a Cobb-Douglas production function the marginal product of capital will increase if:
the quantity of labor increases
The two most important factors of production are:
capital and labor
The panel of economists appointed by the Senate Finance Committee estimated that the CPI ______ inflation by approximately ______ percentage point(s) per year.
overestimates; 1
Deflation occurs when
prices fall
If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657, investment is $741, and net exports are -$1,910, then government purchases are:
$2977
If GDP (measured is billions of current dollars) is $5465 and the sum of consumption, investment, and government purchases is $5496, while exports equal $673, imports are:
$704
If nominal GDP in 2009 equals $14 trillion and real GDP in 2009 equals $11 trillion, what is the value of the GDP deflator
1.27
Assume that the consumption function is given by C= 200+0.7(Y-T), the tax function is given by T= 100 + t1Y, and Y=50K0.5L0.5, where K=100 and L=100. If t1 increases from 0.2 to 0.25, then consumption decreases by:
175
If real GDP grew by 6% and population grew by 2%, then real GDP per person grew by approximately ________ %.
4
If the adult population equals 250 million, of which 145 million are employed and 5 million are unemployed, the labor force participation rate equals ______ percent.
60
In the US economy today, real GDP per person, compared with its level in 1900, is about:
8 times as high
GNP minus GDP _______ income earned domestically by foreigners_______ income that nationals earn abroad.
minus; plus
A worker with two jobs is counted:
once in the household survey, but twice in the establishment survey
The CPI is a:
Laspeyres price index
All of the following actions are investments in the sense of the term used by macroeconomists except:
Sandra Santiago's buying 100 shares of IBM stock
In a closed economy, private saving equals:
Y-T-C
The national income accounts identity, for an open economy, is:
Y= C + I + G + NX
National income differs from net national product by an amount called:
a statistical discrepancy
A consumption function shows the relationship between consumption and:
disposable income
Imputed values included in GDP are the:
estimated value of goods and services that are not sold in the marketplace
The core inflation rate:
excludes food and energy prices
In the circular flow model, households receive income from the ________ market and save through the ______ market.
factor; financial
In the national income accounts, government purchases are goods and services purchased by:
federal, state and local governments
The unemployment rate:
has never been zero in the United States
Estimates by Goldin and Katz indicate that the financial returns of a year of college _____ between 1980 and 2005.
increased
In a simple model of the supply and demand for pizza, when aggregate income increases, the price of pizza________ and the quantity purchased__________.
increases; increases
The demand for loanable funds is equivalent to
investment
At any particular point in time, the output of the economy:
is fixed because the supplies of capital and labor and the technology are fixed
With a Cobb-Douglas production function, the share of output going to labor:
is independent of the amount of labor
When a firm sells a product out of inventory, GDP:
is not changed
Macroeconomists cannot conduct controlled experiments, such as testing various tax and expenditure policies, because:
they must make use of the data history gives them
The real wage is the return to labor measured in:
units of output
Which of the following is a stock variable? a. wealth b. consumption c. investment d. income
wealth
The household survey conducted by the Bureau of Labor Statistics provides estimates of the number of workers ___________, while the establishment survey provides estimates of the number of workers ________.
with jobs; on firm's payrolls