Econ Exam 2 practice questions

The equation for GDP using the expenditure approach is

GDP​ = C​ + I​ + G​ + EX minus IM

Structural unemployment is the

The portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries.

The unemployment rate is

(labor force minus− ​employed)/labor force times× 100.

The unemployment rate equals

(labor force - employed)/labor force unemployed/labor force

If the labor force is 500 and employment is​ 450, then the unemployment rate is

10%

Employed-14,000 people Unemployed-3,000 people Not in the Labor Force-4,000 people The unemployment rate is?

17.6%

Employed -14,000 people Unemployed-3,000 people Not in the Labor Force-4,000 people The labor force equals?

17000

If Logan received a​ $2,500 bonus and his MPS is​ 0.20, his consumption rises by​ $________ and his saving rises by​ $________.

2,000; 500

If the labor force is 50 million and 48 million are employed then the unemployment rate​ is:

4%

Labor force participation rate - 60% Total pop 16 yrs of age & older 200 mil Unemployment rate 5% The total number of people unemployed is?

6 million

Employed-14,000 people Unemployed-3,000 people Not in the Labor Force-4,000 people The​ labor-force participation rate is?

80.9%

Employed-14,000 people Unemployed-3,000 people Not in the Labor Force-4,000 people The employment rate is?

82.4%

Which of the following groups over 19 years of age had the highest unemployment rate in the United States in​ 2015?

African American men

The total market value of all final goods and services produced within a given period by factors of production located within a country is

GDP

Which of the following is a topic studied in​ Macroeconomics?

GDP

Which of the following is included in both the U.S. GDP and​ GNP?

The value of all cars produced by General Motors in the U.S.

Saving equals

Y-C

Which of the following is an example of a final good or​ service?

a computer purchased by Federal express to track shipments

Which of the following is a good or service counted in​ GDP?

a new tire you buy for your personal car

A period when the economy shrinks is known as

a recession, contraction, and slump

Which of the following is a topic studied in​ Macroeconomics?

aggregate behavior of households and industries

Gross national product is the total market value of

all final goods and services produced by resources owned by a country, regardless of where production takes place

In a business​ cycle, a peak represents the end of​ ________ and a trough represents the end of​ ________.

an expansion, a recession

A structurally unemployed person is

an individual who cannot find a job because his or her job skills have become obsolete.

Unemployment means that

at the going wage rate, there are people who want to work but cannot find work

In a closed economy with no​ government, aggregate expenditure is

consumption plus investment.

Which prices are used to measure goods and services in calculating​ GDP?

current prices

When the Fed slows the rate of growth of the money supply to slow down the​ economy, the unemployment type that will be directly affected is the

cyclical unemployment

The demand for refrigerators falls when the economy enters a downturn. If a refrigerator manufacturer lays off workers during an economic​ downturn, this would be an example of

cyclical unemployment.

Higher interest rates are likely to

decrease consumer spending and increase consumer saving.

Uncertainty about the future is likely to

decrease current spending.

When an individual quits​ his/her job and decides to stay at home for a​ while, the​ labor-force participation rate

decreases.

A prolonged and deep recession is called

depression

A period during which aggregate output rises is known as​ a(n)

expansion

When an economics professor quits​ his/her job at a university and starts looking for a better job in another​ university, he/she is

frictionally unemployed.

A period of very rapid increase in the overall price level is known as

hyperinflation

Cheryl graduated from college a month ago and is now without work. She accepted a job that will start next month. ​Today, Cheryl is

in the labor force.

An increase in the overall price level is known as

inflation

The term​ 'stagflation' was created in the​ 1970's to describe an economy experiencing both

inflation and economic stagnation

If the MPS is​ .60, MPC

is .40.

Discouraged workers are

not considered as part of the labor force

Double counting can be avoided by

not counting the value of intermediate goods in GDP

Inflation is an increase in

overall price level

Consumption is

positively related to household income and wealth and​ households' expectations about the​ future, but negatively related to interest rates.

The mechanism that normally coordinates what goes on in an economy is the

price system

The period in the business cycle from a peak to a trough is a

recession, slump and contraction

Unemployment generally​ ________ during recessions and​ ________ during expansions.

rises, falls

The demand for corn has increased in May without any change in supply. Eight months later there still has been no change in corn prices. This is an example of a

sticky price

An individual who cannot find a job because his or her job skills have become obsolete is an example of

structural unemployment.

Telephone operators who have lost their jobs as a result of computerized switchboards are an example of

structural unemployment.

The natural rate of unemployment is generally thought of as the

sum of frictional unemployment and structural unemployment.

The data in the national income and product accounts are compiled by

the Bureau of Economic Analysis.

Profits earned in the United States by​ foreign-owned companies are included in

the U.S. GDP but not GNP.

Which of the following would be counted in​ 2016's GDP?

the bonus check a stockbroker gets from​ his/her company in 2016

The MPC is

the change in consumption divided by the change in income.

The MPS is

the change in saving divided by the change in income.

Which of the following is an example of an intermediate​ good?

the chocolate chips you purchase to make cookies to sell at a bake sale for your​ kids' school the pizza sauce you purchase to make pizzas to sell for a​ fund-raiser for an organization you belong to

The number of people unemployed equals

the labor force minus the number of people employed

Which of the following would not be counted in​ 2016's GDP?

the value of a 2008 boat you purchase from a boat dealer in 2016 the value of a motor that is used in the production of a lawn mower

Gross domestic product measures

the value of all output in the economy. the total income of everyone in the economy. the total spending of everyone in the economy.

If no foreign companies produce in a​ country, but many of the​ country's companies produce​ abroad, then

the​ country's GNP will tend to exceed its GDP.

In a business​ cycle, the end of a recession is represented by

trough

Value added is the difference between the value of good as they leave a stage of production and cost of the goods as they entered that stage of production.

true

It has become conventional to classify an economic downturn as a recession when aggregate output declines for

two consecutive quarters

The value of what KFC produces in Japan is included in the U.S.​ ________ and in the Japanese​ ________.

​GNP; GDP