Econ Practice Final

If the number of employed persons in a country equals 24 million, the number of unemployed persons equals 8 million, and the number of persons over age 16 in the population equals 40 million, the unemployment rate equals: 33% 25% 20% 8%

25%

When the interest rate in an economy increases, it is likely the result of either: a decrease in the government's budget surplus or an increase in its budget deficit. a decrease in the government budget surplus or its budget deficit. an increase in the government budget surplus or a decrease in its budget deficit. an increase in the government budget surplus or its budget deficit.

a decrease in the government's budget surplus or an increase in its budget deficit.

What distinguishes the real value of a statistic from the nominal value of a statistic? timing of announcement adjusting for inflation adjusting for GDP deflator real interest rate

adjusting for inflation

Which of the following will not result in a leftward shift of the market demand curve for labor? a decrease in labor productivity a decrease in demand for the firm's product an increase in the wage rate a decrease in the firm's product price

an increase in the wage rate

Specialization: - Understand leads to greater self-sufficiency. can lead to an increase in overall production. allows workers to develop skills by working on a large number of tasks is always the result of an inefficient use of resources

can lead to an increase in overall production.

A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle are: trough, expansion, recession, peak contraction, recession, expansion, boom expansion, trough, recession, peak expansion, peak, recession, trough

expansion, peak, recession, trough

Investment in human capital: is of minor importance to economic growth. can be acquired through on-the-job training. is an important source of economic growth. is characterized by both b) and c).

is characterized by both b) and c).

The equilibrium quantity of labor and the equilibrium wage increase when: labor supply shifts to the right, if wages are flexible. labor demand shifts to the right, if wages are flexible. labor demand shifts to the left, if wages are flexible. labor supply shifts to the left, if wages are flexible.

labor demand shifts to the right, if wages are flexible.

________________ serves society in three functions: medium of exchange, unit of account, and store of value. Money Currency Barter A double coincidence of wants

money

If government tax policy requires Jane to pay $25,000 in taxes on annual income of $200,000 and Mary to pay $10,000 in tax on annual income of $100,000, then the tax policy is: regressive. progressive. proportional. optional.

progressive

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis. demand price quantity supplied supply

quantity supplied

For firms engaged in international trade, ____________________ can have an enormous effect on profits. swings in exchange rates trade-offs and risks foreign portfolio investment foreign direct investment

swings in exchange rates

If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy reducing or eliminating imports of rice into the country would include: Japan will be able to consume a combination of rice and other goods beyond their domestic production possibilities curve. the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall. the real incomes of Japanese rice consumers would rise, but the real incomes of Japanese rice producers would fall. the price of rice in Japan will fall.

the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall.

If Keynes� law applies during economic contractions and Say�s law applies during economic expansion, how will the three goals of macroeconomics be affected? determinates of total supply for the economy will be traded-off trade-offs and connections may differ in the short run and the long run the economy will face genuine limits to how much can be produced institutional and market structures will connect factors of production

trade-offs and connections may differ in the short run and the long run

Scarcity exists because of: the market mechanism. specialization and division of labor. the allocation of goods by prices unlimited wants and limited resources.

unlimited wants and limited resources

Which of the following is a building block of neoclassical economics? the size of the economy is determined by real GDP sticky wages and prices aggregate demand model wages and prices will adjust in a flexible manner

wages and prices will adjust in a flexible manner