Econ

The Leading Economic Index is produced by:

the Conference Board.

The capital-to-labor ratio measures:

the amount of economic capital per worker.

If the growth rate in an economy is 2%, its GDP will double in about:

35 years.

If output equals A x (5K + 2L), what is output if A equals 2,000, capital equals 10, and labor equals 100?

500,000

The Index of Economic Freedom uses all of the following categories EXCEPT:

international exchange.

Developing countries can achieve higher productivity per unit of capital because they can use technologies developed by other countries. This is known as the:

catch-up effect.

The twin perils of the modern macro economy are said to be:

inflation and unemployment.

A stable financial system is important for all of the following reasons EXCEPT:

tax rate stability.

Improvements in production capacity will:

shift the PPF outward.

If the nominal GDP is $13 trillion for a given year and the GDP deflator for that year is 115, then the real GDP is:

$11.3 trillion.

If consumption increases from $500 billion to $575 billion and income increases from $600 billion to $700 billion, the marginal propensity to save is:

0.25.

If income rises from $10,000 to $20,000 and consumption increases from $9,000 to $16,000, then the marginal propensity to consume is:

0.70.

The World Bank defines extreme poverty as a person living on less than:

$1.25 per day.

What is your new salary if you earned $40,000 last year, the consumer price index increased from 120 to 125, and your salary is adjusted by therate of inflation annually?

$41,666.67

If the marginal propensity to save is 0.25 and income increases by $7,540, what is the increase in consumption?

$5,655

Suppose in 2010 the cost of purchasing a basket of goods was $100. That same basket cost $150 in 2011. If 2010 is the base year, the consumer price index for 2011 is:

150.

An economy has a population of 226,500, of whom 12,500 are unemployed and actively seeking work, and 35,000 have given up looking for a job. Also, 28,000 people work part-time, and 151,000 people work full-time. This economy's unemployment rate is

5.5%

If the cost of a typical market basket is 400 in 2018, 410 in 2019, and 405 in 2020, then during this period the economy is undergoing:

deflation.

The National Bureau of Economic Research:

is a nonprofit research organization that dates business cycles in the United States.

Robert lost his job and now takes care of his children while his wife works. Robert has decided helikes his daddy duties. Robert would take a job similar to the one he lost if it was offered, but he is not actively seeking work. How is Robert categorized in the unemployment figures

Robert is not part of the labor force.

U.S. steelworkers who have lost their jobs to workers receiving lower wages overseas are part of________unemployment.

Structural

According to Malthus, a fixed quantity of land and a growing human population will eventually produce:

a stationary state in which growth will cease.

Which of the following factors is NOT generally viewed by economists as critical to economic growth?

access to large amounts of natural resources

When the government records a deed showing that ownership ofa piece of property has passed from oneparty to another, it is acting in its role to promote economic growth by:

ensuring a stable legal system.

If the Bureau of Economic Analysis reports that the annualized U.S. growth rate was 2.5% for the second quarter, then the actual growth rate from the first quarter to the second quarter was:

0.625%.

If nominal GDP in 2014 is $20,000 billion while real GDP is $16,000 billion, then the GDP deflator in 2014 is:

125.

If the marginal propensity to save is 0.2, the value of the spending multiplier will be:

5.

National income and product accounts came about in the United States during the 1930s as a result of:

a lack of reliable economic data.

The GDP deflator for the base year is:

always equal to 100.

Measuring changes in fixed basket of goods to assess changes in price is a method.

cost-of-goods index

The three types of consumption are

durables, nondurables, and services.

Government funding of Los Alamos National Labs is an example of government acting in its role to promote economic growth by:

enhancing physical and human capital.

U.S. business cycles since 1950 have shown:

expansions to be longer than recessions.

The U.S. gross domestic product is equal to the total market value of all:

final goods and services produced by resources in the United States.

Over the past 150 years, the U.S. economy has endured a recession on average about every

four to five years.

As a general rule, the more capital employed with workers, the_____their productivity and the______their earnings.

higher; higher

In the formula for GDP (GDP = C + 1 + G + (X—M)), what does M represent?

imports

In the Keynesian model, the principal determinant of savingis:

income.

The natural gas deposits found in the United States over the past decade are an example of an increase in:

land and natural resources.

A legal system that enforces property rights is important to economic growth because:

legal protection of ideas and technologies gives people who innovate the ability to

An example of intangible infrastructure is:

patent laws.

Economic growth is most accurately measured using:

real GDP per capita.

Suppose the National Activity Index of the Federal Reserve Bank of Chicago hovered around +0.25 for a few months but then dropped to —1.5 in November. Which ofthe following is the best interpretation of this finding?

the economy moved into a recession in November.

The single largest consumer of goods and services in the United States is:

the government.

In general, the higher the capital-to-labor ratio:

the higher the wages.

John Maynard Keynes focused on

to explain how the economy reaches short-term equilibrium employment, output, and income. aggregate spending

Unemployment tends to be highest during the__________stage of the business cycle while there is a greater risk of high demand leading to inflation during the_________stage of the business cycle.

trough; peak

A depression economy has considerable slack, therefore:

unemployment is high.

Which of the following did classical economists believe would happen if the economy experienced a downturn?

The economy would self-correct.

With everything else held constant, if 5% of those considered to be frictionally unemployed found work while the number of people considered to be structurally unemployed increased by 5%, the natural rate of unemployment:

does not change.

Improvements in technology:

explain most of the economic growth in recent decades.

Rocky Gap Furniture hires ten employees working eight hours each to produce 100 rocking chairs. What is the productivity of these workers?

1.25 chairs per hour

Whispering Valley Furniture hires five employees working eight hours each to produce 80 rocking chairs. Rocky Gap Furniture hires ten employees working eight hours each to produce 160 rocking chairs. Which company's workers are more productive?

The two companies' workers are equally productive.

Most economists believe that the consumer price index______the rate of inflation.

overstates

Roughly half of unemployment normally consists of:

people who lost their job.

The relationship between economic freedom and per capita GDP is:

positive.