exam 3 review
in the national income accounts, government expenditure on goods and services refer to those purchased by?
all levels of government
to calculate GDP using the expenditure approach, in part it is necessary to add exports and subtract imports?
true
what is not included in the income approach to measuring GDP?
net exports
the word "final" in the definition of GDP refers to?
not counting intermediate goods or services
nominal GDP increases when the price of goods and services increase?
true
during 2014, the country of economia had a real GDP of $115 billion and the population was .9 billion. in 2013, real GDP was $105 billion and population was .85 billion. in 2013, real GDP per person was?
$124
if compensation expenditures are $500M, net investment is $100M, depreciation equals $5M, imports are $50M, government expenditures on goods and services is $220M, and government transfer payments are $20M, then GDP is?
$830M
all of the following are included in gross private domestic investment expenditure
-buisnesses purchase of a fleet of cars -a retail stores purchase of shoes to add to the inventory -households purchase of a new house
what are components for computing GDP based upon the income approach?
-corporate profits -net interest -compensation of employees
three types of unemployment?
-frictional -structural -cyclical
the income approach measures GDP by adding together compensation of employees, proprietors' income, _____________?
-net interests -rental income -corporate profits
the calculation of the final goods and services sold in an economy would include?
-the purchase of a service by a household -ford motor company purchasing new robots to produce cars -the purchase of a lawnmower by a household
suppose the economy is experiencing frictional unemployment of 1%, structural unemployment of 3%, and cyclical unemployment of 4%. what is the natural unemployment rate?
4%
which of the following are equal to one another? 1 aggregate production 2 aggregate expenditure 3 aggregate income
1 equals 2 equals 3
at the end of last year the CPI equals 120. at the end of this year, the CPI equals 132. what is the inflation rate over this year?
10% 120/132=x/100, 90.9
suppose the total labor force is 100 individuals with 10 unemployed. the unemployment rate is _______. now assume that 10 people drop out of the labor force and that 10 remain unemployed. the new unemployment rate is _______?
10% ; 11%
if the number of people unemployed is 100, the number of people employed is 1000, and the working age population is 1400, then the labor force is?
1100
in an economy, 42 million people are in the labor force, 38 million are employed, 47 million are working age. how many people are not in the labor force?
5 million
if the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed and 150 million employed, the unemployment rate is?
6.25 %
in 2011, armenia had a real GDP of $4.21 billion and a population of 2.98 million. in 2012, real GDP was $4.59 billion and the population was 2.97 million. what was armenias economic growth rate from 2011 to 2012?
9 percent
let C represent consumption expenditures, S savings, I gross private domestic investment, G government expenditure on goods and services, and X-M net exports of goods and services. then GDP equals?
C+I+G+X-M
choose the best statement?
GDP equals aggregate expenditure and equals aggregate income
if ford sells 200 explorers for a total of $400,000 to Germany, while the US imports 100 BMWs for $500,000 from Germany?
US GDP decreases because net exports are negative
if an american firm produces goods sold to a german household, then?
US GDP increases
the unemployment rate is calculated as?
[(unemployment)/(labor force)] x 100
growers expect the price of bushels of wheat will increase in one month. this belief results in?
a decrease in current supply of wheat
a loaf of bread purchased by one of your instructors would be best described as?
a final good
a minimum wage
a price floor in the labor market
if the quantity supplied exceeds the quantity demanded, then there is ____________?
a surplus and the price is above the equilibrium price
the best definition of economic growth is?
a sustained expansion of production possibilities measured as the increase in real GDP over a given period
to calculate GDP using the expenditure approach, in art it is necessary to?
add exports and subtract imports
to calculate GDP using the expenditure approach, in part it is necessary to?
add exports and subtract imports
if nike, an american corporation, produced sneakers in thailand this would
add to thailands GDP but not to the USs GDP
what shifts the supply curve of hamburgers?
an increase in the price of meat used to produce the burgers
a ton of coal purchased by your local to burn to make electricity would best be described as?
an intermediate good
discouraged workers _________ counted as officially unemployed because they?
are not; are not actively seeking work
how do price adjustments eliminate shortage?
as the price rises, the quantity demanded decreases while the quantity supplied increases
nominal GDP is the value of final goods and services?
at the prices of that year
normal GDP is the value of final goods and services?
at the prices of the year
with rent control set below the equilibrium rent, what mechanism might arise that moves the market closer to the efficient equilibrium?
black market activity
the largest component of national income is?
compensation of employees
goods that are produced this year, stored in inventories, and then sold to consumers next year ?
count in this years GDP
the equilibrium price is the price at which the quantity?
demanded equals the quantity supplied
gross investment equals net investment plus?
depreciation
suppose mail boxes etc. buys a new copier for its store for $1000. a year later when the firm wants to upgrade to a new copier, it finds that the old one is only worth $750. over the year the copier was used, ___________ has occurred.
depreciation
net exports of goods and services equal the?
exports of goods and services minus the imports of goods and services
the circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services?
false
the circular flow shows that aggregate spending is larger than aggregate income because people save?
false
the expenditure approach to measuring GDP includes firms spending on wages?
false
gross domestic product is a measure of the total value of all?
final goods and services produced in an economy over a period of time
the factor market can best be described as where?
firms buy the services of labor, land, and capital
what is a final good?
flour purchased at the store to bake cookies
the circular flow shows that consumer goods and services produced by business firms are sold in the?
good market
rent control
government control & regulation of the amounts charged for rented houses
price ceiling
government imposed price control and limit on how high a price is charged for a product
price floor
government or group imposed price control or limit on how low a price can be charged for a product
net investment equals?
gross investment minus depreciation
a rent ceiling set above the equilibrium rent ___________?
has no effect on the market outcome
in the circular flow of income?
households demand goods and services that are supplied by firms, while supplying factories that are demanded by firms
including marginally attached workers in the calculation rate would?
increase the reported rate
an increase in exports of goods or services with no change in imports of goods or services?
increases GDP
an increase in the price level is best defined as?
inflation
what is not a component for computing GDP based upon the income approach?
investment
if a new and better good replaced an older less expensive good, then the price level measured by the CPI _______?
is higher than the actual price level
a price ceiling __________?
makes it illegal to charge a higher price than the specified price
if the price of a cd is equal to the equilibrium price, there will b a _________ of cds and the price will __________?
neither a shortage nor surplus; not change
in calculating GDP, household production is?
not included because there is no market transaction
unemployed
not working but looking for a job
the labor force is the sum of the?
number of people employed and number of people not employed
a new 2015 Honda civic produced in2015 and purchased in 2016 is?
part of GDP in 2015
the working age population can be divided into two groups?
people in the labor force and people that are not in the labor force
what is not included in real GDP?
production that takes place in the underground economy
what is used to calculate the standard of living?
real GDP/ population
__________ gross domestic product is the value of ___________ linked back to the prices of a single year?
real; total production
when demand increases, the equilibrium price __________ and the equilibrium quantity ___________.
rises; increases
the first step in measuring CPI is to?
select the market basket
the circular flow shows that the household earns its income by?
selling factors of production
the circular flow shows that the households sector earns its income by?
selling factors of production
the unemployment rate will never equal 0% because?
some portion of the labor force will always be between jobs
substitution bias in the CPI refers to the fact that the CPI?
takes no account of the substitution of goods by consumers when relative prices change
cyclical unemployment is the result of?
the business cycle
the series of ups and downs the economy seems to move in is called?
the business cycle
if depreciation exceeds gross investment, net investment is negative?
true
the circular flow diagram shows?
the flows between different sectors of the economy
2 methods of measuring GDP?
the income approach and the investment approach
when calculating GDP, underground economic activity is?
the part of the economy purposely hidden
if a market is not in equilibrium, then what will likely occur?
the price will adjust to bring the market to equilibrium
GDP can be computed as the sum of?
the total expenditures of consumption, investment, government expenditure on goods and services, and net exports over a period of time
net exports are negative if?
the value of imports exceeds the value of exports
real GDP is?
the value of total production linked back to the prices of a single year
intermediate goods are excluded form GDP because?
their inclusion would involve double counting
when IBM, an american firm, produces computer chips in another country, this production is not included in the US GDP because the production did not take place in the US?
true
full employment occurs when?
unemployment rate equals the natural unemployment rate
a purchase that is included in personal consumption expenditures when determining GDP?
vacation expenses for a spring trip to fort lauderdale
in the definition of GDP, "market value" refers to?
valuing production according to the market price
component to the incomes approach to GDP?
wages and salaries
what is a component of the incomes approach to GDP?
wages and salaries
the labor force participation rate is percentage of the _________ who are in the labor force?
working age population