MAC

Question: Which of the following are examples of private property? 1) computers belonging to your college 2) a farmer's land in Soviet Russia 3) shares in a company 4) a worker's skills

1) computers belonging to your college 3) shares in a company

Calculate the number of years it will take $10,000 to double if the interest rate is 6%. A) 1,200 B) 12 C) 16.67 D) 10

B) 12

In a country with a population of 465 million people, 95 million are 16 years of age or younger. There are 345 million people who are employed and 25 million people who are unemployed. Calculate the unemployment rate. A) 5.37% B) 6.75% C) 9.32% D) 5.20%

B) 6.75%

After reading reports of decreased consumer confidence in the economy, firms anticipate lower expected profits on investment in the future. It will A) increase aggregate demand. B) increase aggregate supply. C) decrease aggregate demand. D) decrease aggregate supply.

C) decrease aggregate demand.

Many people, fearing a downturn in the economy, worry that they might lose their jobs in the near future. It will A) increase aggregate demand. B) increase aggregate supply. C) decrease aggregate demand. D) decrease aggregate supply.

C) decrease aggregate demand.

The federal government cuts in funding to several agencies will A) increase aggregate demand. B) increase aggregate supply. C) decrease aggregate demand. D) decrease aggregate supply.

C) decrease aggregate demand.

If the interest rate decreases, A) investment will increase, and the AD curve will shift to the left. B) investment will decrease, and the AD curve will shift to the left. C) investment will increase, and the AD curve will shift to the right. D) investment will decrease, and the AD curve will shift to the right.

C) investment will increase, and the AD curve shifts to the right.

When the estimated unemployment rate equals the sum of frictional and structural unemployment, A) cyclical unemployment is at its maximum value. B) the economy is operating at zero unemployment. C) the economy is operating at the natural rate of unemployment. D) the economy is operating at its minimum output level.

C) the economy is operating at the natural rate of unemployment.

Which of the following statements is NOT correct? A) The expenditures approach adds up expenditures by consumers, businesses, government, and foreigners except imports. B) The income approach adds up income domestically earned by owners of land, workers, businesses, lenders, and government. C) The income approach identifies who earned what income from the production of goods and services. D) The income approach and expenditures approach should not produce the same result

D) The income approach and expenditures approach should not produce the same result

The graphical relationship between the price level and the amount of real GDP that is made up of consumer, business, and government purchases plus net exports is known as A) the aggregate expenditures demand curve. B) the aggregate supply curve. C) the government purchases curve. D) the aggregate demand curve.

D) the aggregate demand curve.

Real GDP is calculated as A) nominal GDP multiplied by the price index. B) the output of goods and services in each year multiplied by each year's price index. C) the output in each year multiplied by each year's prices. D) the output in each year multiplied by the prices in the base year.

D) the output in each year multiplied by the prices in the base year.

Compared to last year, the exports for a small country have decreased by $2 million and the imports have decreased by $6 million. If no other line items for GDP change, how will GDP change based on the events above? a. GDP will increase by $4 million. b. GDP will decrease by $4 million. c. GDP will increase by $8 million. d. GDP will decrease by $8 million.

a. GDP will increase by $4 million.

What is an example of command in the market system? a. Taxation. b. Tipping. c. Bonuses. d. Holiday gift-giving.

a. Taxation.

Most economists agree that the cause of the business cycle is changes in a. The level of aggregate spending (expenditure). b. The level of the stock market. c. The level of export. d. The level of technological progress. e. The level of available resources.

a. The level of aggregate spending (expenditure).

Who loses from inflation? a. debtors. b. income receiver whose income adopts cost-of-living adjustments. c. income receiver whose income is indexed to CPI. d. income receivers who earn minimum wage.

a. debtors.

Determine whether the effect the situation described below is attributed to. A) When the overall price level rises, it becomes cheaper for you to take a trip to Mexico than to take a trip to Florida. B) When the overall price level rises, the $100 you have in your savings account, which used to allow you to purchase 50 gallons of gas, now can buy only 30 gallons. C) You used to be charged for 20% interest rate on your credit card. When the overall price level rises, you

a. foreign purchase b. real balance c. interest rate

In pure labor markets, ________ are main buyers of labor services, and_______ are main sellers of labor services. a. workers; companies b. companies; workers c. companies; government d. government; companies

b. companies; workers

Assume the total real output of a developing country increases from $8 billion to $8.2 billion while its population expands from 14 to 15 million people from one year to the next. Over the years, real GDP per capita has a. increased by $25 per person. b. decreased by $25 per person. c. increased by $533 per person. d. decreased by $533 per person.

b. decreased by $25 per person. 8000M/14M = 571 8200M/15M = 546 546 - 571 = -25

Which of the following is a major category for the Consumer Price Index? a. money. b. housing. c. capital goods. d. export.

b. housing.

The CPI compiled by the Bureau of Labor Statistics is used in the computation for the a. unemployment rate. b. inflation rate. c. interest rate. d. GDP.

b. inflation rate.

The annual inflation rate measures the percentage growth rate of ______ a. the CPI from the base period 1982-1984 to a given year. b. the CPI from one year to the next. c. real GDP from the base period 1982-1984 to a given year. d. real GDP from one year to the next.

b. the CPI from one year to the next.

Sam has experienced inflation. This means a. the prices of all consumer goods and services have increased. b. the general (average) prices of consumer goods and services have increased. c. the prices of financial assets have increased. d. the purchasing power of money increases.

b. the general (average) prices of consumer goods and services have increased.

During the Covid-19 period, many workers voluntarily resigned from their work, which is called "Great Resignation". What would happen to the labor market? a. wages rise and employment to rise. b. wages rise and employment to fall. c. wages fall and employment to rise. d. wages 1 Double-click to hide white space 11.

b. wages rise and employment to fall.

Which of the following activities is counted in GDP? a. Social security check from the government. b. Microsoft stock. c. Export d. Used appliances. e. Intermediate

c. Export

Why do we learn Macroeconomics separately from Microeconomics? a. Economics was originally invented to study the economy as a whole. b. Opportunity cost c. Fallacy of composition d. There is no such thing as Microeconomics

c. Fallacy of composition

If GDP grows at 3% each year, how long does it take for the GDP to double? a. 3 years b. 6 years c. 12 years d. 24 years

d. 24 years 72/3 = 24

If you want to earn a real rate of interest of 5% and expect an inflation rate of 3%, what should be the nominal interest rate you would be willing to accept? a. 2% b. 3% с. 5% d. 8%

d. 8% nominal rate = real rate + inflation

What is the role of prices in the market system? a. Prices can act as a signal (incentive) to both producers and consumers. b. Prices are used to efficiently distribute goods and resources throughout the economy. c. Prices provide a standard measure of value throughout the world. d. All of the above.

d. All of the above.

Which of the following answer does NOT describes a consumption expenditure category? a. Education. b. Vehicle for personal use. c. Groceries. d. Buying a newly built house. е. Medical treatment

d. Buying a newly built house.

What is NOT the correct statement about the different types of unemployment? a. Cyclical unemployment can be reduced by more spending in the economy b. Structural unemployment can be reduced by training or education programs. c. Frictional unemployment can be reduced through career services offices that help unemployed workers find employers. d. Frictional unemployment usually lasts longer than structural unemployment.

d. Frictional unemployment usually lasts longer than structural unemployment.

Which of the following activities is excluded from GDP, causing GDP to understate a nation's production? a. Goods and services produced by firms. b. Goods and services produced by the government. c. Goods and services purchased by foreigners. d. Goods and services produced in the underground economy (black market).

d. Goods and services produced in the underground economy (black market).

When using the income approach, what is NOT considered to calculate GDP? a. Wages b. Profits c. Interest d. Net export e. Rents

d. Net export

What is NOT the correct statement about the traditional economic system? a. Social institutions determine who does what and who gets what. b. Mutual gift giving (reciprocity) served as a kind of insurance system'. c. Penalty for breaking social rules and codes of behavior was social disapproval. d. The production capacity of the economy dramatically expanded. e. Social institutions were not effective for organizing production and distribution in a larger group (the whole nation).

d. The production capacity of the economy dramatically expanded.

Which inflation is more likely to be associated with stagflation? a. demand-pull inflation b. imported inflation c. market power inflation d. cost-push inflation

d. cost-push inflation

What is a reason why deflation is detrimental is to the economy? a. deflation decreases the real value of debt burden on borrowers. b. deflation makes consumers spend too much. c. deflation generates too much profits for businesses d. deflation leads to falling asset prices, which, in turn, hits personal wealth and confidence.

d. deflation leads to falling asset prices, which, in turn, hits personal wealth and confidence.

What is NOT a correct statement about neoclassical macroeconomics? a. consumers are ultimate regulators. b. unemployment benefits hurt workers in terms of lower pay and less job opportunities. c. price controls create disequilibrium in markets. d. demand creates its own supply.

d. demand creates its own supply.

What is NOT to blame for unemployment according to neoclassical economists? a. labor union. b. long-term contract. c. efficiency wage. d. flexible wage.

d. flexible wage.

What is NOT a correct statement of inflation? a. headline inflation is more volatile than core inflation because of food and energy prices. b. inflation premium can protect lenders from inflation. c. inflation is pro-cyclical because demand for goods and services usually changes more than their supply. d. government spending is always inflationary.

d. government spending is always inflationary.

What is NOT a correct statement of inflation? a. tariff (taxes on imports) can cause imported inflation. b. strong enforcement of anti-trust law can reduce market power inflation. c. deregulation, tax credit or subsidy to encourage production can reduce cost-push inflation. d. lower interest rates can reduce demand-pull inflation.

d. lower interest rates can reduce demand-pull inflation.

What is NOT a correct statement about crowding out? a. it is caused by the government budget deficit (G > T) b. it increases interest rates c. it lowers consumption and investment d. none of the above.

d. none of the above.

What is NOT a reason why US have experienced high inflation since 2021? a. supply shocks such as Covid-19 and Russian's invasion to Ukraine b. firms with market power increased markups over the costs. c. US consumers started to spend the savings they accumulated in 2020 d. none of the above.

d. none of the above.

What is the necessary and sufficient condition for full utilization of resources, including labor? a. equilibrium in the labor market b. equilibrium in the loanable funds market c. balanced budget of the government d. perfectly flexible wages, prices, and interest rates.

d. perfectly flexible wages, prices, and interest rates.

Demand-pull inflation occurs when there is a. high interest rate. b. rising labor costs. c. supply shocks. d. too much money chasing after too few goods.

d. too much money chasing after too few goods.

What is NOT the correct statement about unemployment? a. Lower-skilled, younger, colored, less-educated, blue-collar workers tend to have higher rate of unemployment. b. Underemployment rate is always higher than unemployment rate. c. If an employee has overqualified education, experience, or skills, he or she is underemployed. d. US adopts employment-at-will doctrine, which makes it easier for US companies to hire and fire workers. e. Full Employment is zero rate of unemployment.

e. Full Employment is zero rate of unemployment.

What does NOT cause economic growth according to the production function? a. Discoveries of new deposits of natural resources. b. Immigration. c. Technological innovations. d. Capital goods production. e. War

e. War

Which unemployment is inevitable(unavoidable)? Label each of the following scenarios as either frictional unemployment, structural unemployment, or cyclical unemployment. Q1: Tim just graduates from college and is looking for a job. Q2: A recession causes a local factory to lay off 50 workers. Q3: Thousands of bus and taxi drivers permanently lose their jobs when Uber and Lyft start to provide similar services. Q4: Hundreds of New York legal jobs permanently disappear when a lot of legal work gets outsourced to lawyers in India. Q5: Frank was fired because he was caught napping on the job. He starts searching for the job right away. Q6: Esther was a cashier at a Target. Recently, she was let go due to self-checkout scanners. Q7: Pam is a server at a restaurant. The food at the restaurant is not good so the restaurant closes. She is now searching for another job.

1. frictional 2. cyclical 3. structural 4. structural 5. frictional 6. structural 7. frictional

Most economists agree that the immediate cause of the large majority of cyclical changes in the levels of real output and employment is unexpected changes in _______. A) The level of total spending. B) The level of the stock market. C) The level of the trade deficit. D) The level of unemployment.

A) The level of total spending.

If employment and output are at their lowest levels A) a trough in the business cycle is occurring. B) a peak in the business cycle is occurring. C) cyclical unemployment is occurring. D) an expansion in the business cycle is occurring.

A) a trough in the business cycle is occurring.

Gross investment includes A) business fixed investment, inventory changes, residential investment, and R&D B) business fixed investment, inventory changes, stock and bond investment, and R&D C) business fixed investment, non-inventory changes, residential investment, and R&D. D) business fixed investment, inventory changes, residential investment, education, and R&D.

A) business fixed investment, inventory changes, residential investment, and R&D

A decrease in personal taxes will A) increase aggregate demand. B) increase aggregate supply. C) decrease aggregate demand. D) decrease aggregate supply.

A) increase aggregate demand.

Home prices in the economy continue to increase. It will A) increase aggregate demand. B) increase aggregate supply. C) decrease aggregate demand. D) decrease aggregate supply.

A) increase aggregate demand.

Many state legislatures around the country pass new laws expanding the construction of roads and bridges. A) increase aggregate demand. B) increase aggregate supply. C) decrease aggregate demand. D) decrease aggregate supply.

A) increase aggregate demand.

The invention of the Internet causes firms in the economy to purchase new computers in order to build and maintain an online presence. A) increase aggregate demand. B) increase aggregate supply. C) decrease aggregate demand. D) decrease aggregate supply.

A) increase aggregate demand.

Throughout most of history, the average individual experienced standards of living that were ________ until the Industrial Revolution produced an era of increasing economic growth. A) stable B) rising C) falling

A) stable

The interest rate, real balances, and foreign purchase effects help explain A) the shape of the aggregate demand curve. B) why monetary policy is not used to curb unemployment. C) when the aggregate demand curve shifts to the left or right. D) how we determine the price level.

A) the shape of the aggregate demand curve.

A stock market crash dramatically reduces the amount of wealth in the economy. It will A) increase aggregate demand. B) increase aggregate supply. C) decrease aggregate demand. D) decrease aggregate supply.

C) decrease aggregate demand.

Which of the following goods or services ARE excluded from GDP? A) The government's purchase of tanks from a military supplier. B) The production of fruits and vegetables in someone's private backyard garden. C) A haircut at the barbershop D) The purchase of a new car. E) The purchase of a new house. F) The purchase of a new machine. G) The private tutoring service in cash that is not reported to the IRS

B) The production of fruits and vegetables in someone's private backyard garden. G) The private tutoring service in cash that is not reported to the IRS

If the value of the U.S. dollar increases relative to other currencies, we should see A) a movement along the aggregate demand curve. B) the aggregate demand curve shifts to the left. C) the aggregate demand curve shifts to the right. D) a decrease in U.S. imports.

B) the aggregate demand curve shift to the left.

Which of the following is not an intermediate good? A) Tires used in a Honda automobile plant. B) Fabric used in a clothing manufacturing plant. C) A facial at a spa. D) Milk used in cheese.

C) A facial at a spa.

Lucy goes out to a local restaurant for lunch. Her purchased lunch represents A) a consumer durable. B) a consumer nondurable. C) a service. D) either a consumer nondurable or a service—it fits into both categories.

C) a service.

Capital goods and consumption goods differ in that A) the production of consumption goods is not impacted by the law of increasing opportunity costs. B) the government sector produces capital goods, and the business sector produces consumption goods. C) capital goods are used to produce other goods and consumption goods are end products. D) the government sector produces consumption goods, and the business sector produces capital goods.

C) capital goods are used to produce other goods and consumption goods are end products.

When using the expenditures approach, in US, the largest sector of GDP is usually the A) net exports sector. B) investment sector. C) consumer sector. D) government sector.

C) consumer sector.

As a result of natural disasters in Canada, income in Canada has fallen significantly. It will A) increase aggregate demand of the US economy. B) increase aggregate supply of the US economy. C) decrease aggregate demand of the US economy. D) decrease aggregate supply of the US economy.

C) decrease aggregate demand of US economy.

What will happen to the neoclassical labor market when Biden changes immigration policy in such a way that more working and entrepreneurial immigrants are entering into US? a. labor supply curve shifts to the right; labor demand curve shifts to the right b. labor supply curve shifts to the left; labor demand curve shifts to the left c. labor supply curve shifts to the right; labor demand curve remains the same d. labor supply curve shifts to the left; labor demand curve remains the same

a. labor supply curve shifts to the right; labor demand curve shifts to the right

What are the two main reasons for the Great Inflation period in the 1970s? Select Two answers. a. oil shocks b. strong labor union с. deregulation d. globalization

a. oil shocks b. strong labor union

What will happen to the interest rate and the equilibrium level of saving and investment if businesses expect stronger revenue flows from potential investment projects? a. the interest rate will increase; saving and investment will increase. b. the interest rate will increase; saving and investment will decrease. c. the interest rate will decrease; saving and investment will increase. d. the interest rate will decrease; saving and investment will decrease.

a. the interest rate will increase; saving and investment will increase.

What will happen to the interest rate and the equilibrium level of saving and investment if the government lowers corporate taxes? a. the interest rate will increase; saving and investment will increase. b. the interest rate will increase; saving and investment will decrease. c. the interest rate will decrease; saving and investment will increase. d. the interest rate will decrease; saving and investment will decrease.

a. the interest rate will increase; saving and investment will increase.

What is NOT a resource (factor of production) in economics? a) Natural Resources. b) Money. c) Human Resources. d) Capital (Reproducible inputs).

b) Money

What is NOT the correct statement about investment in economics? a) The opposite word for investment is consumption. b) Purchasing financial assets (i.e., company shares) is an investment. c) Acquiring capital goods is an investment. d) Buxing a car can be an investment if you are an Uber driver. e) Investment increases labor productivity (and, productive capacity).

b) Purchasing financial assets (i.e., company shares) is an investment.

What is the inflation rate for 2022 when CPI for 2021 and for 2022 are 150 and 145, respectively. a. 3.33% b. - 3.33% с. 3.45% d. - 3.45%

b. - 3.33% (CPI_2022 - CPI_2021)/CPI_2021 * 100

Use the following graph to answer the next question. What caused the declining trend in the labor force participation rate since 2000s"? a. Female workers leaving the labor force. b. Baby boomers retiring. c. Discouraged workers leaving the labor force. d. Voluntary quits due to generous government supports.

b. Baby boomers retiring.

Why do Asian countries such as Japan, South Korea, China, and Taiwan have high levels of investment with low interest rates according to neoclassical economists? a. High level of government spending b. High level of saving c. High level of aggregate demand d. High level of labor supply

b. High level of saving

What is NOT a correct statement about the market economic system? a. Individuals' search for monetary gain is justified and further promoted. b. Market institutions have completely addressed production and distribution problems. c. The important consequence of the right of private property is that it encourages investment, innovation, exchange, maintenance of property, and economic growth. d. Private individuals and firms, not the government, own most of the property resources. e. An economy is largely dis-embedded from political or social intuitions.

b. Market institutions have completely addressed production and distribution problems.

The value of the next-best alternative that is given up when a choice is made is? a. The price of the good. b. The opportunity cost. c. The marginal cost. d. The marginal benefit.

b. The opportunity cost.

Nominal GDP has gone up by 5% although there is no change in the output produced in that year. Why? a. Real GDP has gone up by 5%. b. There was 5% inflation. c. There was 5% population growth. d. The standard of living has gone up by 5%.

b. There was 5% inflation.

Which variable is a counter-cyclical variable? a. Inflation. b. Unemployment. c. Tax revenues. d. Private debt. e. Imports.

b. Unemployment.

What is the equilibrium wage rate? a. Wes b. Wo c. Wed

b. Wo

What is the structural unemployment? a. George used to work in an automotive assembly plant. He was laid off six months ago as the economy weakened. He expects to return to work when national economic conditions improve. b. Sam quit his job and is currently looking for a better job that better fits his interests. c. Jeanette worked for a company that produces manufacturing goods. She recently lost her job when the company moved the factory overseas. job when the company moved the factory overseas. d. Sarah moved to a new place and is currently looking for a job.

c. Jeanette worked for a company that produces manufacturing goods. She recently lost job when the company moved the factory oversea.

Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work with no change in the labor force participation rate. As a result, the a. Official unemployment rate will fall. b. Official unemployment rate will rise. c. Official unemployment rate will remain unchanged. d. The size of the labor force will increase.

c. Official unemployment rate will remain unchanged.

What is NOT the example for the group "not in the labor force"? a. Homeless. b. Full-time students. c. Part-time employees. d. Stay-at-home parents. e. Retirees.

c. Part-time employees.

When the official unemployment rate is greater than the sum of frictional and structural unemployment, a. The economy is operating at the natural rate of unemployment. b. The economy is operating at zero unemployment. c. The economy is in recession. d. The economy is in expansion.

c. The economy is in recession.

When using the expenditures approach, who usually conducts the largest expenditure of GDP in the US? a. US government b. US businesses c. US consumers d. Foreigners

c. US consumers

If your nominal income has gone up 3% and inflation has increased by 5%, what has happened to your real income? a. increased by 2% b. increased by 8% c. decreased by 2% d. decreased by 8%

c. decreased by 2% 3-5 = -2

Suppose the wage is currently Wes and Q1 is the level of employment. Then we should expect the wage to_______? a. rise and employment to rise. b. rise and employment to fall. c. fall and employment to rise. d. fall and employment to fall.

c. fall and employment to rise.

During an economic expansion (boom), workers tend to command higher wages. Why? a. higher supply of workers. b. lower supply of workers. c. higher demand for workers. d. lower demand for workers.

c. higher demand for workers.

A peak in the business cycle? a. occurs when the unemployment rate is at its greatest. b. occurs when the inflation rate is at its lowest. c. is a temporary maximum point of real GDP. d. is a temporary minimum point or real GDP.

c. is a temporary maximum point of real GDP.

What would happen to the neoclassical labor market if there were an income tax cut? a. labor demand curve shifts to the right, thus increasing the before-tax wage. b. labor demand curve shifts to the left, thus decreasing the before-tax wage. c. labor supply curve shifts to the right, thus decreasing the before-tax wage. d. labor supply curve shifts to the left, thus increasing the before-tax wage.

c. labor supply curve shifts to the right, thus decreasing the before-tax wage.

What is NOT the correct statement about the minimum wage legislation according to neoclassical economists? a. if the minimum wage is set above the equilibrium wage, it creates unemployment. b. if the minimum wage is set below the equilibrium wage, it is redundant (ineffective). c. neoclassical economists believe that the federal government should increase the minimum wage. d. some workers who are lucky enough to keep the job will receive higher incomes.

c. neoclassical economists believe that the federal government should increase the minimum wage.

In pure loanable markets, _______ are main supplier of loanable funds, and __________ are main demander of loanable funds. a. borrowers; households b. companies; borrowers c. savers; borrowers d. borrowers; savers

c. savers; borrowers

There will be a shortage of labor in the labor market if a. labor supply increases and demand decreases. b. the current wage is above the equilibrium wage. c. the current wage is below the equilibrium wage. d. there is more government regulation in firms' hiring/firing process.

c. the current wage is below the equilibrium wage.

During the Covid-19 period, households' savings went up significantly, and at the same time, businesses were more reluctant to borrow and invest. Therefore, a. the interest rate remained the same. b. the interest rate increased. c. the interest rate decreased.

c. the interest rate decreased.

Real GDP is calculated as a. nominal GDP divided by each year's prices b. the output in each year multiplied by each year's prices. c. the output in each year multiplied by the prices in the base year. d. nominal GDP multiplied by the price index.

c. the output in each year multiplied by the prices in the base year.

In the labor market shown, at a wage rate of Wes, there would be ______ a. labor shortage equal to Q2 - Qo. b. unemployment equal to Q2 - Qo c. unemployment equal to Q2 - Q1. d. neither labor shortage nor unemployment.

c. unemployment equal to Q2 - Q1.

Suppose a small economy produces $400 billion in GDP in year one. In year two, $420 billion GDP was produced. What is the growth rate of GDP for the country in year 2? a. 1% b. 4% с. 5% d. 10%

с. 5%