MACRO

fixed basket of goods used by the typical consumer

The consumer price index is an index computed using prices of a:

inflation rate

The percentage increase in the cost of living from one year to the next is the;

overstates

Many economists believe the CPI __________ inflation because it fails to consider quality improvements in products.

the value of goods and services evaluated at base year prices

Real GDP is:

nominal GDP to real GDP.

The GDP deflator is 100 times the ratio of;

Interstate construction

Which of the following would be considered a type of government expenditure? Social Security payments Unselected Interest payments on government debt Unselected Interstate construction

intermediate goods

not counted as final goods and hence not included in the calculation of GDP?

Production = expenditure = income

represents the aggregate accounting identity?

Income derived from owning physical and financial capital

Capital income is

recession

A decline in economic activity that lasts at least two consecutive quarters is known as a;

National income accounts.

A framework used to measure the level of aggregate economic activity in a country is known as;

devote more resources to pollution reduction

As the value of a country's real GDP increases, the country is likely to:

not in the labor force

Bill is a college student that is not actively looking for work. He is considered to be;

market value of all final goods and services produced in a country during a period of time

Gross domestic product is best defined as the:

the GDP would be much higher than it is but the well-being of the typical person would not necessarily be higher

If Americans still worked sixty hour weeks, as they did in 1890, __________.

Expenditure on foreign production is already included in the consumption, investment and government expenditure terms

Imports are subtracted from the calculation of GDP in the national income accounting identity because

2/3

In developed economies, labor income accounts for ______ of total income payments.

households

In the circular flow model, who supplies factors of production in exchange for income?

Unemployment, inflation, growth, and trade

Macroeconomics focuses on what topics

Unemployment, inflation, growth, and trade

Macroeconomics focuses on which of the following topics?

nothing

Mariam cleans her house twice a week. This task would cost Mariam $100 a week if she were to hire someone to clean. Mariam's activity adds to the GDP.

labor force that is unemployed.

The unemployment rate is specifically defined as the percentage of the;

consumption

Which is the largest component of GDP?

C

Which letter best represents the demand for factors of production in this circular flow model?

real gdp

Which measure of GDP represents changes in the quantity of goods and services produced in the economy, holding prices constant?

A new house

Which of the following goods and services would be excluded from personal consumption expenditures in the Bureau of Economic Analysis (BEA) statistics?

The purchase of new machines, factories, or houses

Which of the following is included in the economist's definition of investment?

the purchase of new machines , factories or houses

Which of the following is included in the economist's definition of investment?

recessions

Which phase of the business cycle is characterized by increasing levels of unemployment?

Y = C + I +G +X - M

the national income accounting identity?

false

true or false: The inflation rate can only be calculated as the percentage change in the CPI.

It only counts final goods and services and not intermediate goods.

what is not a shortcoming of GDP as a measure of welfare?