Macro Ch. 5-7

period of NASDAQ crashed, had three quarters straight of negative growth, unemployment skyrocketed

2000s

period where GDP steady, unemployment steadily falling, inflation low, no major events

2010-2016

Unstable period, large influxation & deflation, major event caused stagflation

70s

period where GDP is steady and inflation back under control midway through period, two major events with second oil price spike

80s

great period & great economy, unemployment raised then declined, middle class income increased

90s

period when housing bubble popped in 2008

Great Recession

An unanticipated increase in inflation will a. benefit debtors b. benefit creditors c. hurt both debtors and creditors d. benefit both creditors and debtors

a

Macroeconomists study a. decision of households and firms b. economy-wide phenomena c. the interaction of households and firms d. regulations of firms and unions

a

Over the last few decades Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, a. increased measured GDP b. reduced measured GDP c. did not affect measured GDP d. affected measured GDP only to the extent that people eat more at restaurants than at home

a

The single largest expenditure component in GDP is a. consumption b. investment c. government spending d. net exports

a

Which US gov agency calculates the CPI a. The Bureau of Labor Statistics (BLS) b. the National Bureau of Economic Research c. The St. Louis Federal Reserve Bank d. The Bureau of Economic Analysis (BEA) e. the Federal Bureau of Investigation

a

Which of the following statement about GDP is most accurate? a. Nominal GDP values production at current prices, while real GDP values production at constant prices. b. Nominal GDP values production at constant prices, while real GDP values production at current prices. c. Nominal GDP values production at market prices, while real GDP values production at the cost of the resources used in the production process. d. Nominal GDP consistently underestimates the value of production, while real GDP consistently overestimates the value of production.

a

According to the Keynesian model, excessive unemployment a. could not persist because supply for labor would rise to eliminate the excess supply of labor b. is caused by "sticky" wages that do not adjust as fast as prices c. is created by government intervention in markets d. could not persist because wages would fall to eliminate the excess supply of labor

b

An unanticipated decrease in inflation will a. benefit debtors b. benefit creditors c. hurt both debtors and creditors d. benefit both creditors and debtors

b

Darla, a Canadian citizen, only works in the United States. The value added to production from her employment is a. included in both US GDP and US GNP b. included in US GDP but not US GNP c. included in US GNP, but not US GDP d. not included in either US GDP or US GNP

b

Expenditures equal income because a. by law firms must pay out all their revenue as income to someone b. for every sale there is a buyer and seller c. because ultimately firms are owned by households d. None of the above is correct

b

Grapes are a. always counted as an intermediate good b. counted as an intermediate good only if they are used to produced another good like wine c. counted as an intermediate good only if they are consumed d. counted as an intermediate good whether they are used to produced another good or consumed

b

Real GDP a. evaluates current production at current prices b. evaluates current production at the prices that prevailed in some specific year in the past c. is not a valid measure of the economy's performance, since prices change from year to year d. is a measure of the value of goods only, hence, it excludes the value of service

b

The 3 main concerns of Macroeconomics are a. output growth, exchange rates, and standard of living b. inflation, unemployment, and output growth c. unemployment, shortages, and recessions d. inflation output growth, and the trade deficit

b

US GNP is calculated from US GDP by a. including income earned by foreigners in the US and excluding income earned by US citizens abroad b. including income earned by US citizens abroad and excluding income earned by foreigners in the US c. including income earned by foreigners in the US d. excluding income earned by US citizens abroad

b

When economists talk about growth in the economy, they measure that growth with the a. absolute change in nominal GDP b. percentage change in real GDP c. absolute change in real GDP d. percentage change in nominal GDP

b

Which of these is a quote by John Maynard Keynes? a. "Inflation is taxation without legislation: b. "In the long-run, we are all dead." c. "The past is never dead. Its not even past." d. "Inflation is public enemy #1." e. "I do not entertain."

b

From a historical perspective, since 1987, inflation has been a. high and volatile b. rising c. low and steady d. at zero

c

Some workers are unemployed because the manufacturing sector is shrinking and the health care sector is growing. This is an example of a. frictional unemployment b. structural unemployment c. cyclical unemployment rate d. discouraged workers

c

The CPI stands for a. the Consumption Price Index b. the Costs of Production Index c. The Consumer Price Index d. The Conspiracy Probability Indix

c

The natural rate of unemployment is generally thought of as the a. sum of frictional unemployment and cyclical unemployment b. sum of structural unemployment and cyclical unemployment a. sum of frictional unemployment and structural unemployment d. ratio of the frictional unemployment rate to the cyclical unemployment rate

c

Which of the following statistics is the best single measure of an economy's well-being? a. the unemployment rate b. the inflation rate c. GDP d. the trade deficit

c

A period during which aggregate output falls is known as a. deflation b. inflation c. expansion d. recession

d

According to the Classical model, excessive unemployment a. could not persist because supply for labor would rise to eliminate the excess supply of labor b. could be eliminated through government intervention c. could not persist because "sticky" wages do not respond to changing prices d. could not persist because wages would fall to eliminate the excess supply of labor

d

Inflation is a. increase in the overall level of economic activity b. decrease in the overall price level c. decrease in the overall level of economic activity d. increase in the overall price level

d

Which US government agency estimates GDP? a. the Bureau of Labor Statistics (BLS) b. the National Bureau of Economic Research c. the St. Louis Federal Reserve Bank d. the Bureau of Economic Analysis (BEA) e. the Federal Bureau of Investigation (FBI)

d

Which of the following is counted in GDP? a. the estimated value of housework b. the value of used goods sold at garage sales c. the value of newly issues stocks and bonds d. None of the above are included in GDP

d

Which of the following is a cost of anticipated high inflation a. the menu cost of inflation b. the shoeleather of inflation c. high inflation risk premiums d. all of the above are correct e. a & b

e

Which of the following will lead to a long-run growth in the productivity of labor (Y/L)? a. increases in capital stock b. increases in level of technology c. increases in price level d. all of the above e. a & b

e

Which of the following will lead to a long-run growth? a. increases in capital stock b. increases in level of technology c. increases in the price level d. all of the above e. a & b

e

stagflation

lower output & higher unemployment

Boom

period from a trough (bottom of cycle) to a peak (top of cycle) during which output & employment grow

Recession

period when aggregate output declines

Depression

prolonged a deep recession