macro final

$1 billion.

(Consider This) According to the Consider This box on patents and innovation, the cost for U.S. and European drug companies to research, patent, and safety-test a new drug is about:

real interest rates and investment spending both declined.

(Consider This) During the Great Recession of 2007-2009:

South Korea's market economy has significantly outperformed North Korea's command economy.

(Consider This) Since World War II:

private property eliminates the possibility that resource arrangements will be random.

(Last Word) According to economist Donald Boudreaux:

decreases consumption by moving downward along a specific consumption schedule.

A decline in disposable income:

Firms are better able to attract inputs, as these inputs do not have to share the risk.

A market system tends to restrict business risk to owners and investors. This results in which of the following benefits?

can be found by summing C + Ig + G + Xn.

A nation's gross domestic product (GDP):

is based on value judgments.

A normative statement is one that:

the mix of output that will maximize society's satisfaction.

Allocative efficiency involves determining:

when gross investment exceeds replacement investment.

An economy is enlarging its stock of capital goods:

supply curve for cigarettes leftward.

An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the:

Larger and larger amount of capital goods must be sacrificed to get additional units of consumer goods

Answer the question on the basis of the data given in the following production possibilities table: Refer to the table. For these data, the law of increasing opportunity costs is reflected in the fact that:

$417.

Answer the question on the basis of the following data. All figures are in billions of dollars. Refer to the data. GDP is:

$392.

Answer the question on the basis of the following data. All figures are in billions of dollars. Refer to the data. NDP is:

12.5 percent.

Answer the question on the basis of the following information about a hypothetical economy:

the economy had moved from a point inside its production possibilities curve to a point on or very near the curve.

Answer the question on the basis of the following information for a specific year in a hypothetical economy for which Okun's law is applicable: Refer to the given data. If the unemployment rate in the economy fell to 6 percent, we could conclude that:

South Cantina is fully and efficiently using its resources, but North Cantina is not.

Answer the question on the basis of the following production possibilities tables for two countries, North Cantina and South Cantina: Refer to the tables. Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods. We can conclude that:

$100.

Answer the question on the basis of the following table that illustrates the multiplier process. Refer to the given table. The total change in income resulting from the initial change in investment will be:

realize an economic profit of $10.

Answer the question using the following data, which show all available techniques for producing 20 units of a particular commodity: Refer to the data. Assuming that the firm is motivated by self-interest and that the 20 units that can be produced with each technique can be sold for $2 per unit, the firm will:

$1,200.

Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $700. Donita sells the dresses for $1,200 to kids attending the prom. The total contribution to GDP of this series of transactions is:

GDP will tend to increasingly understate the level of output through time.

Assume that the size of the underground economy increases both absolutely and relatively over time. As a result:

$6 billion.

Assume the MPC is 2/3. If investment spending increases by $2 billion, the level of GDP will increase by:

6 percent.

Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are employed, the unemployment rate is:

increase, quantity demanded to decrease, and quantity supplied to increase.

At the current price there is a shortage of a product. We would expect price to:

3.1 percent.

Between 1950 and 2012, U.S. real GDP grew at an average annual rate of about:

obtain a sum substantially larger than the GDP.

By summing the dollar value of all market transactions in the economy, we would:

Communism

Command systems are also known as:

there are independently-acting buyers and sellers in each market.

Competition means that:

either real GDP or real GDP per capita.

Economic growth is best defined as an increase in:

tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs.

Economic growth rates in follower countries:

are essential to the reallocation of resources from less desired to more desired goods.

Economic profits and losses:

pleasure or satisfaction

For economists, the word "utility" means:

increase equilibrium price and quantity.

Given a downsloping demand curve and an upsloping supply curve for a product, an increase in the price of a substitute good (from the buyer's perspective) will:

an increase in the real rate of interest will reduce the level of investment.

Given the expected rate of return on all possible investment opportunities in the economy:

money to flow counterclockwise from Michigan to Texas to Washington.

Given the information and assuming trade occurs between the three states, we can expect:

the horizontal sum of individual demand curves.

Graphically, the market demand curve is:

higher crime rates as the unemployed seek to replace lost income.

Higher rates of unemployment are linked with:

$510 billion.

If actual GDP is $500 billion and there is a negative GDP gap of $10 billion, potential GDP is:

A and B are complementary goods

If the demand curve for product B shifts to the right as the price of product A declines, then:

23 years.

If the growth trend of labor productivity is 3 percent per year, the number of years that it will take for the standard of living to double will be about:

12 percent.

If the nominal interest rate is 18 percent and the real interest rate is 6 percent, the inflation rate is:

5.8 years.

If the rate of inflation is 12 percent per year, the price level will double in about:

quantity must decline, but equilibrium price may rise, fall, or remain unchanged.

If the supply and demand curves for a product both decrease, then equilibrium:

more variable than real GDP.

In annual percentage terms, investment spending in the United States is:

make simplifying assumptions

In constructing models, economists:

The quantity of resources available to the economy.

In making international comparisons of living standards using GDP, which of the following is not adjusted for in the calculation?

build up inventories before reducing production.

In situations of sticky prices and negative demand shocks, we would expect firms to:

rising real GDP.

In the United States, business cycles have occurred against a backdrop of a long-run trend of:

increase D, increase P, and increase Q.

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.Refer to the given information. Consumer expectations that the price of X will rise sharply in the future will:

businesses are sellers of final products.

In the simple circular flow model:

price floor.

In this market, economists would call a government-set minimum price of $50 a:

Expansion.

In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

the total of all sources of private income plus government revenue from taxes on production and imports

National income measures:

exports less imports

Net exports are:

lower price increases the real incomes of buyers, enabling them to buy more.

One reason that the quantity demanded of a good increases when its price falls is that the:

The development of a low-cost electric automobile.

Other things equal, which of the following might shift the demand curve for gasoline to the left?

occurs, not because of growth, but because common resources are treated as free goods.

Proponents of economic growth say that pollution:

0F represents a price that would result in a shortage of AC.

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If supply is S1 and demand D0, then

shortage of 100 units

Refer to the diagram. A price of $20 in this market will result in a:

$1.60.

Refer to the diagram. A shortage of 160 units would be encountered if price was:

price A.

Refer to the diagram. Rent controls are best illustrated by:

increase in productivity.

Refer to the diagram. The most likely cause of a shift from AB to CD would be a(n):

A shift from D2 to D1 in Figure B.

Refer to the figures. Which of the following events would most likely result in higher unemployment?

.80.

Refer to the given data. The marginal propensity to consume is:

saving would be minus $20 billion at the zero level of income.

Refer to the given figure. If the relevant saving schedule were constructed:

recession.

Refer to the given graph. A movement from b to a along C1 might be caused by a(n):

decrease in demand.

Refer to the table. In relation to column (3), a change from column (5) to column (4) would indicate a(n):

$303 in year 3 in Zorn.

Refer to the table. Per capita GDP was about:

a shortage of 40 units would occur.

Refer to the table. Suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). If the price were artificially set at $6:

it is too soon to judge whether the high productivity advances between 1995 and 2012 are long lasting or transitory.

Skeptics of the 1995-2012 rise in the average rate of productivity growth say that:

decrease the demand for complementary good Y and increase the demand for substitute product Z.

Suppose an excise tax is imposed on product X. We expect this tax to:

increased by $60 billion.

Suppose nominal GDP was $360 billion in 1990 and $450 billion in 2000. The appropriate price index (1985 = 100) was 120 in 1990 and 125 in 2000. Between 1990 and 2000 real GDP:

the official unemployment rate will remain unchanged.

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. As a result:

other things equal

The Latin term "ceteris paribus" means:

in addition to saving, households use some of any increase in income to buy imported goods and to pay additional taxes.

The actual multiplier effect in the U.S. economy is less than the multiplier effect in the text examples because:

disposable income.

The amount of after-tax income received by households is measured by:

all production involves the use of scarce resources and thus the sacrifice of alternative goods.

The assertion that "there is no free lunch" means that:

product quality was neglected

The fact that the major indicator of enterprise success in the Soviet Union and pre-reform China was the quantity of output implied that:

employed workers and persons who are officially unemployed.

The labor force includes:

bowed out from the origin.

The law of increasing opportunity costs is reflected in a production possibilities curve that is:

producers will offer more of a product at high prices than at low prices.

The law of supply indicates that, other things equal:

1/MPS

The multiplier is:

dividing 70 by the annual growth rate.

The number of years required for real GDP to double can be found by:

risen from 41 percent in 1960 to 88 percent in 2012.

The percentage of U.S. adults with a high school education or has:

a decrease in money income.

The shift of the budget line from cd to ab in the figure is consistent with:

subtracted from exports when calculating GDP because imports do not constitute production in the United States.

The value of U.S. imports is:

reduces the real burden of the public debt to the federal government.

Unanticipated inflation:

1, 2, 5, and 6 only.

Use the list below to answer the following question:1. Improvements in technology.2. Increases in the supply (stock) of capital goods.3. Purchases of expanding output.4. Obtaining the optimal combination of goods, each at least-cost production.5. Increases in the quantity and quality of natural resources.6. Increases in the quantity and quality of human resources.Refer to the list. As distinct from the demand and efficiency factors of economic growth, the supply factors of economic growth are:

Prices are sticky in the short run.

What is the primary reason that changes in total spending lead to cyclical changes in output and employment?

resources are devoted to increasing future output.

When economists refer to "investment," they are describing a situation where:

The desires of resource suppliers and producers to further their own self-interest will automatically further the public interest.

Which of the following best describes the invisible-hand concept?

a piece of software used by a firm

Which of the following is a capital resource?

A dramatic increase in energy prices increases production costs for firms in the economy.

Which of the following is an example of a supply shock?

the purchase of baseball uniforms by a professional baseball team.

Which of the following is an intermediate good?

An empirical investigation of the general price level and unemployment rates since 1990.

Which of the following is associated with macroeconomics?

APC + APS = 1

Which of the following is correct?

Negative real growth in output.

Which of the following is most closely related to recessions?

principle

Which of the following terms implies the greatest degree of confidence in an economic generalization?

A reduction in the price of cattle feed.

Which of the following would not shift the demand curve for beef?

2.

f a $50 billion decrease in investment spending causes income to decline by $50 billion in the first round of the multiplier process and by $25 in the second round, the multiplier in the economy is: