Macro hw 3-4
An advantage of the establishment survey over the household survey of the labor market is that the establishment survey
is based on actual payrolls, rather than on unverified answers.
A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat. This lumberjack would be
structurally unemployed.
An example of an intermediate good would be
the rims on a new car
According to the text, economists consider full employment to occur when
the unemployment rate consists of only frictional and structural unemployment.
Which of the following is likely to increase measured GDP?
Marijuana becomes legal to grow and sell.
The GDP deflator is the
The ratio of nominal GDP to real GDP multiplied by 100
Which of the following goods is directly counted in GDP?
a 12-inch Subway sandwich purchased by a student
Which of the following is considered a durable good?
a washing machine
Investment, as defined by economists, would include the purchase of a
computer by an accounting firm.
What is the largest component of spending in the United States?
consumption spending
In the second half of 2019, automobile sales in the United States were lower than they were in the second half of 2018. The decrease in auto sales impacts GDP because new automobiles are counted as ________ when purchased by households and ________ when purchased by businesses.
consumption; investment
Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness?
counting people as employed who are working part time, although they would prefer to be working full time
Most of the unemployment that occurred during the Great Depression was
cyclical unemployment
In the circular flow model, the value of total income for an economy ________ the value of total production.
equals
Efficiency wages cause unemployment because
firms pay wages that are above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied
Jack just told his boss that he thinks his boss is an idiot. It is likely that Jack will be experiencing ________ unemployment in the near future.
frictional
The advice to "keep searching, there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment?
frictional unemployment
Which of the following is not an example of a transfer payment? -social security payments to disabled persons -unemployment insurance payments -health insurance payments to an army private -social security payments to retirees
health insurance payments to an army private
Gross domestic product understates the total production of final goods and services because of the omission of
household production.
Nominal GDP will increase
if either the price level or the quantity of goods and services produced rises.
A sharp increase in the number of medical errors increases the number of lawyers hired to determine medical malpractice settlements. This will
increase GDP and decrease well-being in the economy.
Suppose that homemakers are included as employed in the labor force statistics, rather than being counted as out of the labor force. This would
increase the measured labor force participation rate.
An increase in unemployment insurance payments would, in effect, ________ the amount of time spent searching for a job, which would increase ________ unemployment.
increase; frictional
The size of the underground economy would tend to increase if the government of a country
increased income tax rates.
The purchase of a new house is included in
investment expenditures.
Which of the following explains why many European countries have unemployment rates that are higher than in the United States?
European countries offer higher unemployment benefits than the United States.
GDP is not a perfect measure of well-being because
GDP is not adjusted for pollution
The purchase by a household in China of an automobile produced in the United States is included in U.S.
net exports.
Consumption expenditures do not include household purchases of
new houses
Discouraged workers are classified by the BLS as
not in the labor force
The Bureau of Labor Statistics would categorize a retiree who is not working as
out of the labor force.
To examine how the total production of an economy has changed over time, it would be better to examine
real GDP.
Suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed become employed. The labor force participation rate will
remain constant.
By offering training to workers whose firms laid them off because of competition from foreign firms, the federal government is attempting to reduce
structural unemployment.
The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect
that stock prices are more likely to fall.
Since the end of World War II, each president running for reelection when the economy was growing has won, and each president running for reelection when the economy was contracting has lost. These presidents were experiencing the political effects of
the business cycle
Suppose in 2020, you purchase a house built in 2014. Which of the following would be included in the gross domestic product for 2020?
the value of the services of the real estate agent
If the minimum wage is set above the market wage
unemployment will rise
In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA
values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.