macro test 2

Which of the following is not a cause of frictional unemployment?

minimum-wage laws

Angelica is an unpaid homeworker who works as a volunteer at the local Red Cross and is currently not looking for a paid job. The Bureau of Labor Statistics counts Angelica as

neither in the labor force nor unemployed

The primary economic function of the financial system is to

match one person's saving with another person's investment

Suppose the economy is closed with national saving of $2 trillion, consumption of $8 trillion, and government purchases of $1 trillion. What is GDP?

$11 trillion

A worker received $5 for a daily wage in 1930. What is the value of that wage today if the CPI was 17 in 1930 an is 215 today?

$63.24

Suppose that in a close economy GDP is equal to 11,000, taxes are equal to 2,500, consumption equals 7,ooo and government purchases equal 3,000. What are private saving and public saving?

1,500 and -500 respectively

suppose a basket of goods and services has been selected to calculate the CPI and 2002 has been chosen as the base year. In 2002, the basket's cost was $75; in 2004 $79.50; and in 2006 $85.86. The value of the CPI was

100 in 2002, 106 in 2004, and 114.48 in 2006

In June 2009 the BLS reported an adult population of 234.9 million, unemployment of 12.4 million, and employment of 141.6 million. Based on these numbers the labor - force participation rate was

154/234.9

The consumer price index was 225 in 2006 and 234 in 2007. The nominal interest rate during this period was 6.5 percent. What was the real interest rate during this period?

2.5 percent

Which of the following statements is true?

Americans have a higher standard of living than Indonesians because American workers are more productive than Indonesian workers

Which of the following is correct?

Historically, in periods where the rate of population growth was high, so was the rate of growth in world real GDP per person

Which of the following statements is NOT correct

Malthus argued that charity and government aid was an effective way to reduce poverty

Which of the following is correct?

Unemployment rate = number of unemployed / (number of employed + number of unemployed) x 100

Which of the following is NOT correct?

Unions play a much larger role in the US labor market now than they did in the past

In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburger. A hot dog costs $3 in 2006 and $5.40 in 2007. A hamburger costs $5 in 2006 and $6 in 2007. Which of the following statements is correct?

When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007

Workland has a population of 10,000 of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000 of whom 4,000 work 12 hours a day to produce a total of 120,000 final goods.

Workland has higher productivity but lower real GDP per person than Laborland

Which of the following expressions must be equal to national saving for a closed economy?

Y - C - G

Wages in excess of their equilibrium level help explain

both structural unemployment and the natural rate of unemployment

The traditional view of the production process is that capital is subject to

diminishing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries

To be counted as employed in the US labor force statistics a person

does not have to be working for pay if they are working for a family business and does not have to be working full time

If your firm's production function has constant returns to scale, then if you double all your inputs, your firm's output will

double but productivity will not change

An increase in minimum wage

increases structural unemployment

Country A and country B are the same except country A currently has a lower level of capital. Assuming diminishing returns, if both countries increase their capital by 100 units and other factors that determine output are unchanged, then

output in country A increases by more than in country B

the economy's inflation rate is the

percentage change in the price level from the previous period

Which of the following items plays a role in determining productivity?

physical capital, natural resources, and technological knowledge

In a closed economy, what does ( Y - T - C ) represent?

private saving

A firm may pay efficiency wages in an attempt to

reduce incentives to shirk, reduce turnover, and attract a well - qualified pool of applicants

Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to

reduce productivity. Other things the same, this decrease will be larger in a poor country

which of the following is correct?

the CPI is better than the GDP deflator at reflecting the goods and services bought by consumers

The economy's two most important financial markets are

the bond market and the stock market

Economists use the term inflation to describe a situation in which

the economy's overall output of goods and services is rising fast than the economy's overall price level

Other things the same, if a country raises its saving rate, then in the long run

the level of real GDP is higher but the growth rate of real GDP is unchanged

the consumer price index is used to

turn dollar figures into meaningful measures of purchasing power