Macro test 2

How many adults were not in Baltivia's labor force in 2009?

7,400

Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as "unemployed"?

anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid off

Owners of municipal bonds

are not required to pay federal income tax on the interest income.

If the Apple corporation sells a bond it is

borrowing directly from the public.

Assume the bonds below have the same term and principal and that the state or local government that issues the municipal bond has a good credit rating. Which list has bonds correctly ordered from the one that pays the highest interest rate to the one that pays the lowest interest rate?

corporate bond, U.S. government bond, municipal bond

The designation "natural" implies that the natural rate of unemployment

does not go away on its own even in the long run.

If a firm sells a total of 100 shares of stock, then

each share represents ownership of 1 percent of the firm.

In determining living standards, productivity plays a key role

for both nations and individuals.

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

productivity

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

productivity is greater than Will's. output is greater than Will's. standard of living is higher than Will's. All of the above are correct.

Which of the following is not one of the categories into which the Bureau of Labor Statistics places each adult of each surveyed household?

underemployed

The labor-force participation rate is computed as

(Labor Force ÷ Adult Population) × 100.

In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity?

100 pounds of laundry per hour

How many people were employed in Baltivia in 2009?

11,000

How many people were unemployed in Baltivia in 2009?

1600

Suppose that the adult population in the country of Atlantis is 115 million. If 80 million people are employed and 5 million are unemployed, then

30 million are not in the labor force.

Which of the following is a financial-market transaction?

A saver buys a bond a corporation has just issued so it can purchase capital.

ABC Co. sells newly issued bonds. JLG Co. sells newly issued stocks. Which company is raising funds in financial markets?

Both ABC and JLG

Measuring unemployment is the job of the

Bureau of Labor Statistics.

atiana is waiting to be recalled to a job from which she was laid off. Ivan was fired but has not looked for work during the last two months. Who does the Bureau of Labor Statistics count as "unemployed"?

Tatiana but not Ivan

Which of the following is correct?

The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress.

Other things the same, which bond would you expect to pay the highest interest rate?

a bond issued by a new chain of Brazilian-style restaurants

On which of these bonds is the prospect of default least likely?

a bond issued by the federal government

On which of these bonds is the prospect of default most likely?

a junk bond

The level of real GDP person

and the growth rate of real GDP per person vary widely across countries.

Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job. She is going to tour around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate

and the labor-force participation rate are both unaffected.

.Esmerelda worked parttime for her mother's business without pay. Tabitha was absent from work because she had strep throat. Who is counted as "employed" by the Bureau of Labor Statistics?

both Esmerelda and Tabitha

Which of the following can explain faster growth of real GDP in country A than in Country B?

both greater population growth and greater productivity growth in Country A

Suppose there are a large number of men who used to work or seek work who now no longer do either. Other things the same, this makes

both the number of people unemployed and the labor force fall.

People who buy stock in a corporation such as General Electric become

creditors of General Electric, so the benefits of holding the stock depend on General Electric's profits.

The unemployment rate is computed as the number of unemployed

divided by the labor force, all times 100.

People who buy newly issued stock in a corporation such as Crate and Barrel provide

equity finance and so become part owners of Crate and Barrel.

Northwest Wholesale Foods sells common stock. The company is using

equity financing and the return shareholders earn depends on how profitable the company is.

For a given year, productivity in a particular country is most closely matched with that country's

growth rate of real GDP divided by hours worked over that year.

Cyclical unemployment

has a different explanation than does the natural rate of unemployment. refers to the yeartoyear fluctuation in unemployment around an economy's natural rate of unemployment. is closely associated with short-run ups and downs of economic activity. All of the above are correct.

You hold bonds issued by the city of Sacramento, California. The interest you earn each year on these bonds

is not subject to federal income tax and so these bonds pay a lower interest rate than otherwise comparable bonds issued by the U.S. government.

Which of the following would, by itself, reveal the most about a country's standard of living?

its productivity

Municipal bonds pay a relatively

low rate of interest because of their high default risk and because the interest they pay is subject to federal income tax.

Suppose Sarah Lee Corporation stock has a P/E ratio of 8. This P/E ratio is relatively

low, indicating that buyers may expect earnings to fall.

A corporation's earnings are the amount of revenue it receives for the sale of its products

minus its cost of production as measured by its accountants. Earnings may be paid out as dividends or retained by the corporation.

Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as

neither in the labor force nor unemployed.

Who in the adult population is counted as "employed" in U.S. labor statistics?

people who work without pay in a family member's business but not people who are temporarily absent from their job

If the government's expenditures exceeded its receipts, it would likely

sell bonds directly to the public

Data on the unemployment rate in the U.S. since 1960 show that the unemployment rate is

sometimes zero

The length of time until a bond matures is called the

term

Suppose the issuer of a bond fails to pay some of the interest or principal that was promised to the bondholders. This failure is referred to as a

term failure

The key determinant of the standard of living in a country is

the amount of goods and services produced from each hour of a worker's time.

The economy's two most important financial markets are

the bond market and the stock market.

Who of the following is not included in the Bureau of Labor Statistics' "employed" category?

those waiting to be recalled to a job from which they had been laid off

Unemployment data are collected

through a regular survey of about 60,000 households

The Bureau of Labor Statistics places people in the "employed" category if they

work without pay in a family member's business.

Institutions that help to match one person's saving with another person's investment are collectively called the

financial system

Compared to short-term bonds, other things the same, long-term bonds generally have

more risk and so they pay higher interest rates.

How many people were in Baltivia's labor force in 2009?

12,600

The Bureau of Labor Statistics counts a member of a surveyed household as an adult if that person is at least

16 years old

.Octavia does not currently have a job, but she has applied for several jobs in the previous week. Eve is an unpaid stay-at-home mom who has not searched for work in recent years. Who does the Bureau of Labor Statistics count as "out of the labor force"?

Eve but not Octavia

Productivity is defined as the quantity of

goods and services produced from each unit of labor input.

In the long run the unemployment rate equals

natural rate of unemployment

The amount of unemployment that an economy normally experiences is called the

natural rate of unemployment

You are thinking of buying a bond from Bluestone Corporation. You know that this bond is long term and you know that Bluestone's business ventures are risky and uncertain. You then consider another bond with a shorter term to maturity issued by a company with good prospects and an established reputation. Which of the following is correct?

Both the longer term and the higher risk would tend to make the interest rate higher on the bond issued by Bluestone.

The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of households called the

Current Population Survey.

Which of the following pairs of terms refer to the same thing?

"capital" and "physical capital"