q from all tests combined

Economic growth in a country leads to a(n):1. increase in life expectancy.2. increase in real GDP in the economy.3. improvement in income distribution.4. increase in average mortality rates.1 and 22 and 42 and 32 only1, 2, 3, and 4

1 and 2

If the consumer price index is 120 in year 1 and 150 in year 2, then the rate of inflation from year 1 to year 2 is:50%30%20%25%10%

25%

the table below shows output and price for three goods and two years. calculate nomial GDP in year 2

25800. price x quanity in year 2

the table shows output and price for three goods and two years. using the chain type method what is the growth rate of real GDP

26.5%. (23400-18500)/18500)x100

in the forth quarter of 2023, real GDP growth was closest to which of the following number.

3%

As of January 2024, what is the (U-3) unemployment rate? (As a percentage, but do not put in the % sign, and round to one decimal place.) Answer:

3.7

Consider the graph of the labor market shown below. At a wage rate of $15, the number of unemployed people in this market is:

4,000

The current natural rate of unemployment is closest to which of the following numbers?

4.5%

To determine the inflation rate that you and your fellow students face, you construct a basket of goods and services that you believe a typical student purchases in a yar. you record the prices of these items over two years: Assuming that 2022 is the base year, what is the percentage inflation rate in 2023?

6%

As an economist for Walmart, you're exploring current economic conditions to forecast how they may impact upcoming sales and hiring decisions. You've acquired the data in the table from government sources. Each category is given in thousands of persons. What is the labor force participation rate? Labor Market Statistics Frequency: AnnualTime: 2021Country: United StatesSubjectLevel, personsWorking age population, Aged 15 and over, Females134,958.0Working age population, Aged 15 and over, Males126,487.3Employed population, Aged 15 and over, All persons152,580.7Unemployed population, Aged 15 and over, All persons8,623.3

62%

in your first three years of managing sales at a tech startup, you see growth in sales of 7.5 percent each year. Your boss asks you how long, at this rate, it will take for your firm to double its sales volume. You respond:

70/7.5 = 9.3 years

Calculating GDP) According to the information in the table, what is GDP?Calculating GDP(in trillions)Rent $2,400Consumption spending 7,900Social Security benefit 6,100Investment spending 2,100Wages and salaries 6,500Exports 800Interest 1,900Government purchases of goods and services 2,600Profits 1,400Imports 1,200Purchase of stocks 6,300Unemployment compensation 3,950Payroll taxes 2,965Sales taxes 1,300

GDP = C + I + G + X - M = 7,900 + 2,100 + 2,600 + 800 - 1,200 = $12,200

Why might the increase in real GDP per capita between 2009 and 2011 not have resulted in a higher living standard for the typical Irish citizen?Year GDP Per Person (constant US dollars)2009 $48,054.072010 $48,711.952011 $50,304.68Other countries may have had greater GDP growth.Other countries may have had even bigger GDP gains.Inflation may have wiped out the GDP gains.GDP does not take income distribution into account.The population may have grown faster than GDP.

GDP does not take income distribution into account.

if the shadow economt were counted in US GDP , which of the following is true

GDP would increase by a small amount

Technological advancement can be shown in which graph?

Graph with arrow pointing away from blue line, toward purple line

During the worst part of COVID (Q2 of 2020), real GDP growth was about -30%. In the next quarter (Q3 of 2020), real GDP growth was about +30%.Which of the following statements is correct?

High Q3 growth would not have been sufficient to make up for the fall in Q2, so real GDP at the end of Q3 was less than at the beginning of Q2.

As a member of the Council of Economic Advisors, which policy would you recommend as an option to reduce frictional unemployment?

Implement an interview coaching program for low-income, unemployed people.

If the Japanese electronics company Sanyo sells 3,000 televisions to the American hotel chain Wyndham, that contributes to _____ GDP as _____. If the U.S. law firm Baker McKenzie LLP litigates a copyright infringement case in Japan on behalf of a Japanese client, that contributes to _____ GDP as _____.

Japanese; an export; U.S.; an export

You have four friends. Who can be described as "cyclically unemployed"?

Keeley, who lost her job after her company lost a lot of customers during an economic downturn.

The Fed's preferred measure of inflation is the _________.The Fed is primarily interested in growth in ______ inflation.​CPI; headlineCPI; corePCE deflator; corePCE deflator; headline

PCE deflator; core

How does money illusion cause nominal wage rigidity?

Since workers focus on nominal earnings and thus resent wage cuts, employers choose to hold nominal wages constant rather than lower them if prices fall

You have four different friends! Which of the following friends is structurally unemployed?

Stephanie used to work at a typewriter factory, but people don't need typewriters anymore.

The government passes a new investment tax credit initiative, which gives tax credits for business spending on factories and machines.Which input in the production function changes, and what is the effect on economic growth in the country?The capital stock decreases, and economic growth will not change.Human capital is increased, and economic growth increases.Technological advance occurs, but there is no effect on economic growth.The capital stock increases, and economic growth increases.

The capital stock increases, and economic growth increases.

In 2007, a U.S. Forever Stamp cost $0.41. In 2019, a U.S. Forever Stamp cost $0.55. In January 2007, the consumer price index was 207.34. In January 2019, the consumer price index was 251.1.What happened to the real cost of mailing a letter over this period?The real cost of mailing a letter has increased.The real cost of mailing a letter has stayed the same.The real cost of mailing a letter has decreased.There is not enough information to tell what has happened to the real cost of mailing a letter.

The real cost of mailing a letter has decreased ;

If you consider unemployment rates by race and ethnicity, which of the following is true?

There are significant disparities between unemployment rates.

If you wanted to know how much "slack" there is in the labor market, which of the following would be the best measure to look at?

U-6 rate

Disinflation is:a decrease in the rate of growth of the economy.a decrease in the overall price level.a rate of growth of the price level that is negative.a decrease in the rate of growth of the price level.

a decrease in the rate of growth of the price level.

A production function is:a method through which inputs can be turned into outputs, given technology.the sum of total production possibilities, if resources were unlimited.the amount of money generated from selling outputs, after input costs are considered.a method by which outputs can be recycled to produce inputs.

a method through which inputs can be turned into outputs, given technology.

levi-strauss buys denim to make jeans. how is this counted in GDP

not counted

you buy a lawnmower from your neighbor. how is thus counted in GDP

not counted

"Can you believe it?" your grandfather exclaims. "A 2022 Dodge Challenger costs $30,000. I remember buying my new 1970 Dodge Challenger for $3,000. But of course, everything was cheaper back then! Those were the days!"You wonder if he's right. You note that that the CPI in 1970 was 39, whereas in 2022, it's 294. You conclude that your grandfather is:

not necessarily right or wrong, since on the one hand, the 2022 Dodge Challenger is more expensive, in real terms, than the 1970 Dodge Challenger, but on the other hand, quality improvements likely render the new Dodge Challenger superior to the 1970 version.

The moral of the story of the Solow growth model is that:capital accumulation is the key to sustained economic growth.capital accumulation alone cannot lead to sustainable economic growth.technological advance cannot sustain continuous economic growth.human capital growth does not lead to economic growth.

capital accumulation alone cannot lead to sustainable economic growth.

You would like to work remotely but live in a rural area, so you are happy to read that the government plans to upgrade broadband services in underserved areas. Increasing broadband availability in this way is a form of:an increase in the labor force.technological progress.expansion of natural resources.capital accumulation.

capital accumulation.

You and your partner make artisan picture frames to sell at fairs and festivals. Business is going well, and you each produce 40 frames per month, for a total of 80 frames.You decide to hire two more workers and buy double the materials, whereupon your frame output climbs to 160.This suggests the artisan frame factory exhibits:constant returns to scale.diseconomies of scale.increasing opportunity costs.diminishing marginal returns.

constant returns to scale.

Property rights refer to:patents owned by a business.the number of properties owned by an entrepreneur.control over a tangible or intangible resource.the time it takes to start a business venture.

control over a tangible or intangible resource.

Which is NOT a reason that female labor force participation has increased dramatically in the United States?

decreased male labor force participation.

You plan to study abroad in the Caribbean on a French-speaking island. You would like to have a fairly comfortable lifestyle, so you are looking for an island that has high GDP per person.You find in your research that:St. Martin has a population of 39,239 and a GDP in U.S. dollars of $772,921,756.Dominica has a population of 72,172 and a GDP of $545,618,519.Guadeloupe has a population of 375,857 and a GDP of $9,740,000,000.Based on your preferences regarding the standard of living, which island would you most likely avoid?Based on your preferences regarding the standard of living, which island would you most likely avoid?St. MartinDominicaGuadalupeThey are all the same. Go for the best beaches!

dominica

If you want to know what the economy is doing this year, you should use:real potential GDP.nominal GDP.per capita GDP.real GDP.

real GDP

To measure economic growth, you should usereal potential GDP.per capita GDP.nominal GDP.real GDP.

real potential GDP

The U.S. Department of Education sponsors the i3 program (Investing in Innovation), which provides grants to educational institutions and schools that have a proven track record of high student achievement.This is an example of a government program designed to build:physical capital.technological progress.human capital.labor resources.

human capital

You enjoyed a coding class you took as an elective, but you don't have time to take more classes in that area. You plan, however, to take more coding classes at the community college after graduation, thereby increasing your:physical capital.human capital.steady state.basic literacy

human capital

You opened a catering business in 2017. As social gatherings resumed after the Covid pandemic waned, you found yourself constantly short staffed. The steps you used to attract workers prior to 2020 do not attract applicants now. Almost a year passes before you finally reach your full staffing goal. You experienced the effect of:

hysteresis

the cicular flow shows that in the economy

income and spending must be the same

the most volatile category of GDP is

investment

you buy a house that was built this year. how is this counted in GDP

investment

The capital stock in an economy stops growing when:investment equals depreciation.investment equals savings.depreciation reaches zero.capital accumulation begins

investment equals depreciation

The performance of the economy during a presidential administration:is completely unrelated to what a president does.is usually not closely related to what a president does.is usually directly related to what a president does.is entirely determined by what a president does.

is usually not closely related to what a president does.

why do economists think that the current growth rate of real GDP is unsustainable

it is above the long run growth rate GDP

the US has a higher per capita income, but the average work week is about 42 hours. france has a lower per capita income, but the average work week is about 35 hours. Which of the following is true

it is not possible to determine which is better off, because we do not know the value placed on leisure.

Unemployment insurance can lead to

longer spells of unemployment

The U.S. inflation rate has been _____ in the 2000s than it was in the 1970s.about the samethree times as highlowertwice as high

lower

Laws that make it difficult to fire workers:

make employers reluctant to hire workers, increasing unemployment.

Amara works in a discount store in a country that is suffering from hyperinflation. Twice each day, the store's pricing manager enters the store with a new list of prices that Amara and her colleagues must tag to the store's products. "I spend more time changing prices on the labels these days than serving customers," Amara says. The discount store is incurring _____ costs.coreshoe leathermenuredistribution

menu

the US sells fighter plans to saudi arabia. how is this counted in GDP

net exports

Years ago, instead of using a music streaming service like Spotify you would have to go into a store, browse the selection, and buy an album without being able to listen to all the tracks before you purchased the album.What challenge to measuring the true cost of living does the advent of streaming services like Spotify represent?substitution biasquality improvementsnew productsoutlet bias

new products

Suppose the price of raisins rises by $50 per pound.If the demand for raisins is perfectly inelastic, the cost of food in general would _____ as a result.If the demand for raisins is perfectly elastic, the cost of food in general would _____ as a result of the rise in the price of raisins.Thus, using a fixed basket of goods and services to measure inflation leads to substitution bias, causing inflation estimates to _____ changes in the cost of living.remain unchanged; fall; understateremain unchanged; rise; overstaterise; remain unchanged; overstaterise; remain unchanged; understate

rise; remain unchanged; overstate

In Canada, the Ontario government provides a tax credit to firms that spend on scientific research and experimental development.This tax credit will:increase the marginal cost of producing each unit of output.shift these firms' production functions upward through innovation and creative ideas.shift these firms' production functions downward by the amount of the tax credit.reduce the amount of money firms spend on research and development.

shift these firms' production functions upward through innovation and creative ideas.

The current labor force participation rate is:

slightly lower than it was before the pandemic.

You are still a member of the Council of Economic Advisors, advising the current administration on the trade-offs of federal unemployment policies. If the government mandates raising the minimum wage, who will likely be the most impacted?

teenagers and young workers

Money illusion is the:

tendency to focus on nominal values rather than inflation-adjusted values.

One way to know that the labor market is tight right now is that:

the U-3 rate is less than the natural rate of unemployment.

Payroll employment, from the Establishment Survey, tells us:

the change in employment, or net number of jobs created.

Unemployment that is very low can be bad because

very low unemployment leads to rising wages, which can fuel inflation

Chapter 10

Chapter 10

Chapter 11

Chapter 11

Chapter 12

Chapter 12

Chapter 9

Chapter 9

the largest component of real GDP is:

Consumption

the table shows output and price for three goods and two years. calculate real gdp in year two using chain type method

23,400

In 1971, when the consumer price index was 40, women earned a median income of $2,408 per year.If the consumer price index in 2012 was 223, how much was $2,408 in 2012 dollars?(Round to the nearest whole number.)$558$13,425$370$2,408$96,320

$13,425 ; To get 2012 dollars, (2408)(223/40) = $13,425. (Rounded.)

Measurements of GDP obtained through the expenditure approach, the output approach, and the income approach are subject to small discrepancies, since each relies on a different data source. Consider the data in the table for the United States in 2014. Under the expenditure approach, GDP is _____ trillion; under the income approach, it is _____ trillion.

$17.4; $17.5

Janine produces and sells bath towels. The cotton that goes into the average bath towel Janine produces is sold for $5 by a cotton farmer to a textile manufacturer. The textile manufacturer weaves the raw material into yarn, then sells the cloth to a dyer for $15. When the dyeing is complete, Janine purchases the material for $20, and in fabricating the material into a finished bath towel and selling it, Janine adds another $20 to its value. The sum of the value added over all stages of production is _____.The price of a finished bath towel is _____. (Assume the towel is sold at value.)Assuming this process occurs in one year and in one country, the production of one bath towel adds _____ to GDP.

$40; $40; $40

Which is an economic cost of unemployment? (i) Unemployed people often accept lower wages when they eventually find work. (ii) Growth is lower. (iii) The unemployment rate falls. (iv) Children whose parents are unemployed have lower academic outcomes.

(i) and (ii)

Henry Ford's $5 per day wage led to: (i) an increase in the number of workers willing to work at the Ford plant. (ii) workers who were more dedicated to their work. (iii) unemployment. (iv) an increase in total labor costs.

(i), (ii), and (iii)

In order to be considered unemployed, the person must be: (i) over the age of 16. (ii) actively searching for work. (iii) available to work. (iv) skilled.

(i), (ii), and (iii)

Refer to the given table, which shows data for Ireland. Based on only the data in this table, in which year(s) did Ireland experience a fall in the standard of living?

2008 and 2009

the table shows output and price for three goods and two years. calculate real GDP in year two using the alternative method discussed in the lecture

21000 year 2 quantity x year 1 prices

Refer to the given table, which shows the data for Ireland. What was the economic growth rate in Ireland in 2010?

1.37%

To determine the inflation rate that you and your fellow students face, you construct a basket of goods and services that you believe a typical student purchases in a yar. you record the prices of these items over two years: Assuming that 2022 is the base year, what is the level of the student CPI in 2023? Round your answer to the nearest whole number

105.63 or 106

if you know that nomial GDP has grown by 15% and real GDP has grown by 11% what it the approximate growth rate of prices

15-11=4%

the table below shows output and price for three goods and two years calculate the nomial GDP in year 1

18500. price x quantity year 1

You were hired into your current job at $30 an hour in 2017, when the CPI was 247.It is now 2022, and the CPI is 296.Assuming that your nominal wage hasn't changed, by what percentage, in real terms, has your wage declined?19.8%3.7%16.6%27.9%5.1%

19.8%

The Fed's target for inflation is:

2%

Your friend works part-time as a customer service representative while searching for a full-time position. They tell you that they should be counted as unemployed because they don't work many hours. "The unemployment rate would be higher if economists counted people who can't find the work they want." Which statement about your friend's employment status is TRUE?

Broader measures of the unemployment rate account for underemployed people.

A firm that prepares and mails customer notices on behalf of banks has recently shifted from manually addressing letters to using a computer program that automatically inserts customer addresses and prepares letters. Thus, the production time for each letter has decreased from four minutes to just 30 seconds.This scenario is an example of:an improvement in technology leading to a rise in productivity.a labor-intensive production method.the effects of an investment tax credit.a rise in productivity causing an improvement in technology.

an improvement in technology leading to a rise in productivity.

Which event would lead to a slowdown in economic growth?an increase in the dependency ratio.improved efficiency in production.an increase in human capital.an increase in capital accumulation in the economy.

an increase in the dependency ratio.

Which change will NOT increase the productivity of labor?an increase in the size of the labor forceimproved educationmore spending on infrastructure.an increase in the capital stock

an increase in the size of the labor force

What would be the best way to scale the value of the government debt, to make it easier to grasp?

as a share of GDP

A rise in a country's population:boosts real GDP but not necessarily real GDP per person.leads to an increase in the level of technology in an economy.always raises the standard of living in a country.leads to a downward shift of the aggregate production function.

boosts real GDP but not necessarily real GDP per person

the village of geneseo repairs a road

governement spending

Unemployment that is very high can be bad because:

high unemployment leads to extensive social and economic costs.

Economists believe that the BEST way to stimulate investment in physical capital is to encourage:higher rates of investment in human capital.the conservation of natural resources.more spending on infrastructure.higher rates of national saving.

higher rates of national saving.

Shoe-leather costs of inflation are the costs:of rising footwear prices.of lost interest on savings accounts.of actions taken to avoid the impact of inflation.of adjusting prices.

of actions taken to avoid the impact of inflation.

At equilibrium in the labor market, there is:

only structural and frictional unemployment.

The CPI changes from 100 to 125. This means that:consumers can now purchase 25% more goods and services.all prices in the economy have risen by 25%.the base year index has changed from 100 to 125.overall prices are now 25% higher than they used to be.

overall prices are now 25% higher than they used to be.

A country's standard of living is BEST measured by:

per capita real GDP.

The figure shows three different production functions. The law of diminishing returns can be seen in which movements in the figure?

point C to point D

Your housemate claims that high levels of economic growth can be endless, because we can always produce more capital, leading to more output. You point out that this:is correct because the key to sustained economic growth is capital accumulation.won't work because new investment will outpace depreciation.won't work because of diminishing marginal returns and depreciation.is correct, but the increased investment means there will be an offsetting decrease in consumption.

won't work because of diminishing marginal returns and depreciation

Last week you were laid off from your job. Since you can cover your bills with unemployment insurance, you're tempted to not look very hard for a job. However, you know you should start looking for a job as soon as possible because:

your skills and professional contacts become less current the longer you wait.

You open a savings account that pays 0.75% interest a year. What is your real rate of return if the inflation rate is 1%?1%1.75%−0.75%1.5%−0.25%

−0.25% ; To find the real rate, take the nominal rate minus inflation.0.75 - 0.1 = -0.25, or -0.25%