unit 2 exam
Consumption Spending (C) for this nation is equal to:
1900
what was the estimated size of America's Total Population in January 2021?
330,125,000
Which of the following items would be considered a durable good?
Refrigerator
According to the circular flow diagram from page 107 of the Required Course Textbook, the dollar value of output will always equal the dollar value of:
Income
The Foreign Trade Effect suggests that an increase in the US price level relative to other countries will:
Increase US imports and decrease US exports.
If the US price level increases causing individuals to demand more dollars for loan-financed sales, this is an example of:
Interest rate
Which of the following statements IS NOT TRUE about the Consumption Function?
It indicates that consumption is inversely related to disposable income
Which letter represents the contractionary phase of the business cycle?
K
Demand creates its own supply.
Keynesian
What does the line segment XY represent?
The economy's long-run growth trend.
Consider this economic activity: On September 9th, 2020, Avery bought a townhome located on Summer Meadow Place here in Tallahassee. This townhome was built in June 2020.
This economic activity WILL BE COUNTED in GDP for year 2020.
Suppose the natural rate of unemployment for Germany is 7%, and the current unemployment rate in Germany is 9%. Based on Okun's Law how much output is Germany's economy sacrificing?
Under these conditions, Germany will sacrifice 4% of its national output.
The term Cyclical Unemployment is defined as:
Unemployment attributable to a lack of job vacancies due to inadequate level of aggregate demand.
A guitar is produced in California using $100 in raw materials and sells for $300 in a guitar shop. Each guitar that is produced contributes _____ to America's GDP.
300
Government Spending (G) for this nation is equal to:
3000
what was the value of America's unemployment rate in January 2021?
6.30
The ___ is the change in consumption spending associated with a change in disposable income.
The marginal propensity to consume
According to Supplemental Handout #2, the price of one country's currency in terms of another country's currency is known as the:
Exchange rate
Are intermediate goods included in OR excluded when we calculate the GDP statistic using the Expenditure Approach?
Excluded
Are non-market activities included in OR excluded when we calculate the GDP statistic using the Expenditure Approach?
Excluded
Which of the following are considered to be possible side effects of increased unemployment?
Fatal heart attack, increase crime and stress levels
External shocks to the economy include all of the following EXCEPT:
Population growth
Which of the following items is NOT included in Gross Private Investment?
Purchase of common stock
When the economy operates at a level of employment that is below full employment:
The economy operates at a point located inside its Production Possibilities Curve.
According to Economists, Frictional Unemployment could result from each of the following except:
The inability of people to find work during certain seasons of the year.
The dominant economic theory since the 1930s.
This statement would most likely be made by a Keynesian Economist.
The value of Spain's Real GDP for year 2005, expressed in terms of base year prices is:
$1,100 billion * (100.00 / 95.00) = $1,158 billion
Net Exports for this nation is equal to:
-100
3 types of consumption spending
10% durable goods, 30% nondurable goods, 60% services
The Unemployment Rate for year 2009 was:
10.0%
During year 2019, how much did Adam save each month?
1000
which gender group had the highest unemployment rate in January 2021?
Adult Females and Adult Males had the same unemployment rate
During a period of expansion, we should expect to observe:
An increase in the level of output produced by the nation's businesses. An increase in the level of employment. An increase in the average price level.
which education group had the lowest unemployment rate in January 2021?
Bachelors
Most of the recessions over the past half century have lasted:
Between 6 and 18 months
which racial group had the highest unemployment rate in January 2021?
Black
When the US economy achieves Full Employment, which type(s) of unemployment still exist?
Both Structural and Frictional Unemployment still exist when the US economy achieves Full Employment.
A recession is always followed by a depression.
F
Keynes was concerned that when the economy was in macro equilibrium, it could experience:
Neither full employment nor price stability.
For calendar year 2019, which component is the smallest part of GDP?
Net exports
which education group had the highest unemployment rate in January 2021?
No high school diploma
Which letter represents the peak of the business cycle?
O
Vanessa lost her job as a customer service representative (CSR) for Citibank in September 2019. Vanessa's supervisor said that all telephone and online CSRs in the area were being let go, since Citibank decided to relocate this division of its business to India. Vanessa has been searching for a new job in customer service for more than a year now, but she's discovered that many other American companies have outsourced their telephone and online customer services to foreign countries, too! Which type of unemployment best reflects Vanessa's situation?
Structural Unemployment
In Economics, the term unemployment means:
The inability of labor force participants to find jobs
The Full-Employment GDP is the GDP level at which:
The lowest possible rate of unemployment occurs with price stability.
The ___ is the change in saving associated with a change in disposable income.
The marginal propensity to save
In terms of the "musical chairs" analogy in the text, which of the following is the best description of Frictional Unemployment?
There are enough chairs of the right size, but it takes a brief period of time to find one.
In terms of the "musical chairs" analogy in the text, which of the following is the best description of Structural Unemployment?
There are enough chairs, but some are too small to sit in.
Suppose the US dollar depreciates (loses value) against foreign currencies. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Demand (AD curve)
which racial group has the lowest unemployment rate in January 2021?
White
national income accounting
tracks all revenues and expeditures of the federal gov
GDP is geographically focused statistic all output produced
true
Gross Private Investment (I) for this nation is equal to:
1030
According to the Required Course Textbook, the underground economy in America is estimated to be approximately:
12
The value of Spain's Real GDP for year 2010, expressed in terms of base year prices is:
1500 billion * (100.00 / 100.00) = $1,500 billion
how many people in America were classified as employed in January 2021?
150031000
The Unemployment Rate for year 2015 was:
2.50%
According to the Required Course Textbook, a recession is defined as:
A decrease in Real GDP for two or more consecutive quarters.
During a period of contraction, we should expect to observe:
A decrease in the level of output produced by the nation's businesses.
Within the context of the AD-AS Model, cost-push inflation is illustrated as:
A leftward shift of the Short Run Aggregate Supply curve
According to the Required Course Textbook, a growth recession is defined as:
A period during which Real GDP grows, but at a rate below the long-run trend
Based on the data in the table, which of the following equations represent the Consumption Function?
C = $150 billion + 0.75YD
Aggregate Demand reflects the spending of which group(s) of market participants?
Consumers for durable goods, residential housing, non-durable goods and services Business owners for new factories, equipment, and other forms of investment Governments for goods, services and public capital projects
Which component of Aggregate Demand is the largest in America?
Consumption
For calendar year 2019, which component is the largest part of GDP?
Consumption spending
Which of the following DOES NOT explain the shape of the Aggregate Demand curve?
Cost effect
Collin worked as a part-time history instructor at FSU for ten years. In April 2009, the Chairman of the History Department informed Collin that his labor services were no longer needed at FSU. You see, the Great Recession led to a massive reduction in funding for FSU and other state universities across the nation. For budgetary reasons, all non-essential faculty had to be terminated. Which type of unemployment best reflects Collin's situation?
Cyclical Unemployment
Which of the following is not one of the three central questions that Economists have focused on since the Great Depression?
How do we reduce income inequality?
which group represented the largest proportion of the unemployed in January 2021?
People on temporary layoff from a job
Goods or services purchased for use as an input in the production of final goods or services are:
Intermediate goods
Expenditure on new plant, equipment, and structures plus changes in business inventories is what Economists refer to as:
Investment
Juan lost his job with Ford Motor Company in September 2017. Juan's boss said that his labor services were no longer required. You see, the Ford plants have computerized and automated a large portion of automobile assembly process and a machine now performs Juan's job! The other automobile manufacturers in the area have also automated most of their assembly processes, so there's little chance of Juan securing a new position with GM or Chrysler. There doesn't seem to be much demand for Juan's skill set anymore. Which type of unemployment best reflects Juan's situation?
Structural Unemployment
Long-term changes in demand which make some goods and services obsolete are likely to have their greatest impact on:
Structural Unemployment
The Labor Force Participation Rate (LFPR) is:
The number of people in the civilian labor force divided by the number of people in the civilian non-institutional population.
According to Supplemental Handout #2, how does the Federal Reserve System define a jobless recovery?
The percentage change in Real GDP is positive, but the unemployment rate remains elevated for at least 15 months after the official end of the recession.
The process of outsourcing involves:
The relocation of American firms to produce goods in foreign countries.
If a country experiences a rise in prices but produces the same quantity of output as in the previous year, its Nominal GDP will _____ and its Real GDP will _____.
increase; be unchanged
In the short run, the Aggregate Supply curve is _____ because input prices are _____.
positively sloped; not completely flexible
The value of Spain's Real GDP for year 1990, expressed in terms of base year prices is:
$400 billion * (100.00 / 50.00) = $800 billion
During year 2019, Adam's Average Propensity to Save was:
.29
Between years 2019 and 2020, Adam's Marginal Propensity to Save was:
.40
Between years 2019 and 2020, Adam's Marginal Propensity to Consume was:
.60
During year 2019, Adam's Average Propensity to Consume was:
.71
Based on the data in the table, what is the Marginal Propensity to Consume (MPC)?
.75
The value of Spain's Real GDP for year 2014, expressed in terms of base year prices is:
1,400 billion * (100.00 / 105.00) = $1,333 billion
how many people in America were classified as unemployed in January 2021?
10130000
what was the size of America's Civilian Labor Force in January 2021?
160161000
According to Economists, Frictional Unemployment alone is responsible for an unemployment rate of:
2 to 3
Due to population growth and immigration, America's labor force also grows each year. In order to properly use these new labor resources, the economy must create at least ______ new jobs each year.
2,000,000
The base (or reference) year for the GDP Deflator is
2010
If a car is produced in Detroit in 2013 but not sold until 2014, it should be included in _____ GDP, and its value should be counted in _____.
2013's; business inventory adjustment
The Labor Force Participation Rate for year 2009 was:
60%
According to the Required Course Textbook, state and local government purchases of goods and services account for approximately __ percent of total government purchases.
67
The Labor Force Participation Rate for year 2021 was:
70%
The number of Unemployed People in year 2009 was:
9 mil
They are not in the labor force and therefore not counted in either employment or unemployment statistics.
A person employed in a job beneath the person's current capabilities, or not able to work as many hours as desired
A Phantom Unemployed person is:
A person who claims to be actively seeking work, but has no intention of finding and accepting a job
A Discouraged Worker is:
A person without a job who is not actively seeking a job, but would look for one if jobs were available
Within the context of the AD-AS Model, demand-pull inflation is illustrated as:
A rightward shift of the Aggregate Demand curve
Which of these statements BEST describes America's macroeconomic experience during the 1990s?
A short and mild recession followed by an eight-year period of economic expansion.
Which of these statements BEST describes America's macroeconomic experience since year 2000?
A short, mild recession followed by a brief period of economic expansion, then the "Great Recession" and the long, slow recovery from it.
Statement 1: A Recessionary GDP gap measures the amount by which equilibrium GDP falls short of the Full-Employment GDP. Statement 2: An Inflationary GDP gap measures the amount by which equilibrium GDP exceeds the Full-Employment GDP.
Both correct
Statement 1: Dissaving occurs when consumption expenditure exceeds disposable income. Statement 2: Approximately one half of adults between the ages of 18 and 34 admit to spending more than what they earn.
Both correct
Statement 1: Full Employment indicates that everyone who wants to work has a job. Statement 2: Full Employment occurs when zero unemployment is achieved.
Both incorrect
Statement 1: Goods and services produced in America and sold to foreign buyers are called imports. Statement 2: Goods and services produced in other countries and purchased by Americans are called exports.
Both incorrect
Statement 1: Real GDP will increase over time if the economy produces more output and if average prices rise. Statement 2: Nominal GDP will increase over time only if the economy produces more output.
Both incorrect
The term Frictional Unemployment is defined as:
Brief periods of unemployment experienced by people moving between jobs or into the labor market.
The components of Aggregate Demand (AD) are
Consumption, Investment, Government Spending and Net Exports
Delaney recently lost her job as a salesperson at the Tallahassee Ford car dealership. The US economy has fallen back into recession, and consumers are purchasing new cars at significantly reduced rate. The manager of the sales staff was instructed by the dealership owner to eliminate three members of the sales staff, and unfortunately for Delaney, she was one of those eliminated. Which type of unemployment best reflects Delaney's situation?
Cyclical Unemployment
Felipe recently lost his job as a member of the overnight stock team at the Target store on Thomasville Road. Due to the somewhat sluggish US economy, customer traffic at the Target store is pretty slow, so products don't need to be re-stocked as frequently. The Target store manager decided to reduce the size of the overnight stock team by 50%. Which type of unemployment best reflects Felipe's situation?
Cyclical Unemployment
According to Economist John Keynes, what has the strongest influence on consumption decisions?
Disposable
Which letter represents the trough of the business cycle?
E
According to Okun's Law:
Each additional one percent of unemployment translates into a two percent sacrifice of a nation's output
Which of the following persons is considered unemployed?
Emily has not worked for two months, but still applies for new jobs every week.
Is unreported income included in OR excluded when we calculate the GDP statistic using the Expenditure Approach?
Excluded
Suppose you are told that for a particular group of people, the Marginal Propensity to Consume (MPC) is 0.80. What does this mean?
For every dollar of additional disposable income received, this particular group of people will spend 80 cents of it on goods and services.
Alex has a master's degree in business administration (MBA) and six years of work experience in that field. He is currently "in between" jobs. Alex has snail-mailed out his resume to many firms. He has created an online profile at www.indeed.com and www.theladders.com to assist in the electronic portion of his job search. There are plenty of jobs available for individuals with the MBA degree, and Alex is carefully weighing his options as he searches for the position to best match his professional interests. Which type of unemployment best reflects Alex's situation?
Frictional Unemployment
Ashley is a college junior at FSU and she is currently searching for a part-time job as a waitress. Luckily, Ashley worked for two years as a waitress at a casual-dining restaurant back home in South Florida. There are plenty of restaurants here in Tallahassee that are looking to hire wait staff, especially experienced wait staff like Ashley. She's filling out job applications almost every day and speaking with each restaurant's management to research the work hours and shifts that are available. Ashley is waiting with much anticipation for that phone call saying "you're hired". Which type of unemployment best reflects Ashley's situation?
Frictional Unemployment
Carson graduated from Florida State University in December 2020 with a bachelor's degree in Statistics. He's spent the last three months searching for a professional job. There are plenty of companies out there looking to hire people with a degree in Statistics, so Carson is qualified to fill many available jobs. He is taking his time in the job search process, carefully studying the companies and positions he applies to, and is waiting to hear back regarding the status of his many applications. Which type of unemployment best reflects Carson's situation?
Frictional Unemployment
James is a 16-year-old who is looking for his very first job. Since he needs a flexible schedule to work around his remaining high-school classes, he's been filling out job applications at fast-food restaurants and retail clothing stores all over town. Fortunately for him, these are jobs that don't require experience and offer on-the-job training. There are several restaurants and mall stores looking to hire new workers, and James is anxiously awaiting a call-back regarding one or more of his completed applications. Which type of unemployment best reflects James's situation?
Frictional Unemployment
Which letter represents the expansionary phase of the business cycle?
J
Which of the following persons is considered part of the Civilian Labor Force?
Joe, a senior in high school who works part-time on weekends at the ice cream shop
The economy does not have the ability to fix its own macroeconomic problems; at least, not with reasonable speed.
Keynesian
The key to being counted as unemployed by the Bureau of Labor Statistics is to be:
Out of work, available for work and actively seeking work
Most Economists claim all of the following about the process of outsourcing except:
Outsourcing ultimately makes America worse off.
In the long run, the Aggregate Supply curve is vertical because:
Over a long period of time, rising resource costs will catch up with higher price levels thus providing no incentive to increase output.
Which of the following is NOT classified as Government Spending?
Payment to social security recipients
In Economics, investment spending includes expenditures on all of the following EXCEPT:
Portfolio of stocks and bonds
Macro equilibrium (short run) indicates the combination of __________ that is compatible with both AS and AD.
Price level and real output
which age group had the lowest unemployment rate in January 2021?
Prime Working Age Individuals (25 - 54 years old)
Which letter represents the recovery phase of the business cycle?
R
Suppose that America's average price level increases, and this causes the purchasing power of our currency to decrease. This scenario provides an example of:
Real balances
The statement Supply creates its own Demand is known as:
Says
Jacqueline was hired in April 2018 by Gallup's Karate here in Tallahassee. She worked as a counselor for 1st - 6th graders at Gallup's Daytime Summer Camp program. In mid-August 2018, she was "let go" from her position. The 1st - 6th graders had returned to public and private schools at the start of the new academic year, and the daytime camp was no longer operational. Which type of unemployment best reflects Jacqueline's situation?
Seasonal Unemployment
Michael was hired by the Pasco Citrus Company in January 2019 to help harvest the oranges and grapefruits from the trees on the company's 250-acre farm in Central Florida. In late March 2019, the manager of the Pasco Citrus Company told Michael that he was being "let go". Once the citrus has been harvested from the trees, the company no longer has a need for so many people on the payroll. Which type of unemployment best reflects Michael's situation?
Seasonal Unemployment
Toby was hired in October 2019 by the Wal-Mart Store on West Tennessee Street. He was working as few as 25 hours per week and as many as 40 hours per week throughout the months of November and December. In late January 2020, the store manager informed Toby that he was being "let go". The holiday shopping/return/exchange season had ended and the store no longer had a need for Toby's labor services. Which type of unemployment best reflects Toby's situation?
Seasonal Unemployment
The _____ shows the amount of output that US-based firms are willing to produce at various price levels, over relatively short time periods.
Short Run Aggregate Supply curve
The Civilian Labor Force includes all people who are:
Sixteen years of age or older and are either working for pay or profit or actively looking for paid employment.
Gross Exports for the United States depend directly on the:
Spending behavior of foreign consumers, businesses and government agencies.
which types of spending change a lot over the stereotypical business cycle?
Spending for durable goods, residential housing and capital goods
which types of spending don't change very much over the stereotypical business cycle?
Spending for non-durable goods and services
Statement 1: In Economics, the business cycle represents alternating periods of economic growth and contraction. Statement 2: In the United States, business cycles are remarkably similar in terms of their timing, length and severity.
Statement 1 is correct and Statement 2 is incorrect.
Statement 1: The federal government has the ability to deficit spend. Statement 2: State and local governments have the ability to deficit spend.
Statement 1 is correct but Statement 2 is incorrect.
Statement 1: If consumption and investment spending fall, state and local government spending will automatically increase to offset the impact on the economy. Statement 2: If consumption and investment spending fall, state and local government spending will also fall due to the resulting decrease in tax revenue collections. This will lead to more economic instability.
Statement 1 is incorrect and Statement 2 is correct.
Statement 1: A (short-run) Macro Equilibrium always occurs at the full-employment level of output. Statement 2: A (short-run) Macro Equilibrium can bring with it too much inflation or too much unemployment.
Statement 1 is incorrect but Statement 2 is correct.
Richard is having difficulty finding a job. In May 2020, he graduated from FSU with a bachelor's degree in Sociology. During his search for a professional job, he's discovered that most employers are looking to hire people with a STEM degree (science, technology, engineering and mathematics). After an unsuccessful nine-month job search, Richard is beginning to think that maybe he selected the wrong college major. Which type of unemployment best reflects Richard's situation?
Structural Unemployment
Steve is having difficulty finding a job. He graduated from high school back in 2017, and he's been working in various non-professional positions ever since. Steve has discovered that all professional jobs require an applicant to possess at least a four-year college degree and prefer an applicant who already has at least two years of relevant professional work experience. In order to find a professional job, Steve will likely need to acquire some formal education. Which type of unemployment best reflects Steve's situation?
Structural Unemployment
Individual employment and training programs are policy levers most likely to be supported by:
Supply Side Economists
Consumption spending consists of two components: autonomous consumption and income-dependent consumption.
T
Our macro policy goal is to produce a level of output that corresponds to full employment. The problem is that sometimes, equilibrium GDP may be greater than or less than our full-employment GDP.
T
Ultimately, business cycles result from recurrent shifts of the Aggregate Demand curve and the (short-run) Aggregate Supply curve.
T
Which of the following would be an example of a nonmarket activity?
Taking care of one's elderly parents in one's own home
which age group had the highest unemployment rate in January 2021?
Teenagers (16 - 19 years old)
Internal market forces include all of the following EXCEPT:
Terrorist attacks
Which of these statements BEST describes America's macroeconomic experience during the 1980s?
The "double-dip" recession followed by a seven-year period of economic expansion.
Which of the following suggests that lower average prices make it more difficult to cover interest payments and other costs of doing business, causing firms to reduce production?
The Profit Effect.
On Monday, it took $2.00 of US currency to purchase 1 Euro. On Friday, it took only $1.50 of US currency to purchase 1 Euro. This indicates that:
The US dollar has appreciated and Americans will find European goods cheaper to purchase
On Monday, it took $0.80 of US currency to purchase 1 Russian ruble. On Friday, it took $1.10 of US currency to purchase 1 Russian ruble. This indicates that
The US dollar has depreciated and Americans will find Russian goods more expensive to purchase
Disposable income is defined as:
The after-tax income of consumers
Which of the following is illustrated by the Aggregate Demand curve?
The relationship between the aggregate quantity of output demanded and the average price level.
What caused Classical Economic Theory to become less popular?
The theory was unable to explain the Great Depression
What happens to the economy if the unemployment rate falls below the natural rate of unemployment for an extended period of time?
The threat of demand-pull inflation dramatically increases.
Fiscal Policy is:
The use of government spending and taxes to alter macroeconomic outcomes.
Monetary Policy is:
The use of money and credit controls to alter macroeconomic outcomes.
In terms of the "musical chairs" analogy in the text, which of the following is the best description of Cyclical Unemployment?
There are too few chairs
Due to balanced budget requirements, suppose that state and local governments across America reduce their spending on goods, services and public capital projects. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Demand (AD curve)
Suppose that America's Federal Reserve System chooses to increase interest rates, making homes and durable goods more costly for millions of consumers to purchase. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Demand (AD curve)
Suppose that America's real estate market crashes again, and the average single-family home loses 50% of its value. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Demand (AD curve)
Suppose that major American banks adopt new strict lending criteria, making loans less readily available to current business owners and entrepreneurs. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Demand (AD curve)
Suppose the European Union, one of America's major trading partners, falls into recession. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Demand (AD curve)
Suppose the US dollar appreciates (gains value) against foreign currencies. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Demand (AD curve)
Suppose there is an increase in personal income tax rates, which removes money from the paychecks of millions of American workers. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Demand (AD curve)
Suppose that government agencies and private-sector companies end the policy of paying college tuition for employees to earn or upgrade college degrees. As a result, the labor productivity of millions of American workers starts to decrease. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Supply (AS curve)
Suppose the US Congress passes a new "Cap and Tax" carbon emissions plan, which significantly increases the cost of production in most manufacturing firms across America. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Supply (AS curve)
Suppose there is a major terrorist attack that destroys seaports, airports, and interstate highways all along America's West Coast. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Supply (AS curve)
Suppose there is an increase in the average wage of US workers, which increases the cost of employing labor services for millions of US business owners. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Supply (AS curve)
Suppose there is an increase in the prices of steel and computer chips, two resources used in the production of many products. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be a DECREASE (shift to the left) in America's Aggregate Supply (AS curve)
Suppose millions of US business owners believe the economy is on the brink of a strong period of economic growth and thus expect strong future sales of their products. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Demand (AD curve)
Suppose that America's Federal Reserve System chooses to reduce interest rates, making homes and durable goods less costly for millions of consumers to purchase. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Demand (AD curve)
Suppose that Canada and Mexico, two of America's largest trading partners, experience a strong period of economic growth. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Demand (AD curve)
Suppose the US stock markets (Dow Jones Industrial Average, S&P 500, NASDAQ) continue having a "bull market" and the average retirement savings account greatly increases in value. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Demand (AD curve)
Suppose the University of Michigan reports a three consecutive month increase in their measures of national consumer confidence. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Demand (AD curve)
Suppose there is a decrease in personal income tax rates, which puts additional money into the paychecks of millions of American workers. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Demand (AD curve)
Suppose that government agencies and private-sector companies begin to upgrade the personal electronic devices of their workers at a more frequent pace. As a result, the labor productivity of millions of American workers starts to increase. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Supply (AS curve)
Suppose the Midwestern states experience a very mild winter, where most businesses are closed only 4 days for snow-related issues (compared to a normal winter where businesses are closed for 10-15 days due to snow-related issues). Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Supply (AS curve)
Suppose the US Congress votes to reduce the number of regulations on firms that produce medical supplies and equipment, significantly reducing the cost of providing healthcare services in America. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Supply (AS curve)
Suppose there is a significant decrease in energy prices (oil, natural gas, coal, etc.) here in America. Within the context of the Aggregate Demand / Aggregate Supply Model, how is America's MACRO economy impacted by this event?
There will likely be an INCREASE (shift to the right) in America's Aggregate Supply (AS curve)
How are the Underemployed measured in the US government's monthly employment report?
They are counted as employed.
How are the Phantom Unemployed measured in the US government's monthly employment report?
They are counted as unemployed, even though they probably should not be counted as such.
How are Discouraged Workers measured in the US government's monthly employment report?
They are not in the labor force and therefore not counted in either employment or unemployment statistics.
Consider this economic activity: On August 3rd, 2020, Hunter paid his landlord $950 for August's rent on his apartment here in Tallahassee.
This economic activity WILL BE COUNTED in GDP for year 2020
Consider this economic activity: During the summer of 2020, the City of Tallahassee purchased and installed new landscaping, wider sidewalks and a multi-modal path along Gaines Street here in Tallahassee.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: On April 30th, 2020, Ben and his buddies celebrated the end of the Spring College Semester. They accumulated a $250 bar tab at the Applebee's on Capital Circle SE and West Tennessee Street here in Tallahassee. Wow, that's a whole lot of chicken fingers, steak and Budweiser beverages!
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: On December 31st, 2020, employees at the KitchenAid factory in Ohio discovered 873 stand mixers that were produced but not sold to customers during 2020.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: On February 13th, 2020, Melissa spent $250 at the Chelsea Salon in Tallahassee for a haircut and a new hair color.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: On January 2nd, 2020, the federal government purchased a new Boeing 747 from the firm's Seattle factory to serve as the new Air Force One for President Trump.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: On June 3rd, 2020, Alonzo purchased a 2020 Camaro from the Dale Jr. Chevrolet dealership located on West Tennessee Street here in Tallahassee. This Camaro was a special order vehicle from GM's Grand River Assembly Plant in Lansing, Michigan and was manufactured during the week of April 6th, 2020.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: On March 16th, 2020, Sonja paid a $6.95 commission to eTrade for facilitating her purchase of the $2,500 in Facebook stock.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: On May 28th, 2020, Faith paid $89 for an eye exam at the Capital Health Plan facility located here in Tallahassee.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: On September 12th, 2020, Lauren purchased $125.54 in groceries from the Publix on Ocala Road here in Tallahassee.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: Throughout calendar year 2020, BMW built its "X" series sports activity vehicles exclusively at the plant located in Spartanburg, South Carolina. These vehicles were shipped to 140 countries for retail sale.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: When Ezekiel purchased the previously-described townhome on January 21st, 2020, he also paid a $4,000 commission to the real estate agent who helped facilitate this purchase.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: Yesterday, Akari paid $150 to Merry Maids of Tallahassee to clean his very dirty apartment here in Tallahassee.
This economic activity WILL BE COUNTED in GDP for year 2020.
Consider this economic activity: Alex sells marijuana in Tallahassee's underground economy. As of November 15th, 2020, he'd earned $32,600 in profit from his sales.
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: During the summer of 2020, Grant worked for his dad's accounting firm as a runner and was paid $15 per hour but "off the books".
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: From March 23rd, 2020 through May 17th, 2020, William received a weekly unemployment compensation check for $225 from the government.
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: On April 6th, 2020, the Ford Motor Company purchased 800,000 automobile tires from the Pirelli Tire manufacturing plant located outside of Toledo, Ohio. These tires will be installed on the Mustang as it comes off the assembly line in Flat Rock, Michigan throughout the remainder of this calendar year.
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: On January 21st, 2020, Ezekiel bought a townhome for a price of $113,500. This townhome is located on Hendrix Road here in Tallahassee and was originally constructed in year 2004.
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: On January 31st, 2020, Karl received a $2,500 college financial aid check (Pell Grant) from the US government.
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: On January 8th, 2020, David purchased a used copy of our required course textbook The Macro Economy Today, 15th edition from an Ebay seller called "Velociraptor09".
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: On July 15th, 2020, Zoe bought two antique side tables from a yard sale at a home located in Northeast Tallahassee.
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: On March 16th, 2020, Sonja purchased $2,500 in Facebook stock using her online brokerage account managed through eTrade.
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: On May 18th, 2020, Buick (a division of General Motors) began building its Enclave SUV in South Korea. The auto is then shipped to China, where it is sold to customers.
This economic activity WILL NOT BE counted in GDP for year 2020.
Consider this economic activity: Yesterday, Jasper decided to clean his very dirty apartment here in Tallahassee.
This economic activity WILL NOT BE counted in GDP for year 2020.
A market-based economy is a naturally stable place, usually achieving the economic goals of Potential GDP, Full Employment and Price Stability.
This statement would most likely be made by a Classical Economist.
Government should take a laissez faire approach to the economy.
This statement would most likely be made by a Classical Economist.
Prices, wages and interest rates are fully flexible.
This statement would most likely be made by a Classical Economist.
Supply creates its own demand.
This statement would most likely be made by a Classical Economist.
The dominant economic theory before the 1930s.
This statement would most likely be made by a Classical Economist.
The economy has the ability to fix its own macroeconomic problems, and to do so with reasonable speed.
This statement would most likely be made by a Classical Economist.
A market-based economy is a naturally unstable place, fluctuating between periods of high unemployment and high inflation.
This statement would most likely be made by a Keynesian Economist.
Government should take a hands-on approach to the economy, managing the level of total spending so that macro goals can be achieved.
This statement would most likely be made by a Keynesian Economist.
Prices, wages and interest rates are inflexible in the downward direction.
This statement would most likely be made by a Keynesian Economist.
According to Figure 9.8 in the Required Course Textbook, which of the statements provided below is correct?
Total investment spending is more volatile than total consumption spending in the US economy.
The term Structural Unemployment is defined as:
Unemployment caused by a mismatch between the skills or location of job seekers and the skill requirements or location of available jobs.
The term Seasonal Unemployment is defined as:
Unemployment due to seasonal changes in employment or labor supply.
Which of the following was not a characteristic of the US economy during the Great Depression?
Unemployment reached 50 percent
stimulated the US governments commitment to tracking the economy health through national income
great depression
