unit 2 macro baddar

1.All the following are examples of a final good or service except _________, it's an intermediate one.

Printing paper 'newsprint' bought by USA Today

5.Choose the correct statement

a.Expenditure on goods purchased at garage sales does not appear in the U.S. National Income and Product Accounts and does not appear as a flow in the circular flow of expenditure and income

6."The U.S. Postal Service plans to reduce its workforce by 220,000 jobs to remedy its dire financial situation. The Postal Service, financed mostly by postage, has been struggling as a result of the economic slowdown. The cut in employment at the U.S. Postal Service results in ______ unemployment because _______

.cyclical; the workforce is being decreased because of the economic slowdown

9.Which of the following are included in the income approach to measuring GDP?

b.rent; wages; interest; profits

2.The Bureau of Labor Statistics reported that in March 2015, the labor force in Michigan was 4,739,000, and employment was 4,467,000. What's the unemployment rate?

a.5.7%

7.If real GDP is $1,000,000, exports are $200,000, imports are $300,000, and aggregate labor hours are 100,000, labor productivity is _____.

a.$10 per hour

5.According to the table below, labor productivity in 2014 was _______, and in 2015 it was ____________.

a.$39.58/hour; $40.34/hour

The macroeconomic equilibrium occurs at a price level of _______ and real GDP of ​_______.

a.110; $800 billion

9.Here are four statements about the types of unemployment. Which of these statements is correct? ((1)) An unemployed graduate searching for a first job is an example of frictional unemployment.This type of unemployment arises from normal labor turnover. ((2)) An unemployed textile worker in South Carolina who loses her job because of competition from China is an example of structural unemployment. This type of unemployment arises when changes in technology or international competition change the skills needed to perform jobs. ((3)) An autoworker who loses his job in a recession is an example of cyclical unemployment. This type of unemployment arises in recessions. ((4)) An autoworker who loses his job because of a slowdown in the economy is an example of frictional unemployment. This type of unemployment arises in recession

a.Statements 1, 2, & 3 are true. Statement 4 is false

3.A rise in Net Exports (NX) __________.

a.increases GD

1.Economic growth _______.

a.is a sustained expansion of production possibilities

In the long run, ______.

aggregate supply decreases, the price level rises, and real GDP decreases to potential GDP

When the Mexican government sets new environmental standards that require factories to upgrade their production facilities, investment in Mexico increases and Mexico's aggregate demand ______.

b.increases. The AD curve shifts rightward

6.The growth rate of labor productivity for the following economy is _____.

b.1.92%

6.An economy produces only fun and food. The table shows the quantities of fun and food produced and the prices of fun and food in 2016 and 2017. The base year is 2016. What is the percentage increase in real GDP in 2017?

b.4.5%

2. All the following are examples of Consumption goods except ________, it's an Investment.

b.United Airlines purchases new aircrafts

8.In today's economy, the percentage of the employed people who have part-time jobs increases in_______ because _______.

b.a recession; firms cut work hour

If potential GDP is $600 billion, the economy is _______

b.above full employment and has an inflationary gap

4."Despite some optimism about the seeds of recovery, the Congressional Budget Office (CBO) sees joblessness rising. The CBO sees unemployment peaking at 10.4% next year from an average of 9.3%this year, before it falls to 9.1% in 2011.Before the recession began, the U.S. unemployment rate was about 6 percent. As a recession begins, firms quickly make layoffs. Is this rise in unemployment mostly a rise in frictional, structural, or cyclical unemployment? The resulting rise in unemployment is mostly a rise in ______ unemployment because _______

b.cyclical; it is related to the state of the economy

In past recessions, firms have cut their labor costs by laying off workers. During this recession, many firms and state governments have trimmed labor costs by cutting pay or shortening the workweek, rather than laying off workers.Source: The New York Times, October 13, 2009What effect might the strategy of cutting pay or the workweek rather than laying off workers have on the depth of the recession and the unemployment rate? Answer: In comparison to laying off workers, cutting pay and shortening the workweek ______ the unemployment rate and makes the recession ______.

b.decreases; less dee

8.The central proposition of the new growth theory is that the economy ___________

b.does not experience diminishing output

10.Economic freedom is a precondition to economic growth

b.false

7."The U.S. Department of Labor reported that Michigan's unemployment rate in June 2009 rose to15.2%, becoming the first state in 25 years to suffer an unemployment rate exceeding 15%. Michigan has been battered by the collapse of the auto industry and the housing crisis and has had the highest unemployment rate in the nation for the past 12 months. Is this increased unemployment frictional, structural, or cyclical? Explain.The increased unemployment rate in Michigan is _____.

b.structural that arises due to changes in international competition, and cyclical due to a downturn in the U.S. economy

9.Is economic freedom the same as democracy?

c.No. Economic freedom does not have to occur in a democra

7.In the example above, we can say that the economy is experiencing _______________

c.an expansion; since real GDP is increasing

if the government of Mexico cuts income taxes, Mexico's aggregate demand ______.

c.increases, and the aggregate demand curve shifts rightward

1.The unemployment rate in European countries tends to be higher than the one in the US because______.

c.it is more difficult to be considered "unemployed" in the US than in Europe.

2.The economic growth rate is the annual percentage change of ______

c.real GDP

4.Between 1914 and 2014, the average growth rate of real GDP per person in the United States was 2 percent a year. During this period, ______ grew at a faster rate than ______.

c.real GDP; the population

5."Bank of America officials have discussed eliminating about 40,000 positions during the first wave of..., as it closes branches in response to the growth of online banking. The cut in employment at Bank of America results in ______ unemployment because _______.

c.structural; the labor restructuring is in response to changing technology

3.The unemployment rate tends to actually underestimate the unemployment problem, especially during a recession because ______

c.the number of marginally attached workers increases, but these workers are not included in the official unemployment rate

3.Real GDP growth rate = ______.

d.[(Real GDP in current year - Real GDP in previous year) ÷ Real GDP in previous year] X 100

Also related to the quote above (in previous question), the changes in exports and imports _______ aggregate demand because _______

d.decrease; exports increased by less than imports increased

In the short run, when the price level in India increased India's aggregate supply ______

d.didn't change, but the quantity of real GDP supplied increase

8.Real GDP ______

d.does not accurately measure leisure time, environment quality, or political freedom and social justice

4.U.S. gross domestic product is the market value of all the ______ produced ______ in a given time period

d.final goods and services; within the United State

In the short run, when Indian universities increased the number of engineering graduates India's aggregate supply ______

d.increased

In the short run, when U.S. firms moved their IT and data functions to India, India's aggregate supply______

d.increased

6.The BEA announced that demand for durable goods rose 3.4%, while new-home sales rose 13.4% in the second quarter of 2013. U.S. exports increased 5.4%, while U.S. imports increased 9.5%.Source: Bureau of Economic Analysis, July 31, 2013Explain how the items in the news clip influence U.S. aggregate demand. The increase in the demand for durable goods ______ aggregate demand. And the increase in new-home sales ______ aggregate demand.

d.increases; increase

10.We are at "full employment" when ____________.

d.when cyclical unemployment is zero