ECON 211 Quiz 5

An increase in the government's budget surplus means public saving is

positive and increasing

Evidence from research studies by economists

shows that increased unemployment benefits decrease the job search efforts of the unemployed

In a closed economy, private saving is

the amount of income that households have left after paying for their taxes and consumption.

If there is a shortage of loanable funds, then

neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium.

For a closed economy, GDP is $31 trillion, consumption is $7 trillion, taxes are $3.0 trillion and the government runs a surplus of $4 trillion. What are private saving and national saving?

$21.0 trillion and $25.0 trillion, respectively

Suppose a closed economy had public saving of −$7 trillion and private saving of $16 trillion. What are national saving and investment for this country?

$9 trillion, $9 trillion

Refer to Figure 28-1. If the government imposes a minimum wage of $6, then how many workers will be unemployed?

0

Table 28-4The following data is about the labor market in the city of Productionville. ​ Wage (Dollars per hour) 8 7 6 5 4 Quantity Demanded (Units) 6,000 9,000 12,000 15,000 18,000 Quantity Supplied (Units) 16,000 14,000 12,000 10,000 8,000 ​ ​ Refer to Table 28-4. If the local government imposed a minimum wage of $4 in Productionville, how many people would be unemployed?

0

Suppose that the adult population in the country of Atlantis is 140 million. If 90 million people are employed and 10 million are unemployed, then

40 million are not in the labor force.

Figure 26-3 The figure shows two demand-for-loanable-funds curves and two supply-of-loanable-funds curves. ​ Refer to Figure 26-3. Which of the following movements shows the effects of households' decision to save more?

A movement from Point C to Point F

Alex buys 1,000 shares of stock issued by Greg Brewing. In turn, Greg uses the funds to buy new machinery for one of its breweries.

Alex is saving; Greg is investing

Which of the following is an explanation for the existence of frictional unemployment

Job search

Maria is looking for work as a electrical engineer. Her prospects are good but so far she has not taken a job. Julie is looking for work in a paper mill. Every time Julie shows up for an interview, there are more people looking for work than there are openings. She realizes that it has been that way for a long time.

Maria is frictionally unemployed, and Julie is structurally unemployed.

Consider the expressions T − G and Y − T − C. Which of the following statements is correct?

The first of these is public saving; the second one is private saving

When a union bargains successfully with employers, in that industry,

both wages and unemployment increase.

Figure 26-1 The figure depicts a demand-for-loanable-funds curve and two supply-of-loanable-funds curves. Refer to Figure 26-1. What is measured along the vertical axis of the graph?

The interest rate

In 2002 mortgage rates fell and mortgage lending increased. Which of the following could explain both of these changes?

The supply of loanable funds shifted rightward

Which of the following is not correct?

The unemployment rate occasionally falls to zero

Which of the following is correct? a) Union membership in the United States peaked in the 1940s and 1950s. b) Unions play a larger role in the United States than in European countries such as Belgium, France, and Germany. c) Because of the popularity of unions, most workers in the United States discuss their wages, benefits, and working conditions with their employers as a group. d) Individuals have more market power over their wages than a group of individuals in a union.

a

Scenario 26-1. Assume the following information for an imaginary, closed economy. ​ GDP $170,000 Taxes $23,000 Government Purchases $31,000 National Saving $17,000 ​ Refer to Scenario 26-1.This economy's government is running a budget

deficit of $8,000

Suppose the U.S. offered a tax credit for firms that built new factories in the U.S. Then the

demand for loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate.

To be counted as "employed" in the U.S. 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.

In Belgium, Norway, and Sweden, the percentage of workers who belong to unions is

greater than it is in the United States.

Unions contribute to

the natural rate of unemployment but not frictional unemployment.

Sasha is on temporary layoff. The Bureau of Labor Statistics counts Sasha as

unemployed and in the labor force