Econ 302 Ch 2

If the adult population equals 250 million, of which 145 million are employed and 5 million are unemployed, the labor force participation rate equals ______ percent.

60

The study of the economy as a whole is called:

Macroeconomics

Assume that a rancher sells McDonald's a quarter-pound of meat for $1 and that McDonald's sells you a hamburger made from that meat for $2. In this case, the value included in GDP should be:

$2.

Macroeconomists are like scientists because they both:

collect data, develop hypotheses, and analyze the results.

Real GDP means the value of goods and services is measured in ______ prices.

constant

A woman marries her butler. Before they were married, she paid him $60,000 per year. He continues to wait on her as before (but as a husband rather than as a wage earner). She earns $1,000,000 per year both before and after her marriage. The marriage:

decreases GDP by $60,000.

According to the definition used by the U.S. Bureau of Labor Statistics, people are considered to be unemployed if they:

do not have a job, but have looked for work in the past 4 weeks.

In the U.S. economy today, real GDP per person, compared with its level in 1900, is about:

eight times as high.

GDP is the market value of all ______ goods and services produced within an economy in a given period of time.

final

The investment component of GDP includes all of the following except:

purchases of corporate stock.

A graph of the rate of inflation in the United States over the twentieth century shows:

some periods of deflation in the first half of the century, but only positive rates of inflation in the second half of the century.

Which of the following is the best example of a sticky price?

the price of a soda in a vending machine

The GDP deflator is equal to:

the ratio of nominal GDP to real GDP.

In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:

the supply curve slopes upward and to the right.

An economy's ______ equals its ______.

total income; total expenditure on goods and services

If nominal GDP in 2009 equals $14 trillion and real GDP in 2009 equals $11 trillion, what is the value of the GDP deflator?

1.27

Chain-weighted measures of real GDP make use of prices from:

a continuously changing base year.

According to the definition used by the U.S. Bureau of Labor Statistics, a person is not in the labor force if that person:

is going to school full time.

In the relationship expressed in functional form, Y = G(K, L), Y stands for real GDP, K stands for the amount of capital in the economy, and L stands for the amount of labor in the economy. In this case G( ):

is the function telling how the variables in the parentheses determine real GDP.

The labor force equals the:

number of employed and unemployed individuals.