Econ 320 Exam 1
Ruritania has a labor force of 50 million people. Currently 48.2 million are employed. What is the Ruritanian unemployment rate?
3.6 %
When comparing economic performance in different years, economists:
adjust for changes in prices.
The inflation rate measures how fast:
prices are rising
The GDP deflator enables economists to make adjustments for changes in:
prices.
Which best describes the path of U.S. unemployment over time? A. Unemployment rose in the Great Recession and has remained persistent since then. B. Unemployment never falls below 4 to 5 percent. C. There is no discernible long-term trend in unemployment. D. Unemployment only occurs during recessions.
C. There is no discernible long-term trend in unemployment.
The national income identity is expressed as:
Y = C + I + G + NX.
The prices of capital goods are:
not included in the CPI but are included in the GDP deflator.
How do economists define 'gross national product?'
Total expenditure on an economy's output of final goods and services plus net foreign earning
Which statement is TRUE about economists' models? A. Microeconomic models are based on a macroeconomic foundation. B. Microeconomic and macroeconomic models have little in common. C. Unlike microeconomics, with its plethora of models, macroeconomics relies on very few models. D. Macroeconomists employ a variety of models, each focused on a specific problem or set of problems.
D. Macroeconomists employ a variety of models, each focused on a specific problem or set of problems.
Which is most likely TRUE about how prices behave? A. Prices are sticky in the long run and flexible in the short run. B. Prices are flexible regardless of the time frame. C. Price are typically sticky regardless of the time frame. D. Prices are sticky in the short run and flexible in the long run.
D. Prices are sticky in the short run and flexible in the long run.
What is the most important measure of overall economic performance?
Gross domestic product
Which best describes the path of U.S. inflation over time? A. Inflation has been steadily growing in recent decades. B. Inflation in recent decades has been less volatile. C. In recent decades, deflation has occurred about as often as inflation. D. The Fed has been able to eliminate inflation.
B. Inflation in recent decades has been less volatile.
Why are models useful when studying economics?
Models can help us dispense with irrelevant details and focus on underlying connections.
In a supply-and-demand model, which variables are exogenous and which are endogenous?
Price and quantity are endogenous, income and the cost of materials are exogenous.
Which best describes changes in U.S. GDP over time? A. Real GDP rises over time, but its growth is not steady. B. Real GDP is constant; only nominal GDP changes. C. Real GDP grows at a consistent rate over time. D. Real GDP falls in about as many years as it rises.
Real GDP rises over time, but its growth is not steady.
What does the annual percentage change in the GDP deflator tell us?
The inflation rate
Which is usually implicit in macroeconomic models? A. The interest rate B. The unemployment rate C. The optimizing behavior of households and firms D. The economy's growth rate
The optimizing behavior of households and firms
How do economists define 'investment?'
The purchase of newly created goods and services to add to the capital stock
What does real GDP measure?
The total income of everyone in the economy in a given time period adjusted for price changes
The market basket used to measure price changes is:
fixed in the CPI but changing in the GDP deflator.
