econ

Between 2018 and 2021, an outbreak of African Swine Fever that spread to dozens of countries led to the slaughter of nearly one-quarter of all the world's domesticated pigs. We would expect that this outbreak would cause the supply of pig leather as well as other pork byproducts such as drumheads, violin strings, and pig-bristle paint brushes to_

Decrease

Given that the company cannot change the price of sweaters, consider the number of sweaters it orders each month from the company that makes its sweaters. If inventories become very high, will the catalog company increase orders, decrease orders, or keep orders the same?

Decrease orders.

If a catalog company finds its inventory of sweaters rising, what does that tell you about the demand for sweaters?

Demand was unexpectedly low

Consider a nation in which the volume of goods and services is growing by 5 percent per year. If a country's economic size is growing faster than the rest of the world, then

this country will gain influence in the international sector.

If foreigners spend $7 billion on U.S. exports in a given year and the United States spends $5 billion on imports from abroad in the same year, what is the value of U.S. net exports?

+ $2 billion

If real GDP grows at 7 percent per year, then real GDP will double in approximately_________years

10

How is a market demand curve derived from individual demand curves?

Add up quantities demanded by all individual consumers for each price.

Which statement is consistent with the law of supply?

An increase in market price will lead to an increase in quantity supplied

find a person who has what you want and a person who needs what you have to offer

Barter requires that you

Who gains from inflation?

Borrowers

How is the market supply curve derived from the supply curves of individual producers?

By adding up the quantities supplied by all individual producers for each price

the goods and services that money can buy.

Consider the statement: "We want money only to part with it." When people express a desire to have money, they really want

Which of the following statements is true?

Deflation means that the price level is falling, whereas with inflation overall prices are rising

Given what the catalog company does with its orders, what is likely to happen to employment and output at the sweater manufacturer?

Employment will fall (Correct)and output will fall (Correct.)

a government-appointed planning board based on the board's long-term priorities.

In a command economy, scarce goods are allocated by

market prices that are determined by consumers and producers acting in their own self-interest

In a market system, scarce goods are allocated by

businesses sell goods and buy labor; households buy goods and sell labor.

In the circular flow model,

resource markets provide for the exchange of labor and product markets provide for the exchange of goods and services

In the circular flow model,

real goods and services and a flow of money

In the goods and services portion of the circular flow model, there is a flow of

If the company could change the price of sweaters, would it raise the price, lower the price, or keep the price the same

Lower the price

For each stock in the stock market, the number of shares sold daily equals the number of shares purchased. That is, the quantity of each firm's shares demanded equals the quantity supplied. Why, then, do the prices of stock shares change?

Prices change in reaction to a mismatch between quantity demanded and quantity supplied

Which of the following statements is true?

Real GDP is nominal GDP divided by the price index

In which of these two statements are the terms "supply" and "demand" used correctly? A: "In the corn market, demand often exceeds supply, and supply sometimes exceeds demand. B: "The price of corn rises and falls in response to changes in supply and demand

Statment B

Who measures the labor force, and how is it defined?

The U.S. Bureau of Labor Statistics (BLS) measures the labor force as people over 16 years of age who are employed and those who are actively seeking work

Net exports might be a negative amount if

The United States spends more on imports than foreign countries spend on exports from the United States.

provides a common value that makes buying and selling transactions simpler than would be the case with barter.

The use of money

Seasonal variations and long-run trends complicate the measurement of the business cycle because

There is a pre-Christmas spurt in production and sales and a January slackening. This normal seasonal variation does not signal boom or recession. From decade to decade, the long-term trend (the secular trend) of the U.S. economy has been upward. A period with no GDP growth thus does not mean all is normal but that the economy is operating below its trend growth of output.

The Bureau of Labor Statistics (BLS) calculates the inflation rate from one year to the next by

To calculate the inflation rate from one year to the next, the BLS subtracts the CPI of the previous year from the CPI of the most recent year, and then divides by the CPI of the previous year (percentage change in the price level).

Is U.S. border patrol a public good or a private good? What type of good is satellite TV

U.S. border patrol is a public good, but satellite TV is a private good.

A reduction in market price will lead to an increase in quantity demanded

Which statement is consistent with the law of demand?

The GDP price index is

a measure of the price of a specified collection of goods and services compared to the price of a highly similar collection of goods and services in a reference year

Suppose that in the market for computer memory chips, the equilibrium price is $50 per chip. If the current price is $55 per chip, then there will be _ of memory chips.

a surplus

The sum of the MPC and the MPS must equal 1 because

all additional income must be spent or saved

The Consumer Price Index (CPI) is determined each month by

comparing the value of a "market basket" of goods that consumers typically purchase to the value of the basket in a base year

Many firms strive to maintain stable prices because

consumers prefer stable, predictable prices

Economists agree that _________ inflation reduces real output.

cost-push

The type of inflation that is more likely to be associated with a negative GDP gap is

cost-push inflation.

If there is an increase in the unemployment rate, the size of the labor force

could increase or decrease

The type of inflation that is more likely to be associated with a positive GDP gap is

demand-pull inflation.

Investment as defined by economists differs from investment as defined by the general public in that

economic investment refers to the purchase of machinery, whereas financial investment is the purchase of financial assets.

Suppose that just by doubling the amount of output that it produces each year, a firm's per-unit production costs fall by 30 percent. This result is an example of:

economies of scale

Hyperinflation might lead to a severe decline in total output if

everyone starts speculating and searching for ways to avoid inflation.

Gross domestic product does not include the value of the stocks and bonds bought and sold because these transactions are considered

financial investment and should not be counted as production of final goods and services

The losers from inflation are those with

fixed incomes in nominal terms.

Net exports are a country's export of

goods and services less its imports of goods and services.

Banks and other financial institutions

help allocate resources to the most productive investments.

There is a trade-off between the amount of consumption that people can enjoy today and the amount of consumption that they can enjoy in the future because

households must save today if they want to increase their future consumption, thus providing funds for investment.

Economists include only final goods and services when measuring GDP because

if intermediate goods were counted, then multiple counting would occur.

What are the determinants of supply?

income, prices of other goods, technology, tastes and preferences,resource prices.

A major new invention can lead to an expansion if there are

increases in investment, consumption, output, and employment

If firms expect the future returns for an investment to be very low, all else equal, they will

invest less

A cost of economic growth is

it has not solved sociological problems such as poverty, homelessness, and discrimination.

Macroeconomists focus on just a few key statistics when trying to understand the health and trajectory of an economy because

it is too difficult to process all of the information in each market or for every good or service in the economy. Correct

A price ceiling will result in a shortage only if the ceiling price is _ the equilibrium price.

less than

The nominal interest rate

minus the inflation rate is the real interest rate.

Prices tend to become _________ over time.

more flexible

A public good is

nonrival and nonexcludable

Today's poor countries are

not always destined to be poor if they can develop the appropriate institutions to catch up to the wealthier countries

If a country's standard of living is growing by 5 percent per year, it implies that

output is increasing at a rate of 5 percent above the population growth.

In sequential order, the four phases of the business cycle are

peak, recession, trough, and expansion

The free-rider problem occurs when

people benefit from the public good without contributing to the cost

Consider the statement: "Politicians would make more rational economic decisions if they weren't running for reelection every few years." This statement recognizes that

political officeholders who must seek voter support will favor programs with short-term benefits and reject programs with long-term benefits.

Demand-pull inflation occurs when

prices rise because of an increase in aggregate spending not fully matched by an increase in aggregate output.

An increase in _________GDP guarantees that more goods and services are being produced by an economy.

real

The more reliable measure for comparing changes in the standard of living over a series of years is

real GDP

Inflation

reduces the purchasing power of the dollar

Some countries today are much poorer than other countries becaus

some countries began the process of modern economic growth sooner.

The difference between the MPC and the APC is that

the MPC is the change in consumption divided by the change in income, whereas the APC is total consumption divided by total income

Investment spending may increase even in a period when real interest rate rise if

the expected rates of return are rising faster than real interest rates

Nominal GDP is

the market or money value of all final goods and services produced by the economy in a given year, whereas real GDP is adjusted for inflation

The central economic idea humorously illustrated in the Last Word "Toppling Dominoes" is

the multiplier effect

The unemployment rate is defined as

the number of unemployed persons divided by the labor force

A financial crisis can lead to a recession because it can cause

wealth and income to fall, thereby reducing spending and ultimately reducing employment.

A reduction in the real interest rate will increase investment spending, other things equal, because firms will make an investment purchase only if the expected return is

greater than or equal to the real interest rate at which it can borrow.

Typically, a higher saving rate is associated with

higher investment rates and higher rates of growth

The benefits of economic growth, particularly as measured by real GDP per capita, include

higher living standards for the vast majority of people

A downshift of the consumption schedule typically involves an equal upshift of the saving schedule. The exception to this relationship occurs when

there is an increase in personal taxes, then consumption and saving both shift downward

A positive unemployment rate—more than zero percent—is fully compatible with full employment because at full employment

unemployment includes frictional unemployment, which is always positive because people are transitioning to new jobs

Public goods are not privately provided because

when goods are nonexcludable, those purchasing the good could allow others the use without requiring compensation

An increase in your nominal income and a decrease in your real income might occur simultaneously if

your nominal income increases less than the cost of living increases

Real GDP equals _________blank times _________blank.

labor input; labor productivity

The business cycle affects output and employment in capital goods industries and consumer durable goods industries more severely than in industries producing consumer nondurables because

these goods last, so that purchases can be postponed

When measuring GDP, economists don't include the value of the used furniture bought and sold because

this value was already counted in GDP in some previous year.

The length of a complete business cycle

varies greatly in duration and intensity