ECON

Menu costs are the real costs of changing listed prices. costs of money becoming less reliable. adjustments to the cost of living. increase in the transaction costs caused by inflation

A

Which of the following institutions is important for channeling savings into investment? banks religious institutions schools the federal government

A

If real GDP doubles in 12 years, its average annual growth rate is approximately: 4%. 6%. 3%. 5%

B

The severe inflation in Israel during the mid-1980s was due to a war, an unstable government, and civil unrest in the country A. true b. false

B

The short-run aggregate supply curve illustrates: the negative relationship between the aggregate price level and aggregate output supplied. the positive relationship between the aggregate price level and aggregate output supplied. the price level at which real output will be consumed. the price level at which real output will be in equilibrium.

B

don has built an addition to his house this transaction will be a. included in GDP because Don is a professional builder. b. included in GDP because building is Don's hobby. c. not included in GDP because it is not produced for the marketplace. d. not included in GDP because it is an intermediate good

C.

In a particular labor market, the demand for labor is given by W = 20 - (1 / 100)L, and the supply of labor is given by W = 4 + (1 / 100)L, where W is the wage rate, and L is the number of workers. Suppose government decides to impose a minimum wage of $15. The wage will: cause a surplus of workers, since it is above the equilibrium wage. result in increases in wages for workers who were employed at the equilibrium wage only. have no effect, since it is below the equilibrium wage. cause a shortage of workers, since it is above the equilibrium wage

a

People who are changing jobs are counted in _____ unemployment. frictional cyclical structural involuntary

a

Suppose that real GDP per capita of the United States is $32,000 and its growth rate is 2% per year. Real GDP per capita of China is $4,000, and its annual growth rate is 7%.Look at the scenario Growth Rates. How long will it take China's real GDP per capita to double? 10 years 35 years 50 years 14 years

a

To encourage an increase in economic growth rates, governments should increase regulation of the economy. False True

a

GDP in the United States was $5,803 billion in 1994 and $11,734 billion in 2008, so we can conclude that aggregate output roughly doubled over the 14-year period in the United States. True False

b

Suppose that the economy is currently at potential output. Also suppose that you are an economic policy maker and that a college economics student asks you to rank, if possible, your most preferred to least preferred type of shock: positive demand shock, negative demand shock, positive supply shock, negative supply shock. Choose the correct statement. The least preferred shock would be a positive supply shock. It is unclear how economic policy makers would rank positive and negative demand shocks. The most preferred shock would be a negative supply shock.

b

Sustainable long-run economic growth is long-run growth that can continue in the face of decreases in the growth rate of the world's population. True False

b

The Republic of Livonia has an adult population of 100 million; 60% of Livonia's population is employed, and 10% of the people are unemployed. The labor force participation rate in Livonia is: 7%. 70%. 10%. 60%

b

The most important use of GDP is to measure of the size of the economy, which can be used to compare economic performance over time or between countries. False True

b

The official unemployment rate reported by the government may tend to understate the amount of unemployment because it: includes discouraged workers. excludes discouraged workers. excludes teenagers. includes people over 65 who aren't retired

b

Which of the following is an example of cyclical unemployment? A geologist is permanently laid off from an oil company because of a technological advance. An autoworker is laid off because a recession has caused a decline in sales. A worker at a fast-food restaurant quits work and attends college. A real estate agent leaves a job in Texas and searches for a similar higher-paying job in California

b

Real GDP tends to understate our economic well-being because it a.includes the value of services produced in the home. b.includes expenditures on crime prevention equipment. c.excludes the value of leisure. d.includes health care costs related to the consumption of cigarettes

c

Ron quit his job in retail management and moved to Florida with his wife, a physician who opened a new practice there. He was not successful in his job search for the next four months. Ron's unemployment is: structural. cyclical. frictional. seasonal.

c

GDP is the: dollar amount of all sales made in the economy in one year. volume of all dollar transactions made in an economy in one year. total accumulated wealth of an economy. total market value of all final goods and services produced in an economy in one year

d

The point where the long-run aggregate supply curve intercepts the horizontal axis is: the level of real GDP the economy would produce if all prices were flexible and wages were fixed. impossible to attain. the point that reflects the economy's actual output. the economy's potential output

d

Long run

the aggregate price level has no effect on the quantity of aggregate supplies