Economics Exam 3

__________ analysis addresses the question of whether a policy should be used, while __________ analysis addresses the economic consequences of a particular policy.

Normative; positive

Which of the expenditure components of GDP can be negative?

net exports

Investment spending includes spending on:

new capital goods

the government purchases component of GDP includes:

purchases of final goods and services

regular interest payments made to bondholders are called _______ payments

coupon

the situation when price of most goods and services are falling over time is called:

deflation

To aggregate 300 tons of steel, 5,000 bushels of wheat, and 1 million barrels of crude oil, economists add together the _______ of the three products.

dollar value

Susan clark would like to work forty hours per week, but can only find twenty hours per week of work. In the official employment statistics, Susan is classified as:

employed

Macroeconomic issues include all of the following EXCEPT:

energy reserves

Savings deposits are ________ the M1 measure of money and _________ the M2 measure of money.

excluded from; included in

A decision by Congress to reduce spending in order to balance the government's budget is an example of _______ policy

fiscal

If tax revenues equal 20 percent of total output and government expenditures equal 25 percent of total output then there is a:

government budget deficit

the four categories of final users of GDP are:

households, firms, governments, and the foreign sector

Which of the following is the best example of money used as a medium of exchange?

in a prisoner of war camp, cigarettes are traded for socks, candy, and/or food, even by nonsmokers.

If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 200 million, then output per person:

remains constant

Government purchases include all of the following except:

social security benefits paid by the federal government

The total market value of production in an economy must equal total:

spending on final goods and services

A CPI that equals 1.34 in 2008 (when 2000 is the base year) means that:

the average level of prices is 34 percent higher in 2008 than in the base year

the maturation date of a bond is the date at which:

the principal will be repaid

Bank Reserves divided by bank deposits is called:

the reserve/deposit ratio

GDP can be measured as each of the following except:

total business revenues

It its exports are greater than its imports, then a country has a:

trade surplus

Suppose that the total expenditures for a typical household in 2010 equaled $2,500 per month, while the cost of purchasing exactly the same items in 2015 was $3,000. If 2010 is the base year, the CPI for 2010 equals

1.00

in a country with 200 million people aged 16 years and older, 120 million are in the labor force, and 114 million are employed, what is the participation rate?

60 percent

If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?

7

Which of the following events would increase the unemployment rate, if nothing else changed?

Employed workers leave the labor force

Who of the following would be considered a discouraged worker

Frank would like to work, but has not looked for work because he believes no jobs are available

Which of the following transactions would be included in the GDP of the United States?

Honda produces cars in Ohio

Gross domestic product (GDP) equals the _______ of final _______ produced within a country during a given. period of time.

Market value; goods and services

_________ policy focuses on the nation's money supply, while _______ policy focuses on the government's budget.

Monetary; fiscal

___________ policy focuses on the nation's money supply, while _______- policy aims at changing the underlying structures or institutions of the economy.

Monetary; structural

Which of the following would increase the investment component of U.S. GDP?

a laundry in Seattle purchases a new clothes-washing machine produced in the U.S.

In Econland exports equal 15% of total output, while imports equal 20% of total output. Econland has:

a trade deficit

normative analysis

addresses the question of whether a policy should be used

The direct trade of goods and services for other goods and services is called:

barter

Shares of stock are:

claims to partial ownership of a firm

The two main responsibilities of the Federal Reserve System are to ______ and to ______.

conduct monetary policy; oversee financial markets

If average labor productivity increases while population and the number of employed workers remain constant, the total output:

increases

in the base year, real GDP _________ nominal GDP.

is equal to

If prices in the current year are higher on average than in the base year, real GDP in the current year ______ nominal GDP in the current year.

is less than

in a fractional-reserve banking system the reserve/deposit ratio equals:

less than 100 percent

Double coincidence of wants is avoided if money is used as a:

medium of exchange

If average labor productivity increases, then the same number of employed workers will always produce:

more total output