Economics review final

An increase in expected future income will? (A.)increase aggregate demand and aggregate supply. (B)decrease aggregate demand and aggregate supply. (c)increase aggregate demand. (D)increase aggregate supply

(C)increase aggregate demand.

The percentage change in one's real income can be approximated by the percentage change in A. price level divided by the percentage change in nominal income. B. nominal income divided by the percentage change in price level. C. nominal income minus the percentage change in the price level. D. price level minus the percentage change in nominal income.

C. nominal income minus the percentage change in the price level.

Generally speaking, the government implements fiscal policy in a A.slow but accurate manner. B.fast and accurate manner. C. slow and inaccurate manner. D. fast but inaccurate manner.

C. slow and inaccurate manner.

A government will create a surplus in a market when it sets a price A. ceiling above the equilibrium price. B. ceiling below the equilibrium price. C. floor below the equilibrium price. D. floor above the equilibrium price.

D.floor above the equilibrium price.

In the mid-1970s, changes in oil prices greatly affected U.S. inflation. When oil prices rose, the U.S. would experience a.cost-push inflation and falling output. b.demand-pull inflation and falling output. c.cost-push inflation and rising output. d.demand-pull inflation and rising output.

a.cost-push inflation and falling output

THe principle of volunatary exchange is based on the idea a. making assumptions b. rational self-interest c. thinking at the margin d. selfishness e.isolating varible

b.rational self-interest

An increase in the price level in the economy leads to a. a leftward shift in the demand for money curve b. a leftward movement along the demand for money curve. C. a rightward shift in the demand for money curve. D. a rightward movemnt along the demand for money curve.

c

Kara voluntarily quit her job as an insurance agent to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management. Kara presently is

frictionally unemployed.

When referring to " marginal " changes the economic is focus on

small or incemental changes

A decrease in aggregate supply means a. the real domestic output would decrease and the price level would rise. b. both the real domestic output and rises in the price level would become greater. c. the real domestic output would increase and rises in the price level would become smaller. d. both the real domestic output and the price level would decrease.

the real domestic output would decrease and the price level would rise.

The sloe of the line between the points hwere income equals 50 and income equals 200 is

y2-y1/x2-x1 = 200-50/10-30

What is the main problem with mild inflation according to some economists? A. It diverts productive time towards activities to hedge against inflation. B. It increases frictional and structural unemployment in the economy. C. It reduces the size of the GDP gap. D. It leads to unanticipated deflation.

A. It diverts productive time towards activities to hedge

Which of the following is not a characteristic of cost-push inflation? A. falling unemployment B. falling real output C. rising general price level D. automatically self-limiting

A. falling unemployment

If the size of the capital stock in an economy is stationary, A. net investment is zero. B. GDP is zero. C. capital consumption (or depreciation) is zero. D. gross investment is zero.

A. net investment is zero.

The vertical axis of a graph that shows a market supply curve indicates the A. prices at which firms would be willing and able to sell their different products. B. number of sellers who are in the market for this product. C. cost of the amount of output produced. D. various quantities of output at which the market will be cleared.

A. prices at which firms would be willing and able to sell

Fiscal policy is often initiated on the advice of the A.Council of Economic Advisers. B.Federal Reserve Board. C.Joint Economic Committee. D.Congressional Budget Office.

A.Council of Economic Advisers.

Which of the following fiscal policy changes would be the most expansionary? A.a $40 billion increase in government purchases B. a $20 billion tax cut and $20 billion increase in government purchases C. a $40 billion tax cut D. a $10 billion tax cut and $30 billion increase in government purchases

A.a $40 billion increase in government purchases

An increase in the demand for music downloads indicates that more music downloads are A. demanded because music download prices have decreased. B. demanded even if prices of music downloads stay the same. C. demanded because sellers are putting music downloads on sale. D. demanded because sellers are selling more music downloads.

B. demanded even if prices of music downloads stay the same.

In the expenditures approach of national income accounting, C, I, and G include expenditures for A1. the private sector of the economy only. A. domestically-produced goods and services only. B. domestically-produced, as well as imported, goods and services. C. exported goods and services.

B. domestically-produced, as well as imported, goods and services.

If the actual rate of unemployment is above the natural rate of unemployment, then potential GDP is A. equal to the GDP gap. B. greater than actual GDP. C. less than actual GDP. D. equal to actual GDP.

B. greater than actual GDP.

To calculate real GDP A. multiply the quantities of all goods and service produced in an economy in a year by their price in that year and then total the result. B. multiply the quantities of final goods and services produced in an economy in a year by their prices in a base year and then sum the values. C. multiply the quantities and prices of final goods and services produced in an economy in a year by their prices in that year and then sum the values. D. sum the quantities of all final goods and services produced in an economy in a year.

B. multiply the quantities of final goods and services produced in an economy in a year by their prices in a base year and then sum the values.

Real income will rise from one year to the next if nominal income A. rises and the price level rises faster. B. falls faster than the price level. C. falls and the price level falls faster. D. falls and the price level rises.

C. falls and the price level falls faster.

The labels for the axes of the aggregate demand graph should be A. price of a product on the vertical axis and quantity of a product on the horizontal axis. B. quantity of a product on the vertical axis and the price of a product on the horizontal axis. C. real domestic output on the horizontal axis and the price level on the vertical axis. D. real domestic output on the vertical axis and the price level on the horizontal axis.

C. real domestic output on the horizontal axis and the price level on the vertical axis.

Real GDP refers to : A. GDP data that do not reflect changes in both physical output and the price level. B. GDP data that embody changes in the price level but not changes in physical output. C. the value of the domestic output after adjustments have been made for environmental pollution and changes in the distribution of income. D. GDP data that have been adjusted for changes in the price level.

D. GDP data that have been adjusted for changes in the price level.

Which of the following scenarios would be considered an investment according to economists? A. The owner of a fishing company buys fuel to run the boats. B. A fishing company buys a few boats from another fishing company that was shutting down. C. The owner of a fishing company buys Google shares. D. The owner of a fishing company buys new fishing gear.

D. The owner of a fishing company buys new fishing gear.

Cost-push inflation is characterized by a(n) A.decrease in both aggregate supply and aggregate demand. B. increase in aggregate supply and a decrease in aggregate demand. C. increase in aggregate demand and no change in aggregate supply. D. decrease in aggregate supply and no change in aggregate demand.

D. decrease in aggregate supply and no change in aggregate demand.

Specialization implies that an individual should produce the good for which he/she has the _____________ opportunity cost. A. general B. highest C. necessary D. lowest

D. lowest

"Full employment" refers to the situation when there is A. no frictional or structural unemployment. B. a 0% unemployment rate. C. 100% employment of the labor force. D. no cyclical unemployment.

D. no cyclical unemployment.

The GDP price index equals A. gross private domestic investment less the consumption of fixed capital. B. real GDP divided by nominal GDP. C. gross national product less net foreign factor income earned in the United States. D. nominal GDP divided by real GDP.

D. nominal GDP divided by real GDP.

1.Economics is best defined as the study of a. how consumers make purchasing decisions. b.choices made by people faced with scarcity. c.financial decision-making d. inflaction,unemployment, and economic growth.

b.choices made by people faced with scarcity.