FINAL ECON

If the price of gasoline increases from $4 to $4.50, ceteris paribus:

B) people will buy less gasoline

Other factors held constant, as the price of an iPad rises, the:

B) quantity demanded for iPads falls

Which of the following is included in personal consumption expenditures?

B) the purchase of a new TV by a household

The unemployment rate does not explicitly include underemployed and discouraged workers

A) true

When a high-quality counterfeit bill is circulated, the government ultimately loses

A) true

One important reason economists track business investment is that:

B) it is a leading indicator of the business cycle

The reason that the law of demand exists is that:

B) people substitute cheaper products for more expensive products

Which of the following items is NOT a category of personal consumption expenditures?

C) residential housing

The biggest group missing from the reported unemployment rate is:

C) those working part time for economic reasons

The producer price index contains:

D) aggregate measures of price changes, organized by stage of processing

Automatic stabilizers are:

D) components of the federal budget that counter the effects of the business cycle without explicit intervention by the president or Congress

AN increase in the price of tomatoes should cause the supply of ketchup to shift to the right.

B) False

Frictional unemployment occurs when job openings:

B) exist, and people are willing to take them, but it takes some times to bring the two together

Bus tickets are often considered _____ goods because _____.

B) inferior; as income rises, demand for bus tickets falls

In the table, at a price of $5:

A) a shortage of 40 units occurs

If a consumer buys a set of headphones at the same time as she buys an MP3 player, these two products are MOST likely _____ goods

A) complementary

When a recession gets under way:

A) firms start to lay off workers to reduce costs

In the simple circular flow model:

A) income is equal to spending

If an increase in income levels to an increase in the demand for opera tickets, then operas are a ____ good

A) normal

Whenever you construct a demand curve, which statement is TRUE?

A) the price of all other goods must be held constant

A disadvantage of using per capita GDP to measure the standard of living in a country is that it does not accurately reflect the differences in wealth between rich citizens and poor citizens in the same country

A) true

Business cycles are alternating increases and decreases in macroeconomic activity

A) true

Dylan quits his job in Topeka, Kansas, and moves to Austin, Texas, to get involved in live music. He is unemployed for three months while he looks for a new job. Dylan is frictionally unemployed

A) true

Gross private domestic investment is a key factor behind economic growth in the United States

A) true

Suppose the unemployment rate is 10% and an economist breaks the unemployment rate into the following components: frictional (3%) and structural (3%). Based on these estimates, the cyclical inflation rate is:

B) 4%

Casey is a 16-year-old high school student who has no marketable skills. He has been browsing the want-ads in the local newspaper for months but finally got so discouraged that he quit looking for a job. According to the Bureau of Labor Statistics, Casey is unemployed.

B) false

China's GDP per capita would have been higher if not for the deterioration in its enviroment

B) false

Henry sells brownies to his classmates at college for cash. His income from this product is probably NOT part of the informal economy

B) false

People are counted as unemployed if they only held temporary jobs during the survey week

B) false

According to the law of supply, producers will supply more of their products when:

B) the price rises

The associated table provides a hypothetical bundle of goods and their respective prices for three different years.If 2014 is selected as the base year, the cost of the market basket in 2017 would be:

C) $640.50

The associated table provides a hypothetical bundle of goods. If 2014 is selected as the base year, the value of nominal GDP in 2017 would be:

C) 709.75

In general terms, which item is an example of an inferior good?

C) a city bus

When production technology improves, supply increases and the equilibrium:

C) quantity rises and the equilibrium price falls

Based on the unemployment data since 1985 presented in the chapter, which of the following are true?

D) I, II, III only

Which of the following statements is true about the National Activity Index?

D) Negative values mean the economy is growing more slowly than its long-term trend

Which component is the smallest part of U.S. GDP?

D) net exports

When an economy is at full employment, expansionary fiscal policy:

D) produces no long-run improvement in real output

The demand for gasoline is rising. Which of the following statements describes a possible cause?

A) Consumers expect prices to rise in the near future

The main idea behind supply-side economics is that:

A) a decrease in marginal income tax rates would stimulate economic growth

The reason a supply curve is upward sloping is that producing more units makes it more expensive to produce each individual unit

A) true

When marginal income taxes become too high, the incentives for individuals to work harder are diminished

A) true

A sheep ranch produces $30 worth of wool. A suit manufacturer produces $60 worth of suits. A retail outlet sells a suit to a customer for $180. The change in GDP would be:

B) $180

Company DEF produces gizmos. One particular batch cost $50,000 to produce. Because market conditions were bad at the time of sale, they were sold at a loss for $40,000. The value of the gizmos included in the GDP is:

B) $40,000

What approach to federal finance would you agree with if you wanted the federal government to restrict spending or raise taxes during booms and use surpluses from the booms to offset deficits during recessions?

B) cyclically balanced budget

When the supply curve shifts out (to the right) and the demand curve shifts (to the left), the equilibrium price will:

B) decrease

The U.S. median household income in 2013 was about $65,000

B) false

The rental income component in the income approach to calculating GDP included the incomes of real estate agents and brokers

B) false

According to the table, real GDP for 2014 is approximately:

C) 7,552 billion

All of the following types of wages can cause unemployment EXCEPT:

D) equilibrium wages