last minute

GDP is $10 trillion in 2001. The GDP deflator is 100 in 2000 and is 110 in 2001. What is real GDP?

$9.09 trillion

If disposable income increases from $250 to $300 and saving increases from $40 to $50, how much is the marginal propensity to save?

0.2

If the growth rate in an economy is 3.%, then its GDP will double in about

20 years

If the growth rate in an economy is 2%, its GDP will double in about?

35 years

If the marginal propensity to save is 0.2, how much is the spending multiplier?

5

If the actual growth rate of U.S. GDP was 1.25% from the first quarter to the second quarter, the Bureau of Economic Analysis would report the annualized rate as

5%

In Keynesian macroeconomic equilibrium: AE = ? and C = ?

AE = Y and C = I

When you don't make any money but you still spend money it's called?

Autonomous consumption

What is Long run growth rate

Being able to produce more output, with what little we have.

What is BRIC?

Brazil, Russia, India, China

How does the Bureau of Labor Statistics get their information to calculate inflation?

Creating consumer expenditure surveys targeting 87 urban areas for 80,000 goods, monthly.

If the stock market collapses, consumption will:

Decrease because people feel less wealthy

What isi it when the PPF shifts right?

Economic Growth (More output, more employment

The rule of 70 is fairly accurate for small growth rates.

False

Who are affected by inflation?

Fixed income workers, Savers, Creditors

Who benefit from inflation?

Flexible income workers, debtors, cost of living adjustments (COLA)

Government as a pronder for economic growth

Free hands, econmic freedom- leaving choice to you

Economic growth is mostly commonly measured by...

GDP

Jennifer just got news that she is getting a 5% raise. However, the Bureau of Labor Statistics just reported that prices are rising by 7%.

Jennifer is losing purchasing power by 2%.

Government faculator for economic growth

Strong property, enforcements of contracts, stable financial system

What is productivity?

The key driver for income and wages (converting an input to an output).

Autonomous is independent of disposable income.

True

There is an inverse relationship with ROI and investment

True

Unemployment and inflation has to have one high and another low.

True

Factors for consumption

Wealth (Wealth up <>< Consumption up), Future expectations (Good -> C up <>< S down), House hold debt ( if debt goes up, C goes down), Taxes (if taxes goes up, S and C goes down)

What is deflation?

When inflation becomes negative.

Which is true about differences in savings rates across groups of people?

Younger people and higher-income people tend to save less.

Infrastructure is:

a country's public capital.

Investment spending is

based upon the expected rate of return, ROI (never constant, always fluctuating)

The slope of the consumption function is ___.

constant

Suppose three years ago a nation's inflation rate was 8%, two years ago it was 5%, and last year it was 2%. This nation is undergoing...

disinflation

Lexie works Monday to Friday from 4 P.M. to 6 P.M. in the after-school program at a local elementary school. She began looking for a full-time job last week and has already scheduled three job interviews. According to the Bureau of Labor Statistics, Lexie is

employed

Government funding of Los Alamos National Labs is an example of government acting in its role to promote economic growth by:

enhancing physical and human capital.

The government decides to give tax-exempt status to a new organization whose mission is to award college scholarships to members of the armed forces. In doing so, the government is acting in its role to promote economic growth by:

enhancing physical and human capital.

When the government records a deed showing that ownership of a piece of property has passed from one party to another, it is acting in its role to promote economic growth by:

ensuring a stable legal system.

How often is GDP deflation calculated?

every 3 months

Prices remain ___, when we have so much under utalized resources.

fixed

Malthus believed that population increased _____ and food resources increased _______.

geometrically; arithmetically

As a rule, the more capital employed with workers, the ____ their productivity and the _______ their earnings.

higher, higher

Unanticipated _____ is detrimental to economic growth.

inflation or deflation

Simplified economy is ...

just consumers and investors, just personal savings from consumers, assume the prices are fixed.

A legal system that enforces property rights is important to economic growth because:

legal protection of ideas and technologies gives people who innovate the ability to protect their work.

If AE = $6,200 and Y = $5,800, businesses will produce...

more, raising both employment and income.

An example of intangible infrastructure is:

patent laws.

The catch up effect tends to....

slow down over time.

On-the-job training can lead to an increase in...

the capital-to-labor ratio

The biggest group missing from the reported unemployment rate is...

those working part time for economic reasons.

Zach has been laid off from his job as an aircraft worker and is afraid that he will not be recalled. He has been actively looking for a job but has had no luck for the past six weeks according to the Bureau of Labor Statistics, Zach is ...

unemployed

seasonal unemployment

unemployment that occurs as a result of harvest schedules or vacations, or when industries slow or shut down for a season

frictional unemployment

unemployment that occurs when people take time to find a job

The world bank defines extreme poverty as a person living on less than

$1.25 per day

Suppose Robert has a wage contract subject to an escalator clause. He earned $22 an hour last year; in the same year, the consumer price index rose from 120 to 126. What should his new wage be?

$23.10 an hour

If autonomous investment spending falls by $1000 and the marginal propensity to consume is 0.75, the total effect on the economy is a decrease of ____ in income or output.

$4,000

What is your new salary if you earned $40,000 last year, the consumer price index went from 120 to 125, and your salary is adjust by the rate of inflation annually?

$41,666.67

If income is $50,000, consumption is $47,500, saving is $2,500, then the marginal propensity to consume is:

.95

What is real GDP in 2014 if nominal GDP in 2014 is $15,000 billion, the GDP deflator in 2014 is 110, and the GDP deflator in 2010 was 100?

13,636 billion

What is the base year for calculation consumer price index?

1982-1984, because those years didn't fluctuate much.

If an economy's GDP will double in 15 years, then its growth rate must be about

4.7%

Unemployment rates over the past 50 years have tended to hover around...

5% to 6%

Last year the consumer price index (CPI) was 115 and this year's CPI is 125. The rate of inflation is:

8.7%

Approximately how much are labor costs?

About 70%

What is the GDP Deflation or GDP Price index

An automated inlation calculator, that takes into account consumers, government, investors, and net exports, also a broad measure to calculate inflation rates.

Who is in charge of calculation inflation?

Bureau of Labor Statistics

Who is in charge of calculation unemployment?

Bureau of Labor of statistics

What are the four main types of spending?

Consumer, investment, government, and net exports

Induced expenditure is?

Expenditures that changes with the changes of the RGDP (main ones are consumption expenditures and imports)

What are the types of unemployment?

Frictional, Structural, Seasonal, and Cyclical unemployment

Factors of investment spending

Future expectations, excess capacity, operating cost, technical changes

If a country's population increases at a slower rate than growth in its real GDP

Gdp per capita has increased.

Who are not in the laborforce?

Homemakers, Retirees, Full time students, People under the age of 16, Discouraged workers, and Marginally attached workers.

Factors to increase production and economic growth

Increase natural resources, Labor force increase, increase in human capital, capital labor, improvements in technology

What are some sources of long-run growth?

Increases in capital, increases in productivity, and improvements in technology.

To have long-term economic growth, the production function suggest...

Increasing the availability of technology, capital, and labor.

Giving a construction crew more cement rollers is an example of what?

Increasing the capital-to-labor ratio

What causes business cycles?

Investment expenditures (always fluctuate, can be negative)

If someone works a part-time job, how many hours must they work to be considered employed?

It doesn't matter

What is short run growth rate?

Making sure your using the exisisting utilities fully.

What does RGDP per capita growth rate measures?

Measures standard of living in a country.

What is the modern economic growth?

New technology, longer life expectancy, better standard of living

What is an autonmous expenditure

Not based on disposable income, based on how much you get out of it (the main ones are investment expenditure, government expenditure, and exports "from other countries")

Who are discouraged workers?

People who stop looking for work because of the economic situation.

Who are Marginally attached workers?

People who stop looking for work because of their own desires.

The consumer price index does not includes

Property taxes

The paradox of thrift suggests that when households intend to save more, they will ___ consumption, which will ultimately lead to _______ actual aggregate saving.

Reduce; lower

Whats the only way to curve inflation?

Taxes

Increases in ______ often lead to economic growth.

Technology

What is a the key explanation for the high economic growth in the United States in the past century?

Technology improvements

What is the production function?

Tells how the inputs are used to produce the outputs with the current technology. "Important tool to determine if a country is using resources efficiently and how long it would experience long-term economic growth.

What does Producer price index (PPI) measure?

The average changes in prices receive by the domestic producers before the product is sold to the individual businesses.

What is investment

The money spent on capital goods.

How does the Bureau of Labor of statistics gather information to calculate unemployment?

They create population surveys & payroll surveys, monthly

Classical people beleived that interest rate plays a huge role in how much you consume or save.

True

Consumption will grow while Disposable income grows, but not as fast.

True

GDP can be measured as the sum of all spending.

True

What is Non-accelerationg inflation rate?

When inflation and unemployment rate's are low.

What is disinflation?

When inflation is going down throughout time, but is still positive.

What is hyper inflation?

When prices go up 100%

What is a passive job search?

When someone is considered for a position but is not actively searching for a job, usually sought out by recruiters.

When can the standard of living increase?

When the output per worker grows. (increasing productivity)

When the consumption schedule lies above the 45-degree reference line, consumption spending is _____ than income and saving is ______.

greater; negative

Which group of people benefit from an unanticipated rise in inflation rate?

homeowners with fixed-rate mortgages.

If the marginal propensity to consume is 0.8, full-employment output is $14 trillion, and current output is $13.5 trillion, then investment spending must __________ to reach full-employment output.

increase by $0.1 trillion

Labor productivity is a major determinant of....

living standards

Tom is living with his parents. He looks at the help wanted ads but has not replied to any in the past four weeks. Tom is...

not in the labor force

The relationship between economic freedom and per capita GDP is:

positive.

The rule of 70...

provides an exact estimate of compounded values over time.

Infrastructure is defined as a country's:

public capital.

Scott, has a Ph.D. in physics, waits on tables for a living. Scott is categorized as:

underemployed

structural unemployment

unemployment that occurs when workers' skills do not match the jobs that are available

cyclical unemployment

unemployment that rises during economic downturns and falls when the economy improves