Macro Econ 2301 Exam 2
The consumer price index (CPI) measures the changes of the ______
Prices paid by urban consumers for a fixed market basket of consumer goods and services
Gross Domestic Product is equal to the market value of all the final goods and services _______ in a given period of time
Produced within a country
As the price level rises, firms respond in the short run to the change in the real wage rate by _____
increasing production
Which of the following is an example of deflation?
inflation rate increases from -4% to -2%
Investment is defined as the purchase of
new capital goods and additions to inventories
"In may 2016, M1 was $3,239 billion; M2 was $12,731 billion; checkable deposits owned by individuals and businesses were $1,861 billion; small time deposits were $393 billion; and money market funds and other deposits were $706 billion." The currency held by individuals and businesses and traveler's checks in May 2016 was _______; and savings deposits totaled ________.
$1,378 billion; $8,393 billion
If real GDP is $1,000,000 exports are $200,000, imports are $300,000 and aggregate labor hours are 100,000 labor productivity is _____
$10 per hour
The unemployment rate equals
(number of people unemployed/labor force) x 100
The Bureau of Labor Statistics reported that in March 2015, the labor force in Michigan was 4,739,000, and employment was 4,467,000. What's the unemployment rate ?
5.7%
If the price index last year was 100 and today it is 167, what is the inflation rate over this period?
67 percent
A discouraged worker is
A person who gave up hope on finding a job and stopped searching
The GDP per capita is
An index used to measure a country standard of living
The discount rate is
An interest rate that's lower than the general interest rate offered to commercial banks by the fed
The expenditure approach to measuring GDP is done by using data on only
Consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services
Which of the following statements about the Fed Reserve Bank is false?
It is part of the federal government
Which of the following is the correct sequence of events when the Fed decides to increase the discount rate?
Money supply decreases ----> interest rate increases -----> Consumption & Investment decrease -----> AD shifts left -----> price level and production fall.
The labor force is the ______
Number of employed people plus the number of unemployed people
According to the new growth theory,
Our unlimited wants will lead us to ever greater productivity and perpetual economic growth
Consider potential GDP and then choose the statement that is correct
The potential GDP line is vertical because potential GDP is independent of the price level.
The fed's policy tools include _____
The required reserve ratio, discount rate, and open market operations
Full employment means that ____
There is no cyclical unemployment
As people use mobile wallets to make purchases, most of M1 will be _____
checkable deposits
In the United States today, money includes ______
coins in parking meters and the funds in a student's checking account
When the fed buys more and more bonds at the open market, the interest rate _____, and the people's quantity of money demanded _____
decreases; increases
When the fed sells securities in the open market, the monetary base ______ and the interest rate ______.
decreases; rises
If the interest rate goes up, ceteris paribus, the price level will _____
fall
The least problematic type of unemployment for society and government is the _____ unemployment
frictional
The economic growth rate is the annual percentage change of ______
real GDP
Which of the following are included in the income approach to measuring GDP
rent; wages; interest; profits
The inflation rate is the ____
the percentage change in the price level from one year to the next