Macro Final Exam

Last year in Canadamica consumption expenditure was 20 billion, interest, rent, and profit were 2.5 billion, government expenditure on goods and services 7 billion net exports of goods and services was 5 billion and investment was 2 billion hence total expenditure was

34 billion

Real gdp measures the value of goods and services produced in a given year valued using

Base year prices

Total expenditure equal total income

Because firms pay out everything they receive as income to the factors of production

Total income in a country in 2010 is 780 billion. Total expenditure in the country

Is 780 billion

Cyclical unemployment occurs when

A downturn in economic activity decreases employment

If the aggregate demand curve and the aggregate supply curve intersect at a level of real gdp less than potential gdp there is

A recessionary gap

To measure gdp by using the income approach we must add all incomes and then ________ depreciation and _________ net taxes less subsidies

Add; add

If the aggregate demand curve and the aggregate supply curve intersect at a level of real gdp more than potential gdp there is

An inflationary gap

If the economy is above full employment there is ________ gap and as the economy adjusts toward full employment the price level ______

An inflationary; rises

A restaurant buys fish to offer as a daily menu special. The purchase of the fish by the restaurant is

An intermediate good

Consumption expenditure includes spending

By households

An example of cyclical unemployed individual is

Chalres, who lost his job as real estate salesperson when the housing market went soft

Which of the following is included in Germany's GDP

China produced by the English owned wedge wood company at a factory in Berlin, Germany

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 represents the relationship between disposable income (di) consumption (c) and saving (s)

Di=c+s

The rate of unemployment is found by

Dividing the number unemployed by the number of people in the labor force

The purchase of a new Boeing fighter jet by Israel is classified in the us gdp accounts as

Export expenditure

Net exports of goods and services is equal to the value of

Exports minus the value of imports

The faster economic growth is the

Farther the production possibilities curve shifts out

To calculate GDP it is necessary to add up the market value of all the ___________ produced within a country during a year

Final goods and services produced

Investment is the expenditure done by

Firms

The following are all final goods except

Flour used by the baker to make cup cakes

In one year a firm increases its production by 9 million and increases its sales by 8 million. All other things in the economy remaining the same which of the following is true

Gdp increases by 9 million and inventory investment increase 1 million

The expenditure approach values _____ and the income approach values _________

Goods and services at market prices; goods and services at factor prices

As measured gdp omits which of the following

Illegal sales of goods and services changes in the amount of leisure time household production of goods and services

The category of rent in the income approach to gdp

Includes the money paid to use land and other rented inputs

After calculating net domestic product at factor cost to calculate gdp using the income approach in part we must add

Indirect taxes and depreciation

Bobs funky t-shirts began the year with 1000 shirts in inventory produced 10000 shirts during the year and ended the year with 1100 shirts in inventory. The 100 shirts added to his inventory will be classified as

Investment

The fraction of a change in real disposable income that is spent is referred to as the

Mpc

Which of the following is true

Mpc + MPs = 1

Which of the following expenditure components of gdp can be negative or positive

Net exports of goods and services

When calculating gdp purchases of used goods are

Not included

If you buy a five year old tv from a friend the amount you paid for the tv is

Not included in this years gdp

If you make dinner for yourself

Only the market value of ingredients that you purchased this year is added to gdp

The consumption function relates

Planned household consumption to real disposable income

GDP is equal to the market value of all final goods and services ____________ in a given period of times

Produced within a country

Which formula is correct

S=yd - c

The terms saving and savings differ in that

Savings are a stock and saving is a flow

A lifeguard who is out of work in the winter is

Seasonally unemployed

If an outdoor vendor loses her job when winter weather comes this individual is

Seasonally unemployed

Economic growth will

Shift the production possibilities curve outward

When measuring gdp by the income approach wage income includes

Social security contributes made by the firm, wages paid during a workers vacation time

In 2009 in the United States consumption expenditure was 9996 billion investment was 1559 billion, government expenditures on goods and services were 2927 billion and total exports were 1492 billion gdp equaled

Some amount but there is not enough information given calculate gdp

Fictional unemployment will always exist since

Some workers will always want to make a job transition

Collin has lost his job with a telemarketing company which has moved its operation to India. Collin is considered

Structurally unemployed

If a person loses her job because her abilities and skills are poor match with current requirements of employers this person is considered

Structurally unemployed

Depreciation is

The decrease in the value of capital resulting from its use and obsolescence

Which of the following would not be directly included in the us gdp in 2010

The market value of the jet fuel bought by delta to use for flights in 2010

Costs of unemployment include

The output lost due to the fact that the economy is not running at full employment

Which of the following is included in U.S GDP

The rental value homes owned by US citizens tickets sold by U2 for concerts held in the United States

The total civilian labor force is comprised of

The unemployed and the employed

Last year us net exports of goods and services was negative. This fact means that last year

The value of u.s exports was less than the value of us imports

In order to measure gross domestic product we can follow

Two approaches, the expenditure approach and the income approach

Production by Honda a Japanese firm in the United States is included in ________ gdp and the production by NIke corporation a us firm in Vietnam is included in _______ gdp

US/ Vietnamese

To calculate GDP it is necessary to

Use the market price to place a dollar value on each good produced

Nominal gdp is gdp

Using current market values

The income approach to measuring gdp is based on summing

Wages, interest, rent, and profits

Which of the following is classified as a final good or service

Your purchase of online access to the Wall Street journal

What does GDP measure

value of final goods and services