Macro Midterm #2

GDP = $100; taxes = $17; government purchases = $15; national saving = $5. For this economy, private saving amounts to... a. $3. b. $95. c. $5. d. $10.

a. $3.

Institutions that help to match one person's saving with another person's investment are collectively called the... a. financial system. b. banking system. c. Federal Reserve system. d. monetary system.

a. financial system.

The source of the supply of loanable funds... a. is saving and the source of demand for loanable funds is investment. b. and the demand for loanable funds is saving. c. is investment and the source of demand for loanable funds is saving. d. and the demand for loanable funds is investment.

a. is saving and the source of demand for loanable funds is investment.

Which of the following is a part of your economics professor's human capital? a. the things she learned at some prestigious university b. her copy of Mankiw's text c. her chalk holder d. All of the above are correct.

a. the things she learned at some prestigious university

GDP = $100; taxes = $17; government purchases = $15; national saving = $5. For this economy, investment amounts to... a. $12. b. $5. c. $7. d. $20.

b. $5.

A closed economy... a. does not engage in international trade of goods and services. b. does not engage in international borrowing or lending. c. both A and B d. engages in international borrowing and lending.

c. both A and B

GDP = $100; taxes = $17; government purchases = $15; national saving = $5. For this economy, consumption amounts to... a. $120. b. $20. c. $70. d. $80.

d. $80.

If the nominal interest rate is 7 percent and the rate of inflation is 3 percent, then the real interest rate is... a. 10 percent. b. 3 percent. c. 7 percent. d. 4 percent.

d. 4 percent.

The Eye of Horus incense company has $10 million in cash which it has accumulated from retained earnings. It was planning to use the money to build a new factory. Recently, the rate of interest has increased. The increase in the rate of interest should... a. make it more likely that The Eye of Horus will build the factory because a higher interest rate will make the factory more valuable. b. not influence the decision to build the factory because The Eye of Horus doesn't have to borrow any money. c. not influence the decision to build the factory because its stockholders are expecting a new factory. d. make it less likely that The Eye of Horus will build the factory because the opportunity cost of the $10 million is now higher.

d. make it less likely that The Eye of Horus will build the factory because the opportunity cost of the $10 million is now higher.

In a market economy, scarcity of resources is most clearly reflected in... a. supply. b. demand. c. the stock of the resource. d. market prices.

d. market prices.

The amount of unemployment that an economy normally experiences is called the... a. natural rate of unemployment. b. cyclical rate of unemployment. c. average rate of unemployment. d. typical rate of unemployment.

a. natural rate of unemployment

In June 2009 the Bureau of Labor Statistics reported an adult population of 234.9 million, a labor force of 154 million and employment of 141.6 million. Based on these numbers the unemployment rate was... a. 12.4/154. b. 93.3/154. c. 93.3/234.9. d. 12.4/234.9.

a. 12.4/154.

Suppose that the Bureau of Labor Statistics reports that the entire adult population of Dullardia can be categorized as follows: 9 million people employed, 1 million people unemployed, and 10 million people who are either students, homemakers, retirees, or other people not seeking employment. What is the labor-force participation rate? a. 50% b. 10% c. 5% d. 45%

a. 50%

The steps involved in calculating the consumer price index and the inflation rate, in order, are as follows: a. Fix the basket, find the prices, compute the basket's cost, choose a base year and compute the index, and compute the inflation rate. b. Choose a base year, update the basket, find the prices, estimate the basket's cost, compute the index, and compute the inflation rate. c. Choose a base year, fix the basket, find the prices, compute the inflation rate, compute the basket's cost, and compute the index. d. Fix the basket, find the prices, compute the inflation rate, compute the basket's cost, and choose a base year and compute the index.

a. Fix the basket, find the prices, compute the basket's cost, choose a base year and compute the index, and compute the inflation rate.

Meredith is looking for work as a computer programmer. Although her prospects are good, she has not yet taken a job. Julie is looking for work in a steel mill. Every time she shows up for an interview, there are more people looking for work than there are openings. Someone waiting in line with her tells her it has been that way for a long time. a. Meredith is frictionally unemployed, and Julie is structurally unemployed. b. Meredith is structurally unemployed, and Julie is frictionally unemployed. c. Meredith and Julie are both structurally unemployed. d. Meredith and Julie are both frictionally unemployed.

a. Meredith is frictionally unemployed, and Julie is structurally unemployed.

Who of the following would be included in the Bureau of Labor Statistics' "unemployed" category? a. Miguel, who is on temporary layoff b. Reta, who worked only 15 hours last week c. Marisa, who neither has a job nor is looking for one d. None of the above is correct.

a. Miguel, who is on temporary layoff

Esmerelda worked part-time for her mother's business without pay. Tabitha was absent from work because she had strep throat. Who is counted as "employed" by the Bureau of Labor Statistics? a. both Esmerelda and Tabitha b. Tabitha but not Esmerelda c. neither Esmerelda nor Tabitha d. Esmerelda but not Tabitha

a. both Esmerelda and Tabitha

In the calculation of the CPI, tea is given greater weight than beer if... a. consumers buy more tea than beer. b. the price of tea is higher than the price of beer. c. tea is more readily available than beer to the typical consumer. d. it costs more to produce tea than it costs to produce beer.

a. consumers buy more tea than beer.

Suppose that in some country the price of silver increased from $30 per ounce to $31 per ounce during a time when the overall price level increased by 5 percent. During this period, the real price of silver... a. decreased. b. stayed the same. c. might have increased, decreased or stayed the same; more information is needed to be sure. d. increased.

a. decreased.

A country's human capital increases... a. if its workers become better educated or healthier. b. only if its workers become better educated. c. only if its workers become healthier. d. None of the above is correct.

a. if its workers become better educated or healthier.

Efficiency wages... a. increase productivity but increase unemployment. b. decrease productivity and increase unemployment. c. decrease productivity but reduce unemployment. d. increase productivity and reduce unemployment.

a. increase productivity but increase unemployment.

Proprietary technology is knowledge that is... a. known only by the company that discovered it. b. known, but only recently discovered. c. known mostly by only those in a certain profession. d. known but no longer used much.

a. known only by the company that discovered it.

The labor force equals the... a. number of people employed plus the number of people unemployed. b. number of people employed plus the number of people unemployed plus teenagers between ages 14 and 16 who work at least 10 hours a week. c. number of people employed. d. adult population.

a. number of people employed plus the number of people unemployed.

Over the last ten years productivity grew faster in Mapoli than in Romeria while the population and total hours worked remained the same in both countries. It follows that... a. real GDP per person grew faster in Mapoli than in Romeria. b. real GDP per person must be higher in Mapoli than in Romeria. c. the standard of living must be higher in Mapoli than in Romeria. d. All of the above are correct.

a. real GDP per person grew faster in Mapoli than in Romeria.

If the supply for loanable funds shifts to the left, then the equilibrium interest rate... a. rises and the quantity of loanable funds falls. b. and quantity of loanable funds rises. c. and quantity of loanable funds falls. d. falls and the quantity of loanable funds rises.

a. rises and the quantity of loanable funds falls.

Other things the same, a higher interest rate induces people to... a. save more, so the supply of loanable funds slopes upward. b. invest less, so the supply of loanable funds slopes downward. c. save less, so the supply of loanable funds slopes downward. d. invest more, so the supply of loanable funds slopes upward.

a. save more, so the supply of loanable funds slopes upward.

Nastech Pharmaceuticals announced it has developed a nasal spray that would reduce hunger cravings. Other things the same we would expect... a. the demand for existing shares of stock in this company to increase, so the price would rise. b. the demand for existing shares of stock in this company to decrease, so the price would fall. c. the supply of existing shares of stock in this company to decrease, so the price would fall. d. the supply of existing shares of stock in this company to increase, so the price would rise.

a. the demand for existing shares of stock in this company to increase, so the price would rise.

Suppose the market for loanable funds is in equilibrium. What would happen in the market for loanable funds, other things the same, if the Congress and President increased the maximum contribution limits to 401(k) and 403(b) tax-deferred retirement accounts? a. the interest rate would decrease and the quantity of loanable funds would increase. b. the interest rate and quantity of loanable funds would decrease. c. the interest rate and quantity of loanable funds would increase d. the interest rate would increase and the quantity of loanable funds would decrease.

a. the interest rate would decrease and the quantity of loanable funds would increase.

If an inexpensive alternative to oil were found, the price of oil adjusted for inflation... a. would decline as the alternative would reduce the demand for oil. b. would decline as the alternative would reduce the supply of oil. c. would increase as the alternative would increase the supply of oil. d. would increase as the alternative would increase the demand for oil.

a. would decline as the alternative would reduce the demand for oil.

Karena was laid off, but she is expecting to be recalled. She has not looked for work since being laid off. Nathan is not employed, nor was he laid off. Who is counted as "unemployed" in the U.S. labor force statistics? a. 1) not Karena but 2) Nathan, if Nathan has looked for work during the previous four weeks b. 1) Karena and 2) Nathan, if Nathan has looked for work during the previous four weeks c. 1) Karena and 2) Nathan, even if Nathan has not looked for work during the previous four weeks d. 1) not Karena but 2) Nathan, even if Nathan has not looked for work during the previous four weeks

b. 1) Karena and 2) Nathan, if Nathan has looked for work during the previous four weeks

Suppose that the Bureau of Labor Statistics reports that the entire adult population of Dullardia can be categorized as follows: 9 million people employed, 1 million people unemployed, and 10 million people who are either students, homemakers, retirees, or other people not seeking employment. What is the total labor force? a. 9 million b. 10 million c. 1 million d. 20 million

b. 10 million

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $55. The value of the CPI in 2016 was... a. 104.0. b. 110.0. c. 90.9. d. 105.0.

b. 110.0.

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $77; in 2013, the basket's cost was $82; and in 2014, the basket's cost was $90. The value of the CPI in 2014 was... a. 109.8 and the inflation rate was 9.8%. b. 116.9 and the inflation rate was 9.8%. c. 116.9 and the inflation rate was 16.9%. d. 109.8 and the inflation rate was 16.9%.

b. 116.9 and the inflation rate was 9.8%.

If the consumer price index was 96 in 2012, 100 in 2013, and 102 in 2014, then the base year must be... a. 2012. b. 2013. c. 2014. d. The base year cannot be determined from the given information.

b. 2013.

Suppose that the Bureau of Labor Statistics reports that the entire adult population of Dullardia can be categorized as follows: 9 million people employed, 1 million people unemployed, and 10 million people who are either students, homemakers, retirees, or other people not seeking employment. How many people are unemployed? a. 4 million b. 3 million c. 1 million d. 5 million

b. 3 million

Which of the following is correct? a. Although levels of real GDP per person vary substantially from country to country, the growth rate of real GDP per person is similar across countries. b. The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress. c. Productivity may be measured by the growth rate of real GDP per person. d. Productivity is not closely linked to government policies.

b. The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress.

Minimum-wage laws can keep wages... a. above equilibrium and cause a shortage of labor. b. above equilibrium and cause a surplus of labor. c. below equilibrium and cause a surplus of labor. d. below equilibrium and cause a shortage of labor.

b. above equilibrium and cause a surplus of labor.

Technological knowledge refers to... a. human capital. b. available information on how to produce things. c. resources expended transmitting society's understanding to the labor force. d. All of the above are technological knowledge.

b. available information on how to produce things.

If the Apple corporation sells a bond it is... a. borrowing indirectly from the public. b. borrowing directly from the public. c. selling shares of ownership indirectly to the public. d. selling shares of ownership directly to the public.

b. borrowing directly from the public.

The consumer price index is used to... a. monitor changes in the level of real GDP over time. b. monitor changes in the cost of living over time. c. monitor changes in the stock market. d. monitor changes in the level of wholesale prices in the economy.

b. monitor changes in the cost of living over time.

Which of the following is an example of a nonrenewable resource? a. corn b. oil c. livestock d. All of the above are correct.

b. oil

Amy is working part-time. Tavaris is on temporary layoff. Who is included in the Bureau of Labor Statistics' "employed" category? a. both Amy and Tavaris b. only Amy c. only Tavaris d. neither Amy nor Tavaris

b. only Amy

When a union raises the wage above the equilibrium level, it... a. raises both the quantity of labor supplied and the quantity of labor demanded. b. raises the quantity of labor supplied and reduces the quantity of labor demanded. c. reduces both the quantity of labor supplied and the quantity of labor demanded. d. reduces the quantity of labor supplied and raises the quantity of labor demanded.

b. raises the quantity of labor supplied and reduces the quantity of labor demanded.

Unemployment insurance... a. increases search effort which decreases unemployment. b. reduces search effort which raises unemployment. c. increases search effort which raises unemployment. d. reduces search effort which lowers unemployment.

b. reduces search effort which raises unemployment.

Given that Monika's income exceeds her expenditures, Monika is best described as a... a. borrower or as a demander of funds. b. saver or as a supplier of funds. c. borrower or as a supplier of funds. d. saver or as a demander of funds.

b. saver or as a supplier of funds.

People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equilibrium are best classified as... a. discouraged workers. b. structurally unemployed. c. cyclically unemployed. d. frictionally unemployed.

b. structurally unemployed.

Minimum wages create unemployment in markets where they create a... a. surplus of labor. Unemployment of this type is called frictional. b. surplus of labor. Unemployment of this type is called structural. c. shortage of labor. Unemployment of this type is called frictional. d. shortage of labor. Unemployment of this type is called structural.

b. surplus of labor. Unemployment of this type is called structural.

The economy's two most important financial markets are... a. financial markets and financial institutions. b. the bond market and the stock market. c. banks and the stock market. d. the investment market and the saving market.

b. the bond market and the stock market.

Economists use the term inflation to describe a situation in which... a. some prices are rising faster than others. b. the economy's overall price level is rising. c. the economy's overall price level is high, but not necessarily rising. d. the economy's overall output of goods and services is rising faster than the economy's overall price level.

b. the economy's overall price level is rising

To maintain their standard of living, most people rely on... a. government assistance. b. their labor earnings. c. their personal savings. d. rental income.

b. their labor earnings

The market basket used to calculate the CPI in Dullardtopia is 10 cupcakes and 3 lbs of tea. In 2019, cupcakes cost $2 each and tea cost $5/ lb. What is the cost of a market basket in 2019? a. $20 b. $7 c. $35 d. $45

c. $35

In the U.S., each additional year of schooling has historically raised a person's wage on average by about... a. 15 percent. b. 5 percent. c. 10 percent. d. 2 percent.

c. 10 percent.

Suppose that the Bureau of Labor Statistics reports that the entire adult population of Dullardia can be categorized as follows: 9 million people employed, 1 million people unemployed, and 10 million people who are either students, homemakers, retirees, or other people not seeking employment. What is the unemployment rate? a. 11.7% b. 45% c. 10% d. 5%

c. 10%

In 2015 the Japanese adult non-institutionalized population was 110.7 million, the labor force was 66 million, and the number of people employed was 63.7 million. According to these numbers, the Japanese labor-force participation rate and unemployment rate were about... a. 59.6% and 2.1% b. 57.5% and 3.5% c. 59.6% and 3.5% d. 57.5% and 2.1%

c. 59.6% and 3.5%

Bob is looking for work after school, but everywhere he fills out an application, the managers say they always have a lot more applications than open positions. Tom has a law degree. Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use. a. Bob and Tom are both frictionally unemployed. b. Bob and Tom are both structurally unemployed. c. Bob is structurally unemployed, and Tom is frictionally unemployed. d. Bob is frictionally unemployed, and Tom is structurally unemployed.

c. Bob is structurally unemployed, and Tom is frictionally unemployed.

You observe a closed economy that has a government deficit and positive investment. Which of the following is correct? a. Private saving is negative; public saving is positive. b. Both private saving and public saving are negative. c. Private saving is positive; public saving is negative. d. Private and public saving are both positive.

c. Private saving is positive; public saving is negative.

Who is included in the labor force by the Bureau of Labor Statistics? a. Dia, an unpaid homemaker not looking for other work b. Kevin, a full-time student not looking for work c. Sarah, who does not have a job but is looking for work d. None of the above is correct.

c. Sarah, who does not have a job but is looking for work

In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010. A bottle of cologne cost $30 in 2009 and $40 in 2010. Using 2009 as the base year, which of the following statements is correct? a. For the typical consumer, the number of dollars spent on razors is equal to the number of dollars spent on cologne in each of the two years. b. The consumer price index is 310 in 2010. c. The rate of inflation is 29.17% in 2010. d. None of the above is correct

c. The rate of inflation is 29.17% in 2010.

According to 2014 data on the U.S. population, which of the following groups of adults of prime working age (ages 25-54) had the highest unemployment rate? a. black females b. white females c. black males d. white males

c. black males

Norberto is opening a bicycle shop, and his monthly expenditures to get the shop up and running exceed his monthly income. Norberto is best described as a... a. saver or as a demander of funds. b. borrower or as a supplier of funds. c. borrower or as a demander of funds. d. saver or as a supplier of funds.

c. borrower or as a demander of funds.

When opening a print shop you need to buy printers, computers, furniture, and similar items. Economists call these expenditures... a. investment in human capital. b. personal saving. c. capital investment. d. business consumption expenditures.

c. capital investment.

The unemployment rate is computed as the number of unemployed... a. divided by the adult population, all times 100. b. divided by the number of employed, all times 100. c. divided by the labor force, all times 100. d. times the labor-force participation rate, all times 100.

c. divided by the labor force, all times 100.

To be counted as "employed" in the U.S. labor force statistics, a person... a. does not have to be working for pay if they are working for a family business but must be employed full time. b. must be working for pay but does not have to be working full time. c. does not have to be working for pay if they are working for a family business and does not have to be working full time d. must be working for pay and be working full time.

c. does not have to be working for pay if they are working for a family business and does not have to be working full time

Productivity... a. explains very little of the differences in the standard of living across countries. b. is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries. c. explains most of the differences in the standard of living across countries. d. explains some, but not most of the differences in the standard of living across countries.

c. explains most of the differences in the standard of living across countries.

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in... a. foreign indirect investment. b. foreign direct investment. c. foreign portfolio investment. d. indirect domestic investment.

c. foreign portfolio investment.

A government budget deficit affects the supply of loanable funds, rather than the demand for loanable funds, because... a. in our model of the loanable funds market, we define "loanable funds" as the flow of resources available from private saving. b. of our assumption that the economy is closed. c. in our model of the loanable funds market, we define "loanable funds" as the flow of resources available to fund private investment. d. markets for government debt are fundamentally different from markets for private debt.

c. in our model of the loanable funds market, we define "loanable funds" as the flow of resources available to fund private investment.

The catch-up effect refers to the idea that... a. if investment spending is low, increased saving will help investment to "catch-up." b. population eventually catches-up with increased output. c. it is easier for a country to grow fast and so catch-up if it starts out relatively poor. d. saving will always catch-up with investment spending.

c. it is easier for a country to grow fast and so catch-up if it starts out relatively poor.

Frictional unemployment results from... a. a surplus in the some labor markets. It is often thought to explain relatively short spells of unemployment. b. job searching. It is often thought to explain relatively long spells of unemployment c. job searching. It is often thought to explain relatively short spells of unemployment. d. a surplus in some labor markets. It is often thought to explain relatively long spells of unemployment.

c. job searching. It is often thought to explain relatively short spells of unemployment.

Human capital is the... a. total number of hours worked in an economy. b. stock of equipment and structures that is used to produce goods and services. c. knowledge and skills that workers acquire through education, training, and experience. d. same thing as technological knowledge.

c. knowledge and skills that workers acquire through education, training, and experience.

When a country saves a larger portion of its GDP than it did before, it will have... a. less capital and lower productivity. b. more capital and lower productivity. c. more capital and higher productivity. d. less capital and higher productivity.

c. more capital and higher productivity.

In the Shark Tank clip we watched in class, PolarPro gained funds for capital investment by... a. buying stocks. b. selling bonds. c. selling stocks. d. buying bonds.

c. selling stocks.

A nation's standard of living is determined by.. a. factors and events that are beyond the nation's control. b. the quantity of natural resources with which it is endowed. c. the productivity of its workers. d. the percentage of its GDP that is accounted for by government purchases.

c. the productivity of its workers.

​Derrick loses his job, but does not look for work. Which of the following are consequences of this change in Derrick's status? a. unemployment and the labor force are unchanged b. unemployment rises and the labor force is unchanged c. unemployment is unchanged and the labor force falls d. unemployment rises and the labor force falls

c. unemployment is unchanged and the labor force falls

Over the past century in the United States, real GDP per person has grown, on average, by about... a. 5 percent per year. b. 3 percent per year. c. 1 percent per year. d. 2 percent per year.

d. 2 percent per year.

Caroline is the owner of a hair-styling salon and spa. She decides to raise the wages of her workers even though she faces an excess supply of labor. Her decision... a. might increase profits if it attracts a better pool of workers to apply for jobs at her salon. b. will increase the excess supply of labor. c. may increase the quality of her work force. d. All of the above are correct.

d. All of the above are correct.

In a closed economy, national saving equals... a. investment. b. income minus the sum of consumption and government purchases. c. private saving plus public saving. d. All of the above are correct.

d. All of the above are correct.

Investment from abroad... a. is a way for poor countries to learn the state-of-the-art technologies developed and used in richer countries. b. is viewed by economists as a way to increase growth. c. often requires removing restrictions that governments have imposed on foreign ownership of domestic capital. d. All of the above are correct.

d. All of the above are correct.

Job search... a. is one reason economies always experience some unemployment. b. is the process of matching workers with appropriate jobs. c. would not be a problem if all workers and all jobs were the same. d. All of the above are correct.

d. All of the above are correct.

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been chosen as the base year. In 2012, the basket's cost was $80.00; in 2013, the basket's cost was $84; and in 2014, the basket's cost was $87.60. The value of the CPI was... a. 100 in 2012. b. 105 in 2013. c. 109.5 in 2014. d. All of the above are correct.

d. All of the above are correct.

Which of the following is correct? a. Once adjustment is made for inflation, the prices of most natural resources have been about steady or falling. b. Technological progress has allowed us to substitute renewable resources for some nonrenewable resources. c. Technological progress has made once-crucial natural resources less necessary. d. All of the above are correct.

d. All of the above are correct.

Which of the following would increase productivity? a. an increase in the physical capital stock per worker b. an increase in human capital per worker c. an increase in natural resources per worker d. All of the above are correct.

d. All of the above are correct.

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries? a. housing b. healthcare c. life expectancy d. All of the above.

d. All of the above.

Which famous company executive introduced an innovative pay system that is consistent with the theory of efficiency wages? a. Lee Iococca b. Mark Zuckerberg c. Steve Jobs d. Henry Ford

d. Henry Ford

Kroger's grocery chain wants to finance the purchase of a new warehouse. It decides to sell bonds. a. This represents an increase in the supply of loanable funds. b. This represents a decrease in the demand for loanable funds. c. This represents a decrease in the supply of loanable funds. d. This represents an increase in the demand for loanable funds.

d. This represents an increase in the demand for loanable funds.

Which of the following equations will always represent GDP in an open economy? a. I = Y - C + G b. S = I - G c. Y = C + I + G d. Y = C + I + G + NX

d. Y = C + I + G + NX

If the demand for loanable funds shifts to the right, then the equilibrium interest rate... a. falls and the quantity of loanable funds rises. b. and quantity of loanable funds falls. c. rises and the quantity of loanable funds falls. d. and quantity of loanable funds rises.

d. and quantity of loanable funds rises.

If companies from foreign countries build and operate factories in China, then China's productivity... a. and the wages of Chinese workers decrease. b. increases but the wages of Chinese workers decrease. c. decreases but the wages of Chinese workers increase. d. and the wages of Chinese workers increase.

d. and the wages of Chinese workers increase.

GDP = $100; taxes = $17; government purchases = $15; national saving = $5. This economy's government is running a... a. budget deficit of $2. b. budget deficit of $32. c. budget surplus of $32. d. budget surplus of $2.

d. budget surplus of $2.

The fact that borrowers sometimes default on their loans by declaring bankruptcy is directly related to the characteristic of a bond called... a. interest risk. b. term risk. c. private risk. d. credit risk.

d. credit risk.

The deviation of unemployment from its natural rate is called... a. structural unemployment. b. frictional unemployment. c. the economic rate of unemployment. d. cyclical unemployment.

d. cyclical unemployment.

When the consumer price index rises, the typical family... a. can offset the effects of rising prices by saving more. b. finds that its standard of living is not affected. c. can spend fewer dollars to maintain the same standard of living. d. has to spend more dollars to maintain the same standard of living.

d. has to spend more dollars to maintain the same standard of living.

When public saving falls by $2b and private saving falls by $1b in a closed economy, a. investment falls by $2b. b. investment increases by $1b. c. investment falls by $1b. d. investment falls by $3b.

d. investment falls by $3b.

In a closed economy, what remains after paying for consumption and government purchases is... a. national disposable income. b. public saving. c. private saving. d. national saving.

d. national saving.

The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called... a. technological knowledge. b. human capital. c. physical capital. d. natural resources.

d. natural resources.

Noah is an unpaid stay-at-home father who is not currently searching for paid work. Pete is a full-time student who is not looking for a job. Who is included in the labor force by the Bureau of Labor Statistics? a. only Pete b. both Noah and Pete c. only Noah d. neither Noah nor Pete

d. neither Noah nor Pete

If a country's saving rate increases, then in the long run... a. real GDP per person is higher but productivity is not higher. b. productivity is higher but real GDP per person is not higher. c. neither productivity nor real GDP per person is higher. d. productivity and real GDP per person are both higher.

d. productivity and real GDP per person are both higher.

Unions contribute to... a. seasonal unemployment. b. cyclical unemployment. c. frictional unemployment. d. structural unemployment.

d. structural unemployment.

Which of the following is an example of physical capital? a. the strength of workers b. on the job training c. financial assets like cash and bonds d. the equipment in a factory

d. the equipment in a factory

If the government institutes policies that diminish incentives to save, then in the loanable funds market... a. the demand for loanable funds shifts leftward. b. the demand for loanable funds shifts rightward. c. the supply of loanable funds shifts rightward. d. the supply of loanable funds shifts leftward.

d. the supply of loanable funds shifts leftward.

Rob wants to create a personal trainer program service and needs to pay for equipment and gym space. He can finance this capital investment by... a. ​borrowing money from a friend. b. selling shares of future profits. c. ​using his own savings. d. ​All of the above.

d. ​All of the above.