Macroeconomics #2
Current CPI
238
The Great Depression of the 1930s resulted in a decline in real GDP of about:
30 percent
If the natural rate of unemployment is 4.5 percent and the actual unemployment rate is 6.5 percent, then Okun's law indicates that the GDP gap is:
4 percent
The full-employment unemployment rate for the United States economy is now generally considered to be:
4 to 5 percent of the labor force
Current Unemployment Rate
5.1%
Personal Income (PI) -Personal Taxes =Disposable Income (DI)
DI
Inflation caused by an increase in aggregate spending is referred to as:
Demand-pull inflation
Net exports are:
Exports less imports
A peak in the business cycle:
Is a temporary maximum point
GDP excludes:
the market value of unpaid work in the home
The recurrent ups and downs in the level of economic activity extending over several years are a description of:
A business cycle
Current Value of GDP
$18 Trillion
Answer the next question(s) on the basis of the following data. All figures are in billions of dollars. Personal taxes $40 Social Security Contributions 15 Taxes on Production and Imports 20 Corporate Income Taxes 40 Transfer Payments 22 US Exports 24 Undistributed Corporate Profits 35 Government Purchases 90 Gross Private Domestic Investment 75 US Imports 22 Personal Consumption Expenditures 250 Consumption of Fixed Capital 25 Net Foreign Factor 10 Statistical Discrepancy 0 Refer to the above data. DI is:
$274
Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker. The completed speaker sells for $70. The value added by the manufacturer for each speaker is:
$30
Answer the next question(s) on the basis of the following data. All figures are in billions of dollars. Personal taxes $40 Social Security Contributions 15 Taxes on Production and Imports 20 Corporate Income Taxes 40 Transfer Payments 22 US Exports 24 Undistributed Corporate Profits 35 Government Purchases 90 Gross Private Domestic Investment 75 US Imports 22 Personal Consumption Expenditures 250 Consumption of Fixed Capital 25 Net Foreign Factor 10 Statistical Discrepancy 0 Refer to the above data. PI is:
$314
Answer the next question(s) on the basis of the following data. All figures are in billions of dollars. Personal taxes $40 Social Security Contributions 15 Taxes on Production and Imports 20 Corporate Income Taxes 40 Transfer Payments 22 US Exports 24 Undistributed Corporate Profits 35 Government Purchases 90 Gross Private Domestic Investment 75 US Imports 22 Personal Consumption Expenditures 250 Consumption of Fixed Capital 25 Net Foreign Factor 10 Statistical Discrepancy 0 Refer to the above data. NDP is:
$392
Answer the next question(s) on the basis of the following data. All figures are in billions of dollars. Personal taxes $40 Social Security Contributions 15 Taxes on Production and Imports 20 Corporate Income Taxes 40 Transfer Payments 22 US Exports 24 Undistributed Corporate Profits 35 Government Purchases 90 Gross Private Domestic Investment 75 US Imports 22 Personal Consumption Expenditures 250 Consumption of Fixed Capital 25 Net Foreign Factor 10 Statistical Discrepancy 0 Refer to the above data. NI is:
$402
Answer the next question(s) on the basis of the following data. All figures are in billions of dollars. Personal taxes $40 Social Security Contributions 15 Taxes on Production and Imports 20 Corporate Income Taxes 40 Transfer Payments 22 US Exports 24 Undistributed Corporate Profits 35 Government Purchases 90 Gross Private Domestic Investment 75 US Imports 22 Personal Consumption Expenditures 250 Consumption of Fixed Capital 25 Net Foreign Factor 10 Statistical Discrepancy 0 Refer to the above data. GDP is:
$417
If the natural rate of unemployment was 6 percent, the current unemployment rate was 12 percent, and the nominal GDP was $4,000 billion, then according to Okun's law the economy would have sacrificed:
$480 billion in potential output
Assume that an economy has 1500 workers, each working 2000 hours per year. If the average real output per worker-hour is $20, then total output or real GDP will be:
$60 million
Assume that an economy has 2,000 workers, each working 4,000 hours per year. If the average real output per worker-hour is $10, then total output or real GDP will be:
$80 million
Annual Rate of Inflation
(this year-last year)//last year
Current U.S. Debt
18.4 Trillion
From 1995-2007, labor productivity grew on average by:
2.7 percent
If the Consumer Price Index was 166.6 in one year and 172.2 in the next year, then the rate of inflation from one year to the next was:
3.4 %
A nation has a population of 260 million people. Of these, 60 million are retired, in the military, in institutions, or under 16 years old. There are 188 million who are employed and 12 million who are unemployed. What is the unemployment rate?
6 percent
Current Population
7.2 Billion
Assuming the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, the unemployment rate is:
8 percent
Which of the following is a final good or service? A. a haircut B. fertilizer purchased by a farm supplier C. diesel fuel bought for a delivery truck D. Chevrolet windows purchased by a General Motors assembly plant
A. a haircut
Which of the following is the smallest dollar amount in the United States? A. disposable income B. personal income C. gross domestic product D. national income
A. disposable income
Okun's Law
Actual Rate -Nominal rate = % x 2 = GDP gap
A supply factor in economic growth would be:
An increase in the quantity of labor
Which is a demand factor in economic growth?
An increase in total spending in the economy
The shift of labor out of agriculture to industry in the United States has tended to:
Increase labor productivity
GDP can be calculated by summing:
Investment, government purchases, consumption, and net exports
The agency responsible for compiling the National Income Product Accounts for the U.S. economy is the:
Bureau of Economic Analysis
Who calculates inflation?
Bureau of Labor Statistics
Frictional Unemployment
Searching or waiting to take job soon
Which factor has accounted for the largest increase in the productivity of labor in the United States? A. Economies of scale B. The quantity of capital C. Technological advance D. The education and training of workers
C. Technological advance
Which industry or sector of the economy would least likely be affected by the business cycle?
Services
Which of the following is the largest dollar amount in the United States? A. disposable income B. personal income C. gross domestic product D. national income
C. gross domestic product
Follower Countries
Can grow much faster because they can adopt leading technologies from the richer leading countries
What is one major measure of economic growth?
Changes in real GDP
Unemployment that occurs when there is deficient demand for the goods and services of an economy is called:
Cyclical
Structural Unemployment
Due to shift and changes in economy (i.e. computers invented
What economic concept would be most closely associated with a situation where an aluminum plant uses extensive computerization on the production line to reduce per-unit costs of production?
Economies of scale
A trough in the business cycle occurs when:
Employment and output reach their lowest levels
Who is the most affected by inflation
Fixed income receivers, savers, and creditors
+Personal Consumption +Gross Private Domestic Invest +Government Purchases +Net Exports =Gross Domestic Product
GDP
Final goods and services refer to:
Goods and services purchased by ultimate users, rather than for resale or further processing
Leader Countries
Grows by an average annual rate of 2 or 3 percent a year
3 Major Goals of Economy
Growth, Full Employment, Stable Prices
The knowledge and skills that make a productive worker are referred to by economists as:
Human Capital
A major argument for economic growth is that it:
Leads to a higher standard of living
GDP is the:
Monetary value of all final goods and services produced within the borders of a nation in a particular year
Total real output can be determined by:
Multiplying the input of labor (measured in work-hours) by labor productivity (measured by real output per worker per hour)
Gross Domestic Product (GDP) -Consumption of Fixed Capital =Net Domestic Product (NDP)
NDP
Net Domestic Product (NDP) -Statistical Discrepancy +Net Foreign Factor Income =National Income (NI)
NI
The system that measures the economy's overall performance is formally known as:
National income accounting
The full-employment rate of unemployment is also called the:
Natural rate of unemployment
In calculating GDP, governmental transfer payments, such as social security or unemployment compensation, are:
Not counted
National income accountants can avoid multiple counting by:
Only counting final goods
Cyclical Unemployment
Out of work because of recession (no jobs to be found)
National Income (NI) -Taxes on Production and Imports -Social Security Contributions -Corporate Income Taxes -Undistributed Corporate Profits +Transfer Payments =Personal Income (PI)
PI
The GDP gap measures the amount by which:
Potential GDP exceeds actual GDP
Intermediate Goods
Products purchased for resale or further manufacturing
Final Goods
Products that are purchased by their end users
Assume a current production possibilities are represented by the curve AB in the above diagram. Positive economic growth would best be indicated by a:
Shift in the curve from AB to CD
Institutional Structures that promote Economic Growth
Strong property rights, patents and copyrights, efficient financial institutions, literacy and widespread education, free trade and a competitive market
Kevin has lost his job in an automobile plant because of the use of robots for welding on the assembly line. Kevin plans to go to technical school to learn how to repair microcomputers. The type of unemployment Kevin is faced with is:
Structural
The single most important source of productivity for economic growth for the United States has been:
Technological Advance
A nation's gross domestic product (GDP):
The dollar value of all final output produced within the borders of the nation
Inflation is a rise in:
The general level of prices over time
Value Added
The market value of a firms output less the value of the inputs the firm has bought from others
The basic determinants of labor inputs (total hours of work) include:
The size of the labor force and average hours of work
The concept of net domestic investment refers to:
Total investment less the amount of investment goods used up in producing the year's output
Which is the correct way to calculate the unemployment rate?
[(unemployed)/(labor force)] x 100
CPI
price of most recent market basket //divided by// price estimate of market basket 1982-1984
