Macroeconomics Ch 5,6,7
An example of a transfer payment is
a Social Security retirement benefit.
Estimates for the natural rate of unemployment in the United States range from
4% to 6%.
If nominal GDP is $8 trillion and real GDP is $6 trillion, the GDP deflator is
133.33.
The value for net exports in billions of dollars is $Billions Durable goods 800 Nonresidential investment 400 Federal purchases of goods 300 Exports 400 State and local purchases of goods 200 Residential investment 50 Services 500 Imports 250 Change in business inventories minus−25 Nondurable goods 700
150.
The value for gross private domestic investment in billions of dollars is $Billions Durable goods 800 Nonresidential investment 400 Federal purchases of goods 300 Exports 400 State and local purchases of goods 200 Residential investment 50 Services 500 Imports 250 Change in business inventories minus−25 Nondurable goods 700
425.
The value of government spending in billions of dollars is $Billions Durable goods 800 Nonresidential investment 400 Federal purchases of goods 300 Exports 400 State and local purchases of goods 200 Residential investment 50 Services 500 Imports 250 Change in business inventories minus−25 Nondurable goods 700
500.
According to ________ economists, the economy is self-correcting
Classical
The ________ can change the quantity of money in the economy.
Federal Reserve
The equation for GDP using the expenditure approach is
GDP = C + I + G + EX-IM
Which of the following is not counted in the GNP of the United States?
The profit earned by a restaurant located in the United States but owned by a Mexican company.
A transfer payment is
a cash payment made by the government to people who do not supply goods, services or labor in exchange for the payment.
Which of the following is an example of a final good or service?
a computer purchased by Federal Express to track shipments
A prolonged and deep recession is called
a depression.
The government wants to encourage consumer spending through cutting income taxes. This is an example of
a fiscal policy.
For Joanna to be considered out of the labor force, she can be
a full- time student.
A price index is
a measurement showing how the average price of a bundle of goods changes over time.
Which of the following is a good or service counted in GDP?
a new tire you buy for your personal car
Gross national product is the total market value of
all final goods and services produced by resources owned by a country, regardless of where production takes place.
GDP is not a perfect measure of social welfare and the society's economic well-being because A. GDP accounting rules do not adjust for production that causes negative externalities. B. it does not say anything about the distribution of income. C. it does not include all economic activities in the economy. D. all of the above
all of the above
GDP is not a perfect measure of social welfare and the society's economic well-being because A. it does not say anything about the distribution of income. B. GDP accounting rules do not adjust for production that causes negative externalities. C. it does not include all economic activities in the economy. D. all of the above
all of the above
Gross domestic product measures A. the total income of everyone in the economy. B. the value of all output in the economy. C. the total spending of everyone in the economy. D. all of the above
all of the above
The GDP of the U.S. in 2014 was around $17.4 trillion. This means A. that the value of output in the U.S. in 2014 was around $17.4 trillion. B. that total spending on final goods and services in the U.S. in 2014 was around $17.4 trillion. C. that total income in the U.S. in 2014 was around $17.4 trillion. D. all of the above
all of the above
The GDP of the U.S. in 2014 was around $17.4 trillion. This means A. that total spending on final goods and services in the U.S. in 2014 was around $17.4 trillion. B. that total income in the U.S. in 2014 was around $17.4 trillion. C. that the value of output in the U.S. in 2014 was around $17.4 trillion. D. all of the above
all of the above
A period when the economy shrinks is known as A. a recession. B. a contraction. C. a slump. D. all of the above.
all of the above.
In a business cycle, a peak represents the end of ________ and a trough represents the end of ________.
an expansion; a recession
The short-term ups and downs in the level of economic activity is known as a(n)
business cycle.
The diagram that shows the income received and payments made by each sector of the economy is the
circular flow diagram.
According to the Classical model, unemployment
could not persist because wages would fall to eliminate the excess supply of labor.
Which prices are used to measure goods and services in calculating GDP?
current prices
When the Fed slows the rate of growth of the money supply to slow down the economy, the unemployment type that will be directly affected is the
cyclical unemployment.
The PPI is a price index that tends to be a leading indicator of
future inflation rates.
By not counting the value of intermediate goods when calculating GDP, you avoid
double counting.
Jake retired from the police force. He started working an hour or two a day at a paid job in city's courthouse. Jake is
employed
A period during which aggregate output rises is known as a(n)
expansion
Between a trough and a peak, the economy goes through a(n)
expansion.
Government policies regarding taxes and expenditures are called
fiscal policy.
When the government changes taxes and spending, it is implementing
fiscal policy.
A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as
frictionally unemployed.
When an economics professor quits his/her job at a university and starts looking for a better job in another university, he/she is
frictionally unemployed.
Which of the following is a topic studied in Macroeconomics? A. gross domestic product B. the wage of auto workers C. the price of Dell computers D. the amount of pizza produced
gross domestic product
The total market value of all final goods and services produced within a given period by factors of production located within a country is
gross domestic product.
The total market value of all final goods and services produced by resources owned by a country, regardless of where production takes place is
gross national product.
A period of very rapid increase in the overall price level is known as
hyperinflation
Cheryl graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Cheryl is
in the labor force.
Real GDP is gross domestic product measured
in the prices of a base year.
An increase in the overall price level is known as
inflation
According to the Classical economists, the economy
is self-correcting.
The Federal Reserve affecting the supply of money is known as
monetary policy.
The total income of the country is
national income.
Discouraged workers are
not considered as part of the labor force.
Annabel retired from the fire department. She started volunteering two hours a day at an unpaid job in the local hospital. Annabel is
not in the labor force.
Government policymakers would like to have high ________ and low ________.
output growth; unemployment and inflation
A price index that tends to be a leading indicator of future inflation rates is the
producer price index.
Which of the following is not a component of gross domestic product?
purchases by consumers of used goods
The GDP deflator is the
ratio of nominal GDP to real GDP multiplied by 100.
An auto worker in Ohio who loses her job because the company relocated the plant to another country represents an example of
structural unemployment.
An individual who cannot find a job because his or her job skills have become obsolete is an example of
structural unemployment.
Telephone operators who have lost their jobs as a result of computerized switchboards are an example of
structural unemployment.
The natural rate of unemployment is generally thought of as the
sum of frictional unemployment and structural unemployment.
The data in the national income and product accounts are compiled by
the Bureau of Economic Analysis.
Deflation occurs when
the average price level declines.
In which basic market would DVDs be traded?
the goods and services market
In which basic market would MP3 players be traded?
the goods and services market
The trend of the economy is
the long run growth path of the economy.
In which of the following markets are funds demanded and supplied?
the money market
Inflation is an increase in
the overall price level.
Which of the following is not a topic studied in Macroeconomics?
the price of Dell computers
Which of the following is not a topic studied in Macroeconomics? A. the inflation rate B. the unemployment rate C. gross domestic product D. the price of Dell computers
the price of Dell computers
Which of the following would not be counted in 2016's GDP? A. the value of a 2008 boat you purchase from a boat dealer in 2016 B. the 2016 salary of a used motorcycle salesperson C. the value of a refrigerator manufactured in 2016 but not sold in 2016 D. the commissions earned by a real estate agent in selling condominiums built prior to 2016
the value of a 2008 boat you purchase from a boat dealer in 2016
Unemployment implies that in the labor market
there is an excess supply of labor.
The major lesson of the circular flow diagram is that
total income in the economy must always equal total spending.
It has become conventional to classify an economic downturn as a recession when aggregate output declines for
two consecutive quarters.
Cyclical unemployment is the
unemployment that occurs during recessions and depressions.
In the circular flow diagram, the different payments made by firms to households include
wages and profits.
If, in 2016, an economy's total production was 50 bushels of soybeans at $20 each and 40 gallons of honey at $15 per gallon, its gross domestic product would be
$1,600.
If an economy produced 10 pizzas at $20 each and fifteen gallons of root beer at $5 each, the total value of these goods and services would be
$275.
The unemployment rate is
(labor force - employed)/labor force x 100.
If the CPI in 2015 was 104 and the CPI in 2016 was 106, then the rate of inflation between 2015 and 2016 was
1.92%.
If the price index in period 2 is 109 and the price index in period 3 is 125, the rate of inflation between period 2 and period 3 is
14.7%.
Employed 14,000 people Unemployed 3,000 people The labor force equals
17,000 people.
Employed 14,000 people Unemployed 3,000 people Not in the Labor Force 4,000 people The unemployment rate is
17.6%.
Refer to the information provided in the table at right to answer the question that follows. Personal consumption expenditures in billions of dollars are $Billions Durable goods 800 Nonresidential investment 400 Federal purchases of goods 300 Exports 400 State and local purchases of goods 200 Residential investment 50 Services 500 Imports 250 Change in business inventories minus−25 Nondurable goods 700
2,000.
If the labor force is 320,000 and the total population 16 years of age or older is 400,000, the labor-force participation rate is
80%.
Employed 14,000 people Unemployed 3,000 people Not in the Labor Force 4,000 people The labor-force participation rate is
80.9%.
Employed 14,000 people Unemployed 3,000 people Not in the Labor Force 4,000 people The employment rate is
82.4%.
If the labor-force participation rate is 82% and the total population 16 years of age or older is 1 million people, the labor force is
820,000 people.
The value of what Burger King produces in France is included in the United States ________ and in the French ________.
GNP; GDP
The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese ________.
GNP; GDP
When calculating GDP, exports are ________ and imports are ________.
added; subtracted
In the circular flow diagram, firms ________ labor and households ________ goods and services.
demand; demand.
The demanders in the goods-and-services market are
households, the government, business firms, and the rest of the world.
Inflation refers to a(n) ________ in the overall ________.
increase; price level
Unemployment generally ________ during recessions and ________ during expansions.
rises; falls.
The term business cycle refers to the
short-term ups and downs in the level of economic activity.
The period in the business cycle from a ________ to a ________ is called an expansion.
trough; peak
The unemployment rate equals
unemployed/labor force.