macroquiz levy
The reserve ratio is a bank's reserves as a fraction of its
total deposits.
The employment-to-population ratio is defined as 100 times
total employment divided by the working-age population.
The unemployment rate equals 100 times the number of
unemployed workers divided by the labor force.
Frictional unemployment is
unemployment associated with the changing of jobs in a changing economy.
Frictional unemployment includes
unemployment caused by normal labor turnover associated with people leaving and entering the labor force.
An individual who has stopped looking for a job because he is convinced that he cannot find a job is referred to as
a discouraged worker.
A $25,000 price tag on a new car is an example of money as
a unit of account.
The circular flow shows that
aggregate expenditure is less than aggregate income and GDP equals aggregate income
Gross private domestic investment is all purchases of newly produced business capital goods and buildings
are not counted as a part of GDP.
The four categories of expenditure used by the expenditure approach method to calculate GDP are
consumption expenditure, investment, government expenditure and net exports.
The income approach measures GDP by adding together compensation of employees, proprietors' income, ________.
corporate profits and subsidies
Depreciation is defined as the
decrease in the stock of capital due to wear and tear.
The total number of people aged 16 years and over who are not institutionalized ________.
is the working-age population
A bank creates money by
lending its excess reserves
Based on the following data for the country of Tiny Town, the unemployment rate equals: Population = 100 Labor force = 80 Number of employed persons = 70 Number of discouraged workers = 5
0/80 × 100.
If the price level last year was 220 and this year is 250, what is the inflation rate between the two years?
13.6 percent
If the CPI was 121.5 at the end of last year and 138.3 at the end of this year, the inflation rate over these two years was
13.8 percent.
If the number of people unemployed is 100, the number of people employed is 1000, and the working-age population is 1400, then the labor force participation rate is
78.6 percent.
Nominal GDP is
GDP valued at prices of that year.
Of the following, which is correct?
Nominal GDP increases when the prices of goods and services increase.
Gross investment is equal to
depreciation plus net investment.
The income approach to measuring GDP
determines the cost of production, then adjusts it to equal the market value of production.
Goods that are produced this year, stored in inventories, and then sold to consumers next year
expenditure approach
In years with inflation, nominal GDP increases ________ real GDP.
faster than
Cyclical unemployment
fluctuates over the business cycle.
Barter occurs when you exchange
goods for other goods.
In the circular flow model, consumption expenditures are the spending by
government in financial markets.
GDP using the expenditure approach equals the sum of personal consumption expenditures plus
gross private investment plus government expenditure on goods and services plus net exports of goods and services
Proprietors' income is a component of which approach to measuring GDP?
incomes approach
The presence of ________ creates a difference in the value between the market price and the factor cost of a product.
indirect taxes and subsidies
Money ________.
is any commodity that is generally acceptable as a means of payment
Which function of money refers to the use of money to solve the problem of a need for a double coincidence of wants?
medium of exchange
The functions of money are
medium of exchange, unit of account, and store of value.
The most direct way in which money replaces barter is through its use as a
medium of exchange.
Personal consumption expenditures include all of the following EXCEPT spending on
new housing.
Which of the following is NOT 23) included in the working-age population?
people in prison
The unemployment rate is defined as the
percentage of the labor force not working.
If depreciation is less than gross investment, then net investment is
positive.
The unit of account function occurs when money serves as a
pricing mechanism.
During periods of inflation, which function of money is most severely affected?
store of value
When you keep money in a change jar to be used later, what function is it fulfilling?
store of value.
The components of the expenditure approach to measuring GDP include all of the following EXCEPT
the implicit payments for unpaid household work.
An individual is structurally unemployed if
the individual lacks marketable job skills because technology has changed
The primary factor leading to cyclical unemployment is when
the level of overall economic activity fluctuates
The term capital, as used in macroeconomics, refers to
the plant, equipment, buildings, and inventories of raw materials and semi-finished goods
The circular flow diagram shows that
the total amount of income generated by the economy equals the total purchases of final goods and services.
The Consumer Price Index is a measure of the average of the prices paid by ________ for a fixed basket of consumer goods and services.
urban consumers
Real GDP measures the
value of total production linked to prices of a single year.
In the GDP definition, market value refers to
valuing production according to the market price.
The labor force is defined as
workers with jobs and unemployed workers.
