Test 2 Macro economics
Suppose the total monetary value of all final goods and services produced in a particular country in a year is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that
GDP that year is $500 billion.
Which of the following is not a supply factor in economic growth?
aggregate expenditures of households, businesses, and government
Buying a new pair of jeans for yourself would increase
consumer nondurable goods and consequently personal consumption expenditures.
If the Consumer Price Index falls from 120 to 116 in a particular year, the economy has experienced
deflation of 3.3 percent.
A competitive market system
encourages growth by allowing producers to make profitable investment decisions based on market signals.
Net exports are
exports less imports.
The money paid by private businesses to the suppliers of loans used to purchase capital is called .
interest.
If the number of hours worked in an economy is 108 and its labor productivity is $9 of output per hours worked, the economy's real GDP
is $972.
After the steam engine was perfected,
items that were once handcrafted, were now mass-produced in factories.
The system that measures the economy's overall performance is formally known as
national income accounting.
National income accountants can avoid multiple counting by
only counting final goods.
During a period of hyperinflation.
people tend to trade and barter instead of working and producing.
Inflation means that
prices on average are rising, although some particular prices may be falling.
A nation's infrastructure refers to
public capital goods such as highways and sanitation systems.
The production of durable goods varies more than the production of nondurable goods because
purchases of durable goods can be postponed.
Suppose that an economy's labor productivity fell by 3 percent and its total hours of work remained constant between Year 1 and Year 2. We could conclude that this economy's
real GDP declined.
Unanticipated inflation
reduces the real burden of the public debt to the federal government.
The four supply factors (determinants) that relate to economic growth relate to relaxing the physical and technical limits that constrain economic expansion.
relate to relaxing the physical and technical limits that constrain economic expansion.
Disinvestment occurs when
the consumption of private fixed capital exceeds gross private domestic investment.
Value added refers to
the difference between the value of a firm's output and the value of the inputs it has purchased.
national income accounting.
the economy's stock of capital is shrinking.
Economies of scale refers to
the fact that large producers may be able to use more efficient technologies than smaller producers.
A price index is
the price of a market basket in a given year divided by the price of an identical market basket in a reference year.
Which of the following will NOT be included in U.S. GDP?
the value of avocados grown in Mexico and shipped to your local grocery store
Which of the following will be included in U.S. GDP?
the value of the cars produced at a Japanese-owned Toyota factory in Ohio
If intermediate goods and services were included in GDP,
then GDP would be overstated.
The Bureau of Economic Analysis compiles the NIPA accounts. The letters NIPA represent
National Income and Product Accounts.
National income accountants define consumer durable goods as products that have an expected life of
3 years or more.
The nation's stock of capital
All of the answers are correct.
Real GDP refers to
GDP data that have been adjusted for changes in the price level.
What made the pandemic recession of 2020 so unusual?
It was unusual because it was caused by a public health crisis.
Who is least likely to be hurt by unanticipated inflation?
an owner of a small business
Expenditures on the research and development (R&D) of new productive technologies
are included in Ig.
Rapid asset price increases
are sometimes referred to as financial bubbles.
Inflation affects
both the level of real income and the distribution of income.
The income amount used for "Rents" in the national accounts is net rent, so it is
gross rental income minus depreciation of the rental property.
The income approach to national income accounting lists "Rents" as one of the components. All of the following statements about "rents" are correct except
rents include the interest paid to the suppliers of loans used to purchase capital.
Innovations such as computers and the Internet led to business cycle variations because
significant innovations occur irregularly and unexpectedly.
The four supply factors (determinants) that relate to economic growth
will increase the potential size of an economy's GDP.
