Unit 1
College tuition for 1 year cost $2,500 in 1976 and $11,000 in 2007. By what factor have the prices increased? -44 44 -4.4 4.4
4.4
If a gallon of milk costed 5 cents in 1930 and today costs $4.50, prices have increased by which of the following factors? .9 900 90 .01
90
Which of the following correctly lists the three principal parties in an economy? Dividends, profit, and rent Taxes, subsidies, and regulations Wages, interest, and transfer payments Consumers, businesses, and the government
Consumers, businesses, and the government
Which definition below corresponds to economic indicators? Exchange transactions that occur across nations The movement of money in and out of a country or other entity The movement of the market through periods of expansion, recession, peaks, and troughs Data that indicate past, present, and future activity
Data that indicate past, present, and future activity
Which of the following is NOT a good reason to study macroeconomics? It can explain the economic impact of global trade. It can help someone understand choices made at the individual level. It can increase knowledge on key economic indicators. It can explain the mechanics of economic policy.
It can help someone understand choices made at the individual level.
Which statement below is true of GDP? It measures the sum of the value of goods and services imported into a country. It is a rarely used tool in comparisons of the economies of different countries. It describes the past state of the economy instead of present conditions. It is more of an indicator of quality of life than consumption.
It describes the past state of the economy instead of present conditions.
Which statement below about economics is NOT true? It only considers the choices that take place at an individual level. It is a social science. It uses both conceptual analysis and a mathematical framework to explain decision-making processes. It considers the optimizing activities of individuals and entities.
It only considers the choices that take place at an individual level.
Select the statement below that is FALSE regarding labor force participation by gender. The employment of women in living-wage occupations raises the standard of living for families. Labor force participation rates are not a good indicator of a country's economic health. GDP indirectly accounts for labor force participation. The employment of women in living-wage occupations leads to lower birth rates.
Labor force participation rates are not a good indicator of a country's economic health.
In the circular flow diagram, which of the following flows from households to firms? Money for the purchase of goods and services Wages and interest Purchase of foreign-made goods Taxes
Money for the purchase of goods and services
Which statement below about economics is false? Macroeconomics studies the application of economics across an economy. Economics is part of the humanities because it studies human decision-making. Most questions about economics address the central banking system and financial economics. Microeconomics studies decision-making at the individual level.
Most questions about economics address the central banking system and financial economics.
Someone who has given up looking for work would be classified as which of the following? Not in the labor force Marginally employed Unemployed Underemployed
Not in the labor force
Which of the following statements are true regarding unemployment? It is possible to eliminate natural unemployment. Full employment is natural unemployment minus 100%. Frictional unemployment is because of changes in the economy. People who lost their jobs during the recession experienced cyclical unemployment.
People who lost their jobs during the recession experienced cyclical unemployment.
Select the statement below that corresponds to the business cycle. Happens between expansions and recessions Shows only the periods of economic decline Process of expansion and contraction of the GDP Happens between recessions and expansions
Process of expansion and contraction of the GDP
Which of the following is a leading economic indicator? Consumer confidence Consumer credit Unemployment Retail sales
Retail sales
Which statement is true regarding women's participation in the labor market? Birth rates have increased as women's employment rates have increased. More men than women are employed in the informal sector. Standards of living increase as women's participation in the workforce increases. Women are no longer responsible for most domestic work because they have increased their labor force participation.
Standards of living increase as women's participation in the workforce increases.
Which of the following statements regarding the PPI and the CPI is true? Both the PPI and the CPI are leading indicators. The PPI is a leading indicator and the CPI is a lagging indicator. Both the PPI and the CPI are lagging indicators. The PPI is a lagging indicator and the CPI is a leading indicator.
The PPI is a leading indicator and the CPI is a lagging indicator.
Which statement below regarding expansions is true? They occur when the economy is experiencing GDP growth. They happen when GDP reaches its lowest point. They happen when GDP reaches its highest point. They occur during times of high rates of unemployment.
They occur when the economy is experiencing GDP growth.
Which statement below applies to the expenditure approach when calculating GDP? Counts income received from the purchase of goods and services Uses the acronym WRIP Typically easier to understand than other approaches More practical approach
Typically easier to understand than other approaches
According to this circular flow diagram, which of the following flows FROM the government TO households? Purchase of goods and services Wages, interest, and transfer payments Profits, dividends, and rent Taxes
Wages, interest, and transfer payments
Since it takes businesses time to respond to economic events in hiring or laying off workers, the unemployment rate is generally considered __________. a leading indicator a coincident indicator a lagging indicator a perfect indicator
a lagging indicator
Government can change markets through all of the following except __________. enacting regulations awarding large business contracts awarding subsidies changing the tax rate
awarding large business contracts
Which statement below about the business cycle is true? It is impossible to make generalized statements about the business cycle. It tends to be in an overall state of recession. Although it goes up and down at times, overall, it remains constant. Although it experiences periods of expansion and recession, overall, the trend is growing.
Although it experiences periods of expansion and recession, overall, the trend is growing.
Which of the following describes the Producer Price Index? Used by the Conference Board to assess economic growth An evaluation of crude, intermediate, and finished goods A popular economic indicator, despite its statistical issues A strong indicator of economic growth, but not wealth distribution
An evaluation of crude, intermediate, and finished goods
Which of these is NOT revealed by labor force participation rates of a country? Availability of resources Overall economic well-being Standard of living Birth rate
Availability of resources
Which statement below regarding economic indicators is true? Economic indicators provide a long-term view of the economy. Trends that describe what has already happened are considered coincident indicators. Economic indicators are macroeconomic by their very nature. One single indicator can perfectly describe what is going on in the economy.
Economic indicators are macroeconomic by their very nature.
Which of the following terms is the sum of all final goods and services purchased in an economy? Expenditure approach Factor market Resource cost/income approach GDP growth
Expenditure approach
What is the total amount of economic product that a country produces? NBER Federal Reserve GDP The business cycle
GDP
Which of the following is false with respect to the use of GDP to compare countries? GDP cannot measure consumption-led growth well. GDP cannot measure nonmarket activities. GDP cannot measure gains to all economic classes. GDP cannot adequately measure leisure time.
GDP cannot measure consumption-led growth well.
Which of the following is a benefit of women employed in occupations that pay a living wage? Increase in birth rate Increased home responsibilities Increase in income inequality Increased resource availability to children
Increased resource availability to children
A person who leaves employment and moves to a new state where their skills are marketable to find work is considered to be undergoing __________ unemployment. seasonal structural cyclical frictional
frictional
