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Macroeconomics

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Exam 2 Chapters 8, 9, 10
acox12
Quiz por acox12, atualizado more than 1 year ago
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Questão 1

Questão
If real GDP in a small country in 2005 is $8 billion and the real GDP in the same country in 2006 is $8.3 billion, the growth rate of real GDP between 2005 and 2006
Responda
  • is 3.75%
  • is 3.6%
  • is 3.0%
  • cannot be determined from the information given.

Questão 2

Questão
According to the "Rule of 70", how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?
Responda
  • less than 1 year
  • 14 years
  • 5 years
  • 35 years

Questão 3

Questão
The quantity of goods and services that can be produced by one worker or by one hour of work is
Responda
  • labor productivity
  • technology
  • real GDP
  • human capital

Questão 4

Questão
What two factors are the keys to determining labor productivity?
Responda
  • technology and the quantity of capital per hour worked
  • the growth rate of real GDP and interest rate
  • the average level of education of the workforce and the price level
  • the business cycle and the growth rate of real GDP

Questão 5

Questão
Human capital refers to which of the following?
Responda
  • manufactured goods that are used to produce other goods and services
  • the accumulated knowledge and skills workers acquire from education and training or from their life experiences
  • the quality of good and services that can be produced by one worker or by one hour of work
  • physical that is made by human laborers, not machines

Questão 6

Questão
On difference between stocks and bonds is that
Responda
  • stocks represent ownership in companies, while bonds represent ownership in banks.
  • stocks usually issued in electronic form, while bonds are usually issued in paper form.
  • stocks so not involve a promise to repay the purchaser of the stock, while bonds represent a promise to repay the purchase price of the bond.
  • stocks are financial securities, while bonds are labor market securities.

Questão 7

Questão
In addition to matching households that have excess funds with firms that want to borrow funds, what three key services does the financial system provide for savers and borrowers?
Responda
  • risk-sharing, liquidity, and information
  • information, profit, and interest
  • high risk, high profit, and low savings
  • bonds, stocks, and mutual funds

Questão 8

Questão
In a closed economy, which of the following components of GDP is NOT included?
Responda
  • consumption
  • government spending
  • net exports
  • investment

Questão 9

Questão
In a closed economy, which of the following equations reflects investment? (Y=GDP, C= Consumption, G=Government purchases, T=Taxes, and TR=Transfers)
Responda
  • Y - C - G
  • C + G - T
  • Y - T + TR
  • Y - C - T

Questão 10

Questão
Under which of the following circumstances would the government be running a deficit?
Responda
  • G= $7 trillion T= $10 trillion TR= $3 trillion
  • G= $7 trillion T= $7 trillion TR= $0
  • G= $5 trillion T= $7 trillion TR= $1 trillion
  • G= $5 trillion T= $5 trillion TR= $1 trillion

Questão 11

Questão
Inflation tends to________during the expansion phase of the business cycle and________during a recession phase of the business cycle.
Responda
  • increase; increase further
  • increase; decrease
  • decrease; decrease further
  • decrease; increase

Questão 12

Questão
Consider the following data for a simple economy: Total Population 20,000 Working-Age Population 15,000 Employment 1,000 Unemployment 100
Responda
  • (100/1,000) X 100
  • (100/20,000) X 100
  • (100/15,000) X 100
  • (100/1,100) X 100

Questão 13

Questão
Total Population 20,000 Working-Age Population 15,000 Employment 1,000 Unemployment 100 Refer to the table above. The unemployment rate for this simple economy equals
Responda
  • (1,100/20,000) X 100
  • (1,000/15,000) X 100
  • (1,000/1,100) X 100
  • (1,100/15,000) X 100

Questão 14

Questão
Cyclical employment is the result of
Responda
  • a slowdown in the economy
  • the ups and downs in inflation
  • the search process of matching workers with jobs
  • frictional unemployment equals zero

Questão 15

Questão
Economist consider full employment to occur when
Responda
  • everyone who wants a job has a job
  • all existing unemployment is either frictional unemployment or structural unemployment
  • frictional unemployment and structural unemployment equals zero
  • frictional unemployment equals zero

Questão 16

Questão
Which of the following would be the best measure of the cost of living?
Responda
  • real GDP per person
  • GDP deflator
  • real GDP
  • Consumer Price Index

Questão 17

Questão
The consumer price index is the
Responda
  • ratio of the dollar amount necessary to buy the market basket of goods in that year divided by the dollar amount necessary to buy of goods in the base year.
  • ratio of the dollar amount necessary to buy a basket of goods typically consumed in the current period divided by the dollar amount necessary to buy the market basket of goods in the base year.
  • cost of a basket of goods typically consumed in the current period.
  • the cost of a basket of goods typically consumed in the base year.

Questão 18

Questão
Consider the following values of the consumer price index for 2002 and 2003. Year CPI 2002 180 2003 184 The inflation rate for 2003 equals
Responda
  • 184 percent
  • 2.2 percent
  • 4.0 percent
  • 18.4 percent

Questão 19

Questão
The real interest rate equals the nominal interest rate_______the inflation rate.
Responda
  • times
  • divided by
  • minus
  • plus

Questão 20

Questão
Suppose you borrow $1,000 at an interest rate of 12 percent. If the expected real interest rate is 5 percent, then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate inflation.
Responda
  • less than 7 percent
  • greater than 7 percent
  • equal to 7 percent
  • equal to 0 percent

Questão 21

Questão
Assume the market basket for the consumer price index has two products--meant and potatoes--with the following values in 2000 and 2006 for price and quality: Base Year Product Quality Price (2000) Product Quality Price (2006) Meat 100 $10 Meat 120 $12 Potatoes 200 $2 Potatoes 180 $3 The Consumer Price Index for 2006 equals
Responda
  • 125
  • 141
  • 129
  • 135

Questão 22

Questão
Full employment is not considered to be zero unemployment, because
Responda
  • of cyclical unemployment
  • some people do not want a job
  • even though there are enough jobs, the search process of matching workers with jobs and the mismatch between skills and job requirements prevent individuals from immediately finding jobs.
  • there are not enough jobs for everyone who wants one.

Questão 23

Questão
Gross domestic product in the economy is measured by the
Responda
  • total number of goods and services produced in the economy
  • total number of services produced in the economy
  • dollar value of all final goods and services produced in the economy
  • total number of goods produced int eh economy

Questão 24

Questão
How are intermediate goods treated in the calculation of GDP?
Responda
  • Their value is not counted separately, but included as part of the value of the final good for.
  • Their value is counted separately, and their value is also included as part of the value of the final good for which they are an input.
  • They are included only if they are imported.
  • Their value is counted separately, but not included as part of the value of the final good for which they are an input.

Questão 25

Questão
Investment spending includes spending on
Responda
  • transfer payments
  • food
  • changes in business inventories
  • stocks

Questão 26

Questão
In a small economy, gross investment in 2009 is $1,500, consumption spending is $6,000, net investment is $200, government spending is $1,500, exports are $2,000 and imports are $1,000. What is the GDP for the economy in 2009?
Responda
  • $10,700
  • $10,300
  • $10,200
  • $10,000

Questão 27

Questão
GDP is not a perfect measure of well-being because
Responda
  • GDP is not adjusted for pollution.
  • GDP is adjusted for increases in drug addiction .
  • GDP is adjusted for changes in crime rates.
  • the value of leisure is included in GDP.

Questão 28

Questão
The underground economy can be described as
Responda
  • production of infrastructure that spurs growth in the rest of the economy.
  • production of intermediate goods and services.
  • economic production that includes mining.
  • economic activity that is hidden from the government to avoid taxed or because the activity is illegal.

Questão 29

Questão
The measure of production that values production using current prices is called
Responda
  • underground GDP
  • real GDP
  • nominal GDP
  • value-added GDP

Questão 30

Questão
Given the information, what can we say has happened in the economy from 2008 and 2009? 2008 2009 Nominal GDP $10,000 $12,000 Real GDP $9,500 $10,500
Responda
  • The price level has risen.
  • The price level has remained constant.
  • The price level has fallen.
  • Not enough information is available to determine what has happened to prices.

Questão 31

Questão
If real GDP increases we know for sure that
Responda
  • prices have risen
  • output has risen
  • prices have remained constant
  • prices have risen but output has remained constant

Questão 32

Questão
If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years.
Responda
  • 270%
  • 50%
  • 5%
  • 2.7%

Questão 33

Questão
Gross national product is defined as
Responda
  • the value of final goods and services produced within the United States, by United States residents.
  • the value of final goods and services produced outside of the United States.
  • the value of final goods and services produced by residents of the United States even if the production takes place outside of the United States.
  • the value of final goods and services produced within the United States.

Questão 34

Questão
Disposable personal income is
Responda
  • national income minus depreciation.
  • personal income minus indirect business taxes.
  • national income minus personal taxes.
  • personal income minus personal taxes.

Questão 35

Questão
National income is
Responda
  • NNP minus income taxes.
  • GDP minus depreciation.
  • GNP plus depreciation.
  • GDP minus sales taxes.

Questão 36

Questão
What are the four major categories of expenditure?
Responda
  • Labor, capital, natural resources, and entrepreneurship.
  • Final goods, intermediate goods, production, and income.
  • Wages, interest, rent, and profit.
  • Consumption, investment, government purchases, and net exports.

Questão 37

Questão
What is GDP an imperfect measurement of total production in the economy?
Responda
  • GDP does not include household production or production form the underground economy.
  • The official measure of GDP does not include intermediate goods and services.
  • GDP measures total income paid to the factors of production, not production
  • The BEA does not include the value of new houses in GDP

Questão 38

Questão
What are the four categories of income?
Responda
  • wages, salaries, interest, and dividends
  • consumption, investment, government purchases, and net exports
  • wages, interest, rent, and profit
  • labor , capital, natural resources, and entrepreneurship

Questão 39

Questão
Suppose the base year is 2001. Looking at GDP data from the United States from 2001 to the present, what would be true of the relationship between nominal GDP and real GDP?
Responda
  • RGDP = NGDP because prices are stable.
  • RGDP < NGDP because prices are rising.
  • RGDP > NGDP because prices are falling.
  • The relationship is uncertain without more information on prices.

Questão 40

Questão
Real GDP per capita is often used as a measure of general well-being. While increases in real GDP often do lead to increases in the well-being of the population, why is real GDP not a perfect measure of well-being?
Responda
  • The costs of pollution are not included.
  • The value of leisure is not included
  • GDP does not include crime rates or income distribution
  • All of the above

Questão 41

Questão
Personal income is
Responda
  • national income minus retained corporate earnings plus government transfer payments and interest on government bonds.
  • national income minus income taxes.
  • equal to the value of all final goods and services produced within a country's borders during one year.
  • national income plus government transfer payments.

Questão 42

Questão
The largest component of gross domestic income is
Responda
  • rent.
  • profits.
  • wages.
  • interests.

Questão 43

Questão
Coffee beans purchased by a coffee shop are a
Responda
  • intermediate good.
  • neither.
  • final good.

Questão 44

Questão
Johnny is currently "in-between" jobs. What type of unemployment fits Johnny's status?
Responda
  • Structurally unemployed
  • Seasonally unemployed
  • Cyclically unemployed
  • Fictionally unemployed

Questão 45

Questão
Which of the following makes changes in the CPI overstate the true inflation rate?
Responda
  • Increase in quality bias
  • New product bias
  • Substitution bias
  • All of the above

Questão 46

Questão
Which of the following best describes a current trend in the labor force participation rate?
Responda
  • It is increasing for men and decreasing for women.
  • It is decreasing for both men and women.
  • It is increasing for both men and women.
  • It is decreasing for men and increasing for women.

Questão 47

Questão
How does the U.S. economy create and destroy millions of jobs each year? (Mark all that apply.)
Responda
  • Some businesses are expanding, while others are contracting
  • In the market system, new firms are constantly entering and exiting various industries.
  • The federal government determines that certain industries are obsolete and closes firms.
  • When unemployment is high, the federal government hires more workers to offset the effects of unemployment.

Questão 48

Questão
IF a 3-month Treasury bill pays 5.5% and the change in the consumer price index (CPI) is 4.7%, what is the real interest rate (the true return to lending)?
Responda
  • 4.7%
  • 10.2%
  • 5.5%
  • 0.8%

Questão 49

Questão
Your father earned $34,000 per year in 1984. To the nearest dollar, what is that equivalent to in 2008 if the CPI in 2008 is 215 and the CPI in 1984 is 104?
Responda
  • $34,000
  • $70,288
  • $16,447
  • $73,100

Questão 50

Questão
Having happy workers increases business. This is an example of
Responda
  • Structural unemployment
  • Union contracts
  • Market strategies
  • Efficiency wages

Questão 51

Questão
Even perfectly anticipated inflation imposes costs. Why?
Responda
  • A)Some wages will fail to keep up with the anticipated inflation.
  • B)Menu costs
  • C)Paper money loses it purchasing power by the rate of inflation.
  • A and C only.
  • All of the above

Questão 52

Questão
Consider the following table: Nominal Average Year Hourly Earnings CPI 2008 $16 202 2009 $17 207 2010 $18 209 What is the real average hourly wage in 2009?
Responda
  • $8.61
  • $7.92
  • $8.21
  • $17.42

Questão 53

Questão
Consider the following table: Nominal Average Year Hourly Earnings CPI 2008 $16 202 2009 $17 207 2010 $18 209 What can be said about real average hourly earnings and nominal average hourly earnings between 2008 and 2010?
Responda
  • Real average hourly earnings decreased and nominal average hourly earnings increased.
  • Both real and nominal average hourly earnings decreased.
  • Real average hourly earnings increased and nominal average hourly earnings decreased.
  • Both real and nominal average hourly earnings increased.

Questão 54

Questão
Indicate whether the following statement is true or false and why. "A wage rising slower than the rate of inflation is actually falling."
Responda
  • True. If wages are increasing slower that the average price of goods and services, purchasing power increases.
  • True. If wages are increasing slower that the average price of goods and services, purchasing power falls.
  • False. A higher wage decreases purchasing power regardless of inflation.
  • False. A higher wage increases purchasing power regardless of inflation.

Questão 55

Questão
Indicate whether the following statement is true or false and why. "A wage rising slower than the rate of inflation is actually falling."
Responda
  • True. If wages are increasing slower that the average price of goods and services, purchasing power increases.
  • True. If wages are increasing slower that the average price of goods and services, purchasing power falls.
  • False. A higher wage decreases purchasing power regardless of inflation.
  • False. A higher wage increases purchasing power regardless of inflation.

Questão 56

Questão
Indicate whether the following statement is true or false and why. "A wage rising slower than the rate of inflation is actually falling."
Responda
  • True. If wages are increasing slower that the average price of goods and services, purchasing power increases.
  • True. If wages are increasing slower that the average price of goods and services, purchasing power falls.
  • False. A higher wage decreases purchasing power regardless of inflation.
  • False. A higher wage increases purchasing power regardless of inflation.

Questão 57

Questão
When the economy is at full employment,
Responda
  • all remaining unemployment is either frictional or structural.
  • the nature rate of unemployment prevails.
  • the unemployment rate is greater than zero.
  • All of the above.

Questão 58

Questão
Which of the following formulas does the Bureau of Labor Statistics use to calculate the unemployment rate?
Responda
  • Number of unemployed ________________________ x 100 Working-age population
  • Number of unemployed ________________________ x 100 Number of employed
  • Number in labor force ________________________ x 100 Number of unemployed
  • Number of unemployed ________________________ x 100 Number in labor force

Questão 59

Questão
The true cost of borrowing and lending is best measured by
Responda
  • the inflation rate.
  • the three-month U.S. Treasury bill rate.
  • the nominal interest rate.
  • the real interest rate.

Questão 60

Questão
Which of the following can give an early warning of future increases in the price level?
Responda
  • Consumer price index
  • Producer price index
  • GDP deflator
  • All of the above

Questão 61

Questão
Which of the following can give an early warning of future increases in the price level
Responda
  • Consumer price index
  • Producer price index
  • GDP deflator
  • All of the above

Questão 62

Questão
As of September 2011, which of the following demographics groups has the highest unemployment rate?
Responda
  • Asians
  • African Americans
  • Hispanics
  • Whites

Questão 63

Questão
What effect do labor unions have on the unemployment rate?
Responda
  • By increasing the wage above market equilibrium, labor unions considerably increase the unemployment rate.
  • By increasing the wage above market equilibrium, labor unions considerably decrease the unemployment rate.
  • Labor unions can significantly increase the unemployment rate when members go on strike.
  • Since few non-government workers are unionized, there is no significant effect on the unemployment rate.

Questão 64

Questão
What factors would cause the U.S. labor productivity to be nearly six times higher than Russian labor productivity?
Responda
  • The size of the civilian labor force in larger in Russia, causing diminishing returns to set in.
  • The size of the civilian labor force is larger in the U.S.
  • The U.S. has more capital available per worker and higher levels of technology.
  • Russia overall has a smaller capital stock

Questão 65

Questão
During a recession, unemployment would be expected to
Responda
  • increase
  • decrease
  • stay the same

Questão 66

Questão
during a recession, durable goods production, such as automobiles, would be expected to
Responda
  • increase
  • decrease
  • stay the same

Questão 67

Questão
During a recession, the inflation rate would be expected to
Responda
  • stay the same
  • decrease
  • increase

Questão 68

Questão
The most important factor in explaining increases in real GDP per capita in the long run is increase in productivity.
Responda
  • True
  • False

Questão 69

Questão
When tax revenue exceeds government spending (government purchases and transfer payment) there is a
Responda
  • budget surplus
  • balanced budget
  • budget deficit

Questão 70

Questão
When tax revenue equals government spending there is a
Responda
  • balanced budget
  • budget surplus
  • budget deficit

Questão 71

Questão
When tax revenue is less than government spending there is a
Responda
  • budget deficit
  • a balanced budget
  • budget surplus

Questão 72

Questão
Which of the following expressions shows the investment-saving equality?
Responda
  • S=Y+T-TR-G
  • S=Y+T-C-G
  • S=Y-C-G
  • S=Y+TR-C-T

Questão 73

Questão
Which of the following is not a loanable fund?
Responda
  • Real estate
  • Bank certificates of deposit
  • Bonds
  • Mutual fund shares

Questão 74

Questão
Households supply loanable funds because of the
Responda
  • wage income earned from working in the financial markets.
  • rent income they receive as resource owner.
  • interest income received from the borrowers
  • profit income earned from running a money-lending business

Questão 75

Questão
Businesses demand loanable funds because
Responda
  • firms need to borrow funds for new projects, such as building new factories or carrying out new projects
  • households charge a much higher rate of interest than the going rate of interest in the loanable funds market.

Questão 76

Questão
What is the general relationship between the business cycle and unemployment and inflation?
Responda
  • During an expansion, unemployment and inflation increase.
  • During an expansion, unemployment falls and inflation increase.
  • During an recession, unemployment and inflation increase.
  • During an recession, unemployment and inflation decrease.

Questão 77

Questão
The rule of 70 is a mathematical formula that is used to calculate the number of years it takes real GDP per capita or any other variable to double.
Responda
  • True
  • False

Questão 78

Questão
Crowding out occurs when governments must borrow funds which cause interest rates to rise and thus private investment is reduced.
Responda
  • True
  • False

Questão 79

Questão
Two key factors that cause labor productivity to increase over time are
Responda
  • quantity of capital per hour worked
  • level of technology
  • quantity of labor per hour worked
  • decline in unionization
  • slacking of labor laws

Questão 80

Questão
Which of the following will NOT lead to economic growth?
Responda
  • Technological change
  • Increase in the capital stock
  • Increase in average wages
  • Improved labor productivity

Questão 81

Questão
Which of the following is most likely to lead to sustained long-run growth?
Responda
  • increases in labor productivity
  • increases in the labor participation rate
  • exploitation of natural resources
  • transfer of workers from agricultural to industrial sectors

Questão 82

Questão
During the expansion phase of the business cycle, production, employment, and income
Responda
  • increase
  • decrease

Questão 83

Questão
During the recession phase of the business cycle, production, employment, and income
Responda
  • increase
  • decrease

Questão 84

Questão
Firms that act as financial intermediaries match households that have excess funds with firms that want to borrow funds. What other key services does the financial system provide to savers and lenders?
Responda
  • allows savers to spread their money among many financial investments.
  • provides an easy method of exchanging a financial security for money.
  • collects and communicates information about borrowers to savers.
  • insures investments against decreasing in value.

Questão 85

Questão
Long-run growth in GDP is determined by
Responda
  • capital, labor productivity, and technology
  • capital, labor productivity, and government expenditures
  • consumption, investment, and government expenditures
  • consumption, investment, and technology

Questão 86

Questão
Technological progress is affected by
Responda
  • private property rights
  • new software developments
  • population growth
  • investment in capital
  • entrepreneurship

Questão 87

Questão
Potential GDP
Responda
  • measures the maximum that a firm is capable of producing
  • increases over time as the labor force grows.
  • increases over time as technological change occurs

Questão 88

Questão
Which of the following contribute(s) to shorter recessions,longer expansions, and less severe fluctuations in real GDP?
Responda
  • monetary policy
  • unemployment insurance
  • a service-based economy

Questão 89

Questão
Business cycle: alternating periods of economics expansion and economic recession.
Responda
  • True
  • False

Questão 90

Questão
Long-run economic growth: the process by which rising productivity increases the average standard of living.
Responda
  • True
  • False

Questão 91

Questão
The best measurement for the standard of living is
Responda
  • GDP per person
  • real GDP per capita

Questão 92

Questão
This is the equation of growth of real GDP: Real GDP 2012 - Real GDP 2011 --------------------------------------------- x 100 Real GDP 2011
Responda
  • True
  • False

Questão 93

Questão
Rule of 70= the number of years to double. 70 ---------------- Growth rate
Responda
  • True
  • False

Questão 94

Questão
The quantity of goods and services that can be produced in one hour of work or by one worker
Responda
  • labor productivity
  • capital
  • potential GDP

Questão 95

Questão
The quantity of goods and services that can be produced in one hour of work or by one worker
Responda
  • labor productivity
  • capital
  • potential GDP

Questão 96

Questão
Manufactured goods that are used to produce goods and services.
Responda
  • capital
  • Financial markets

Questão 97

Questão
The level of real GDP attained when all firms are producing at capacity.
Responda
  • Potential GDP
  • Labor productivity

Questão 98

Questão
Markets where financial securities such as stocks and bonds are bought and sold.
Responda
  • financial markets
  • financial intermediaries

Questão 99

Questão
The system of financial markets and financial intermediaries through which firms gain funds from households.
Responda
  • Financial system
  • Financial market

Questão 100

Questão
Firms such as banks, mutual funds, pension funds, and insurance companies, that barrow funds from savers and lend then to borrowers.
Responda
  • Financial intermediaries
  • Financial advisors

Questão 101

Questão
The interaction of borrowers and lenders that determines the market interest rate and quantity of loanable funds exchanged.
Responda
  • Market for loanable funds
  • Crowding out

Questão 102

Questão
A decline in private expenditures as a result of an increase in Government purchases.
Responda
  • Crowding out
  • Crowding in

Questão 103

Questão
During a recession, durable goods decrease and undurable goods don't change because they are essential.
Responda
  • True
  • False

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