exam 2- econ 2305 - Assignment Essays

question

Public goods are subject to the principal of rival consumption.

answer

False

question

rival consumption

answer

the same unit of the good cannot be consumed by more than one person at the same time

question

Rival consumption means that one person's consumption does not reduce the amount available for others to consume.

answer

False.

question

Assume that a market is failing bc the good traded in the market is a public good. One way for the government to help move this market closer to the optimal quantity of output is to provide the good using Taxpayer dollars.

answer

True

question

Assume that a market is failing bc of adverse selection problems. One way for the government to help move this market closer to the optimal quantity of output is to pass legislation that requires buyers and sellers to disclose things they would rather not disclose.

answer

True

question

Assume that a market is failing bc of free-riders. One way for the government to help move this market closer to the optimal quantity of output is to collect taxes and use those dollars to produce the good.

answer

True

question

Use this table (notice that I've already calculated the inflation rates for you, so you don't need to do any calculations) to identify what this economy is experiencing in year 2.
Year Inflation Rate
1 (9.4%)
2 (1034%)

answer

Hyperinflation

question

Disinflation is desirable bc it means that we are getting close to price stability.

answer

True

question

Deflation occurs when the inflation rate is less than zero

answer

True

question

Since it is impossible to measure the aggregate price level, the best we can do is to measure the price of a subset of goods and hope that it reflects what is happening with the aggregate price.

answer

True

question

If the inflation rate is 10% and the real interest rate is 7% then the nominal interest rate is

answer

Real interest rate = Nominal interest rate- Inflation rate
Ans= 17%

question

Sally could buy a massage for $50 last year and her wage rate last year was $100 per hour. This year her wage rate is $200 per hour and a massage costs $75. Sally complains that massages are more expensive than before. Sally is experiencing

answer

Money Illusion (the face value of money is mistaken for its purchasing power at a previous point in time.)

question

Government intervention always improves market outcomes.

answer

False

question

Sometime the government intervenes in markets that were functioning efficiently.

answer

True.

question

Price ceilings have no benefits.

answer

False

question

You can think of a price ceiling as a lid that keeps prices from legally rising above the government's preferred level.

answer

True

question

The purpose of a price ceiling is to reduce the price of a product from its equilibrium level in order to help buyers.

answer

True

question

When the government promotes competition

answer

more traders are likely to occur

question

when deciding whether to support a price control, economists say that we should look at

answer

Both the benefits and the costs of the price control

question

During the Great Recession of 2009, real GDP per capita in U.S. fell.

answer

True

question

Real GDP per capita is correlated with many of the other things we care about, such as health and life expectancy.

answer

True

question

Real GDP

answer

the production of goods and services valued at constant prices

question

Real GDP per capita can be used to compare the standard of living in one country in different years.

answer

True

question

To compare our nation's output across time we have to substitute actual prices with a base year's prices so that we won't confuse inflation with output growth.

answer

True

question

Generally, as average per capita GDP increases, incomes of the very poor decrease.

answer

False

question

In the circular flow diagram, where are resources such as land and labor sold?

answer

resource markets (a market where a business can go and purchase resources to produce goods and services.)

question

In the circular flow diagram, when business firms borrow money in financial markets, they use that money to buy

answer

brand-new capital equipment

question

The circular flow diagram emphasizes the importance of markets in organizing economic activity in an economy.

answer

True

question

Business Firms borrow money so that they can buy brand new capital goods.

answer

True

question

For simplification, the circular flow diagrams that we use assume that all taxes are paid by

answer

Households

question

circular flow diagram

answer

a visual model of the economy that shows how dollars flow through markets among households and firms

question

Owners of capital equipment receive ____ when they sell these resources.

answer

Interest

question

Nominal GDP in Dogtopia was $6 trillion last year and $7 trillion this year.

answer

Since this question reports nominal GDP we can't tell what happened to output in Dogtopia over this period.

question

Real GDP in Catopia was $4 trillion last year and $7 trillion this year. Which one of the following is correct?

answer

Output in Catopia over this time period rose

question

The real price of oranges in Country A fell from $4 per pound last year to $2.56 per pound this year. Which one of the following is correct?

answer

Oranges are relatively less expensive this year in Country A

question

Scott received 12 paychecks last year, each for $10,000. To find his real income you should multiply $10,000 by 12.

answer

False. (multiplying $10,000 by 12 would give you Scott's nominal income.)

question

The real price of apples in Country Z rose from $4 per pond last year to $6 per pound this year. Which of the following is correct?

answer

Apples are relatively more expensive this year in Country Z.

question

Are intermediate goods included in GDP?

answer

question

Sowthwest Airlines expanded its fleet this year by buying 7 new airplanes that were produced by Airbus in Toulouse, France. Are these Airplanes included in the U.S.'s GDP?

answer

No bc they are imports

question

The lamp you bought last week in Arlington, TX, will be counted in The U.S. GDP for this current year.

answer

true; its a final good

question

Suppose we know the following: exports= $10; gross private domestic investment= $30; imports= $20, consumption expenditures= $60 ; government expenditures = $20. How big is GDP?

answer

$100 (GDP = private consumption + gross investment + government investment + government spending + (exports - imports).

question

If you buy a house in Arlington, TX in 2020 that was originally built in 1999, the purchase is included in 2020's GDP.

answer

False

question

You started a new company this year and hired an American contractor to design your company loge. Is the value of logo counted in our GDP?

answer

Yes

question

Assume that a market is failing bc the good traded in the market is produced using a common property resource. One way for the gvt to help move this market closer to the optimal quantity of output is to subsidize the purchase of this good.

answer

False

question

Assume that a market is failing bc the good traded in the market is a public good. One way for the gvt to help move this market closer to the optimal quantity of output is to pass legislation that requires buyers and sellers to disclose things they would rather not disclose.

answer

False

question

The GDP deflator measures the weighted average of a specified set of goods and services purchased by typical consumers in urban areas of the U.S.

answer

False

question

real GDP controls for

answer

change in prices

question

in circular flow diagram, households save in

answer

financial market

question

In circular flow diagram, business firms are sellers in ____ markets

answer

both resource and product

question

in teh circular flow diagram, households are sellers in

answer

resource market

question

The nominal price of grapes in Country A fell from $4 per pound last year to $2.56 per pound this year. Which one of the following is correct?

answer

Since this question reports the nominal price, we can't tell...

question

The Bureau of Economic Analysis (BEA) has to substract the value of intermediate goods from GDP bc otherwise it would look like we produced goods and services that actually came from another countries.

answer

False

question

Why isn't the delicious dinner that your roommate cooked for your birthday last night counted in this year's GDP?

answer

because it is a capital good

1 of 53

question

Public goods are subject to the principal of rival consumption.

answer

False

question

rival consumption

answer

the same unit of the good cannot be consumed by more than one person at the same time

question

Rival consumption means that one person's consumption does not reduce the amount available for others to consume.

answer

False.

question

answer

True

question

answer

True

question

answer

True

question

answer

Hyperinflation

question

Disinflation is desirable bc it means that we are getting close to price stability.

answer

True

question

Deflation occurs when the inflation rate is less than zero

answer

True

question

Since it is impossible to measure the aggregate price level, the best we can do is to measure the price of a subset of goods and hope that it reflects what is happening with the aggregate price.

answer

True

question

If the inflation rate is 10% and the real interest rate is 7% then the nominal interest rate is

answer

Real interest rate = Nominal interest rate- Inflation rate
Ans= 17%

question

answer

Money Illusion (the face value of money is mistaken for its purchasing power at a previous point in time.)

question

Government intervention always improves market outcomes.

answer

False

question

Sometime the government intervenes in markets that were functioning efficiently.

answer

True.

question

Price ceilings have no benefits.

answer

False

question

You can think of a price ceiling as a lid that keeps prices from legally rising above the government's preferred level.

answer

True

question

The purpose of a price ceiling is to reduce the price of a product from its equilibrium level in order to help buyers.

answer

True

question

When the government promotes competition

answer

more traders are likely to occur

question

when deciding whether to support a price control, economists say that we should look at

answer

Both the benefits and the costs of the price control

question

During the Great Recession of 2009, real GDP per capita in U.S. fell.

answer

True

question

Real GDP per capita is correlated with many of the other things we care about, such as health and life expectancy.

answer

True

question

Real GDP

answer

the production of goods and services valued at constant prices

question

Real GDP per capita can be used to compare the standard of living in one country in different years.

answer

True

question

To compare our nation's output across time we have to substitute actual prices with a base year's prices so that we won't confuse inflation with output growth.

answer

True

question

Generally, as average per capita GDP increases, incomes of the very poor decrease.

answer

False

question

In the circular flow diagram, where are resources such as land and labor sold?

answer

resource markets (a market where a business can go and purchase resources to produce goods and services.)

question

In the circular flow diagram, when business firms borrow money in financial markets, they use that money to buy

answer

brand-new capital equipment

question

The circular flow diagram emphasizes the importance of markets in organizing economic activity in an economy.

answer

True

question

Business Firms borrow money so that they can buy brand new capital goods.

answer

True

question

For simplification, the circular flow diagrams that we use assume that all taxes are paid by

answer

Households

question

circular flow diagram

answer

a visual model of the economy that shows how dollars flow through markets among households and firms

question

Owners of capital equipment receive ____ when they sell these resources.

answer

Interest

question

Nominal GDP in Dogtopia was $6 trillion last year and $7 trillion this year.

answer

Since this question reports nominal GDP we can't tell what happened to output in Dogtopia over this period.

question

Real GDP in Catopia was $4 trillion last year and $7 trillion this year. Which one of the following is correct?

answer

Output in Catopia over this time period rose

question

The real price of oranges in Country A fell from $4 per pound last year to $2.56 per pound this year. Which one of the following is correct?

answer

Oranges are relatively less expensive this year in Country A

question

Scott received 12 paychecks last year, each for $10,000. To find his real income you should multiply $10,000 by 12.

answer

False. (multiplying $10,000 by 12 would give you Scott's nominal income.)

question

The real price of apples in Country Z rose from $4 per pond last year to $6 per pound this year. Which of the following is correct?

answer

Apples are relatively more expensive this year in Country Z.

question

Are intermediate goods included in GDP?

answer

question

Sowthwest Airlines expanded its fleet this year by buying 7 new airplanes that were produced by Airbus in Toulouse, France. Are these Airplanes included in the U.S.'s GDP?

answer

No bc they are imports

question

The lamp you bought last week in Arlington, TX, will be counted in The U.S. GDP for this current year.

answer

true; its a final good

question

Suppose we know the following: exports= $10; gross private domestic investment= $30; imports= $20, consumption expenditures= $60 ; government expenditures = $20. How big is GDP?

answer

$100 (GDP = private consumption + gross investment + government investment + government spending + (exports - imports).

question

If you buy a house in Arlington, TX in 2020 that was originally built in 1999, the purchase is included in 2020's GDP.

answer

False

question

You started a new company this year and hired an American contractor to design your company loge. Is the value of logo counted in our GDP?

answer

Yes

question

answer

False

question

answer

False

question

The GDP deflator measures the weighted average of a specified set of goods and services purchased by typical consumers in urban areas of the U.S.

answer

False

question

real GDP controls for

answer

change in prices

question

in circular flow diagram, households save in

answer

financial market

question

In circular flow diagram, business firms are sellers in ____ markets

answer

both resource and product

question

in teh circular flow diagram, households are sellers in

answer

resource market

question

The nominal price of grapes in Country A fell from $4 per pound last year to $2.56 per pound this year. Which one of the following is correct?

answer

Since this question reports the nominal price, we can't tell...

question

answer

False

question

Why isn't the delicious dinner that your roommate cooked for your birthday last night counted in this year's GDP?

answer

because it is a capital good

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