HW 1 - Assignment Essays

question

Macroeconomic models:

answer

Make different assumptions to explain different aspects of the macroeconomy.

question

Macroeconomics does not try to answer the question of:

answer

What is the rate of return on education.

question

A typical trend during a recession is that:

answer

Income Falls

question

Macroeconomics is the study of the:

answer

Economy as a whole.

question

The ability of macroeconomists to predict the future course of economic events:

answer

Is no better than the meteorologist's ability to predict the next month's weather.

question

Which of the combinations listed is not a U.S. president and an important economic issue of his administration?

answer

President Clinton, inflation

question

All of the following are types of macroeconomics data except the:

answer

Price of an IBM computer.

question

The total income of everyone in the economy adjusted for the level of prices is called: (Q8)

answer

Real GDP (Q8)

question

The inflation rate is a measure of how fast:

answer

Prices in the economy are rising.

question

Two striking features of a graph of U.S. real GDP per capita over the twentieth century are the:

answer

Overall upward trend interrupted by a large downturn in the 1930s.

question

Recessions are periods when real GDP:

answer

Decreases mildly.

question

Compared with a recession, real GDP during a depression:

answer

Decreases more severely.

question

Deflation occurs when:

answer

Prices fall

question

A graph of the U.S. unemployment rate over the twentieth century shows:

answer

Rates of unemployment always greater than zero with substantial variations from year to year.

question

During the period between 1900 and 2000, the unemployment rate in the United States was highest in the:

answer

1930s

question

Endogenous variables are:

answer

Determined within the model.

question

Variables that a model tries to explain are called:

answer

Endogenous

question

Macroeconomic models are used to explain how ______ variables influence ______ variables.

answer

exogenous; endogenous

question

The assumption of flexible prices is a more plausible assumption when applied to price changes that occur:

answer

In the long run

question

Which of the following is the best example of a sticky price?

answer

The price of a soda in a vending machine

question

Which of the following is the best example of a flexible price?

answer

**The price of gasoline at a service station**

question

How does the distinction between flexible and sticky prices impact the study of macroeconomics?

answer

Flexible prices are typically assumed in the study of the long run, while sticky prices are assumed in the study of the short run.

question

If the adult population equals 250 million, of which 145 million are employed and 5 million are unemployed, the labor force participation rate equals ______ percent.

answer

60 (%)

question

In the United States since the end of World War II:

answer

The labor force participation rate of men has decreased, while the labor force participation rate of women has increased.

question

The economic statistic used to measure the level of prices is:

answer

CPI

question

Two equivalent ways to view GDP are as the:

answer

Total income of everyone in the economy or the total expenditure on the economy's output of goods and services.

question

Which of the following is a flow variable?

answer

Income

question

Which of the following is a stock variable?

answer

Wealth

question

GDP is the market value of all ______ goods and services produced within an economy in a given period of time. (Q29)

answer

Final (Q29)

question

Assume that a tire company sells 4 tires to an automobile company for $400, another company sells a compact disc player for $500, and the automobile company puts all of these items in or on a car that it sells for $20,000. In this case, the amount from these transactions that should be counted in GDP is:

answer

$20,000

question

To avoid double counting in the computation of GDP, only the value of ______ goods are included. (Q31)

answer

Final (Q31)

question

Real GDP means the value of goods and services is measured in ______ prices.

answer

Constant

question

The best measure of the economic satisfaction of the members of a society is: (Q33)

answer

Real GDP (Q33)

question

The GDP deflator is equal to:

answer

The ratio of nominal GDP to real GDP.

question

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 5 in 2009, then the GDP deflator in 2009, using a base year of 2002, was approximately:

answer

1.7

question

In the circular flow model, households receive income from the _____ market and save through the _____ market.

answer

factor; financial

question

In the long run, the level of national income in an economy is determined by its:

answer

Factors of production and production function.

question

The two most important factors of production are:

answer

Capital and labor

question

Unlike the real world, the classical model with fixed output assumes that:

answer

All factors of production are fully utilized.

question

The production function feature called "constant returns to scale" means that if we:

answer

Increase capital and labor by 10 percent each, we increase output by 10 percent.

question

The price received by each factor of production for its services is determined by:

answer

Demand and supply of factors.

question

When factor supply is fixed and quantity of the factor is graphed on the horizontal axis while factor price is graphed on the vertical axis, the factor:

answer

Supply curve is vertical.

question

The marginal product of labor is:

answer

Additional output produced when one additional unit of labor is added.

question

The property of diminishing marginal product means that, after a point, when additional quantities of:

answer

A factor are added when another factor remains fixed, the marginal product of the first factor diminishes.

question

A competitive, profit-maximizing firm hires labor until the:

answer

Price of output multiplied by the marginal product of labor equals the wage.

question

The real rental price of capital is the price per unit of capital measured in:

answer

Units of output

1 of 46

question

Macroeconomic models:

answer

Make different assumptions to explain different aspects of the macroeconomy.

question

Macroeconomics does not try to answer the question of:

answer

What is the rate of return on education.

question

A typical trend during a recession is that:

answer

Income Falls

question

Macroeconomics is the study of the:

answer

Economy as a whole.

question

The ability of macroeconomists to predict the future course of economic events:

answer

Is no better than the meteorologist's ability to predict the next month's weather.

question

Which of the combinations listed is not a U.S. president and an important economic issue of his administration?

answer

President Clinton, inflation

question

All of the following are types of macroeconomics data except the:

answer

Price of an IBM computer.

question

The total income of everyone in the economy adjusted for the level of prices is called: (Q8)

answer

Real GDP (Q8)

question

The inflation rate is a measure of how fast:

answer

Prices in the economy are rising.

question

Two striking features of a graph of U.S. real GDP per capita over the twentieth century are the:

answer

Overall upward trend interrupted by a large downturn in the 1930s.

question

Recessions are periods when real GDP:

answer

Decreases mildly.

question

Compared with a recession, real GDP during a depression:

answer

Decreases more severely.

question

Deflation occurs when:

answer

Prices fall

question

A graph of the U.S. unemployment rate over the twentieth century shows:

answer

Rates of unemployment always greater than zero with substantial variations from year to year.

question

During the period between 1900 and 2000, the unemployment rate in the United States was highest in the:

answer

1930s

question

Endogenous variables are:

answer

Determined within the model.

question

Variables that a model tries to explain are called:

answer

Endogenous

question

Macroeconomic models are used to explain how ______ variables influence ______ variables.

answer

exogenous; endogenous

question

The assumption of flexible prices is a more plausible assumption when applied to price changes that occur:

answer

In the long run

question

Which of the following is the best example of a sticky price?

answer

The price of a soda in a vending machine

question

Which of the following is the best example of a flexible price?

answer

**The price of gasoline at a service station**

question

How does the distinction between flexible and sticky prices impact the study of macroeconomics?

answer

Flexible prices are typically assumed in the study of the long run, while sticky prices are assumed in the study of the short run.

question

If the adult population equals 250 million, of which 145 million are employed and 5 million are unemployed, the labor force participation rate equals ______ percent.

answer

60 (%)

question

In the United States since the end of World War II:

answer

The labor force participation rate of men has decreased, while the labor force participation rate of women has increased.

question

The economic statistic used to measure the level of prices is:

answer

CPI

question

Two equivalent ways to view GDP are as the:

answer

Total income of everyone in the economy or the total expenditure on the economy's output of goods and services.

question

Which of the following is a flow variable?

answer

Income

question

Which of the following is a stock variable?

answer

Wealth

question

GDP is the market value of all ______ goods and services produced within an economy in a given period of time. (Q29)

answer

Final (Q29)

question

answer

$20,000

question

To avoid double counting in the computation of GDP, only the value of ______ goods are included. (Q31)

answer

Final (Q31)

question

Real GDP means the value of goods and services is measured in ______ prices.

answer

Constant

question

The best measure of the economic satisfaction of the members of a society is: (Q33)

answer

Real GDP (Q33)

question

The GDP deflator is equal to:

answer

The ratio of nominal GDP to real GDP.

question

answer

1.7

question

In the circular flow model, households receive income from the _____ market and save through the _____ market.

answer

factor; financial

question

In the long run, the level of national income in an economy is determined by its:

answer

Factors of production and production function.

question

The two most important factors of production are:

answer

Capital and labor

question

Unlike the real world, the classical model with fixed output assumes that:

answer

All factors of production are fully utilized.

question

The production function feature called "constant returns to scale" means that if we:

answer

Increase capital and labor by 10 percent each, we increase output by 10 percent.

question

The price received by each factor of production for its services is determined by:

answer

Demand and supply of factors.

question

When factor supply is fixed and quantity of the factor is graphed on the horizontal axis while factor price is graphed on the vertical axis, the factor:

answer

Supply curve is vertical.

question

The marginal product of labor is:

answer

Additional output produced when one additional unit of labor is added.

question

The property of diminishing marginal product means that, after a point, when additional quantities of:

answer

A factor are added when another factor remains fixed, the marginal product of the first factor diminishes.

question

A competitive, profit-maximizing firm hires labor until the:

answer

Price of output multiplied by the marginal product of labor equals the wage.

question

The real rental price of capital is the price per unit of capital measured in:

answer

Units of output

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