Macro Eco- 2 - Assignment Essays

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1. Economists use the term "business cycle" to refer to

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c. fluctuations in economic activity, measured by GDP or unemployment.

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2. The labor force participation rate of women in the United States has been

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a. increasing for several decades.

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3. Suppose there was a country with a population of 300 million, of which 140 million were unemployed and 12 million were employed. Which of the following is true?

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d. There are 152 individuals in this country's labor force.

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4. An individual should continue to spend time searching for a job as long as

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b. the marginal gain from additional search exceeds the marginal cost.

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5. Which of the following persons would be considered unemployed by the official government definition?

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d. An auto worker vacationing in Florida during a layoff at a General Motors plant due to an annual change-over in models

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6. Which of the following would increase GDP?

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b. Mercedes-Benz begins to produce and sell cars in Alabama.

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7. When the expenditure approach is used to measure GDP, the major components of GDP are

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d. consumption, investment, government consumption and gross investment, and net exports.

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8. Assume that between 1990 and 1998 nominal GDP increased from $5 trillion to $8.3 trillion and that the price index rose from 100 to 140. Which of the following expresses GDP for 1990 in terms of 1998 prices?

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b. $7 trillion

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9. Which of the following would not be counted as part of this year's GDP?

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b. the government bond you receive as a birthday present

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10. The GDP deflator is designed to

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c. adjust nominal GDP for changes in the price level.

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11. Which of the following best describes the difference between gross domestic product (GDP) and gross national product (GNP)?

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a. GDP measures output produced within domestic borders, while GNP measures output produced by domestic citizens.

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12. Suppose that, in dollar terms, GDP increased by approximately 8 percent during a given year, but real GDP increased 5 percent. Which of the following best explains these events?

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c. Prices increased by approximately 3 percent.

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13. If waitresses and taxi drivers do not report all of their income to the government, GDP will be understated. This is because the unreported income

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b. is part of the underground economy.

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14. The primary value of GDP is

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a. its ability to reflect the output rate of a nation.

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15. National income is

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c. the total income payments to the owners of human (labor) and physical capital during a period.

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16. The period between a business cycle peak and a business cycle trough is called

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c. recession.

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17. Consider the data in the table above for the United States for May 2013. The unemployment rate equaled:

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7.4%

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18. The growth rate of real GDP rises from 4% to 5% per year, then the number of years required to double real GDP will decrease from

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a. 17.5 to 14.0

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19. During a business cycle expansion, total production ______ and total employment _____.

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d. increases; increases.

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20. Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as:

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d. not in the labor force.

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21. What two factors are the keys to determining labor productivity?

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a. technology and the quantity of capital per hour worked.

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22. The CPI was 117.7 in 2011 and 121.4 in 2012. The inflation rate for 2012 was:

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a. 3.1%

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23. The nominal interest rate is 6.5% and the inflation rate is 3.0%, what is the real rate of interest?

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d. 3.5%

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24. If real GDP per capita doubles between 2005 and 2020, what is the average annual growth rate of real GDP per capita?

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a. 4.7%

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25. During the expansion phase of the business cycle, which of the following eventually increases?

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d. all of the above

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26. Gross national product, GNP, of the United States is the market value of all final goods and services

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a. produced by residents of the United States anywhere in the world.

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27. Which of the following is not directly counted in GDP?

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b. intermediate goods.

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28. Disposable personal income equals personal income

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c. minus personal tax payments plus government transfer payments.

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29. Economists consider full employment to occur when

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b. frictional exist.

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30. The period between a business cycle peak and a business cycle trough is called

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b. recession

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31. Which of the following could cause nominal GDP to increase, but real GDP to decrease?

answer

b. The price level rises and the quantity of final goods and services produced falls.

question

32. Which of the following accurately describes the impact of the rule of law on a country's economic growth rate?

answer

a. Countries with a strong rule of law have faster economic growth.

question

33. Increasing growth rates of GDP per capita and sustaining these growth rates in an economy can

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c. increase standards of living.

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34. How do lower personal income taxes affect aggregate demand?

answer

c. They increase disposable income, consumption, and aggregate demand.

question

35. An example of business investment spending is:

answer

a. A purchase of a computer by an accounting firm.

question

36. If your nominal wage rises faster than the price level, we can say your real wage has _______ and the purchasing power of your income has __________.

answer

d. fallen; fallen.

question

37. A student who just graduated from college but has not found a job would most likely be:

answer

c. frictionally unemployed.

question

38. What two factors are the keys to determining labor productivity?

answer

a. technology and the quantity of capital per hour worked.

question

39. The labor force equals the number of people

answer

c. employed plus unemployed.

question

40. Disease, poor nutrition, and substandard health care in developing nations can reduce growth in an economy by:

answer

b. reducing human capital.

1 of 40

question

1. Economists use the term "business cycle" to refer to

answer

c. fluctuations in economic activity, measured by GDP or unemployment.

question

2. The labor force participation rate of women in the United States has been

answer

a. increasing for several decades.

question

3. Suppose there was a country with a population of 300 million, of which 140 million were unemployed and 12 million were employed. Which of the following is true?

answer

d. There are 152 individuals in this country's labor force.

question

4. An individual should continue to spend time searching for a job as long as

answer

b. the marginal gain from additional search exceeds the marginal cost.

question

5. Which of the following persons would be considered unemployed by the official government definition?

answer

d. An auto worker vacationing in Florida during a layoff at a General Motors plant due to an annual change-over in models

question

6. Which of the following would increase GDP?

answer

b. Mercedes-Benz begins to produce and sell cars in Alabama.

question

7. When the expenditure approach is used to measure GDP, the major components of GDP are

answer

d. consumption, investment, government consumption and gross investment, and net exports.

question

answer

b. $7 trillion

question

9. Which of the following would not be counted as part of this year's GDP?

answer

b. the government bond you receive as a birthday present

question

10. The GDP deflator is designed to

answer

c. adjust nominal GDP for changes in the price level.

question

11. Which of the following best describes the difference between gross domestic product (GDP) and gross national product (GNP)?

answer

a. GDP measures output produced within domestic borders, while GNP measures output produced by domestic citizens.

question

12. Suppose that, in dollar terms, GDP increased by approximately 8 percent during a given year, but real GDP increased 5 percent. Which of the following best explains these events?

answer

c. Prices increased by approximately 3 percent.

question

13. If waitresses and taxi drivers do not report all of their income to the government, GDP will be understated. This is because the unreported income

answer

b. is part of the underground economy.

question

14. The primary value of GDP is

answer

a. its ability to reflect the output rate of a nation.

question

15. National income is

answer

c. the total income payments to the owners of human (labor) and physical capital during a period.

question

16. The period between a business cycle peak and a business cycle trough is called

answer

c. recession.

question

17. Consider the data in the table above for the United States for May 2013. The unemployment rate equaled:

answer

7.4%

question

18. The growth rate of real GDP rises from 4% to 5% per year, then the number of years required to double real GDP will decrease from

answer

a. 17.5 to 14.0

question

19. During a business cycle expansion, total production ______ and total employment _____.

answer

d. increases; increases.

question

20. Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as:

answer

d. not in the labor force.

question

21. What two factors are the keys to determining labor productivity?

answer

a. technology and the quantity of capital per hour worked.

question

22. The CPI was 117.7 in 2011 and 121.4 in 2012. The inflation rate for 2012 was:

answer

a. 3.1%

question

23. The nominal interest rate is 6.5% and the inflation rate is 3.0%, what is the real rate of interest?

answer

d. 3.5%

question

24. If real GDP per capita doubles between 2005 and 2020, what is the average annual growth rate of real GDP per capita?

answer

a. 4.7%

question

25. During the expansion phase of the business cycle, which of the following eventually increases?

answer

d. all of the above

question

26. Gross national product, GNP, of the United States is the market value of all final goods and services

answer

a. produced by residents of the United States anywhere in the world.

question

27. Which of the following is not directly counted in GDP?

answer

b. intermediate goods.

question

28. Disposable personal income equals personal income

answer

c. minus personal tax payments plus government transfer payments.

question

29. Economists consider full employment to occur when

answer

b. frictional exist.

question

30. The period between a business cycle peak and a business cycle trough is called

answer

b. recession

question

31. Which of the following could cause nominal GDP to increase, but real GDP to decrease?

answer

b. The price level rises and the quantity of final goods and services produced falls.

question

32. Which of the following accurately describes the impact of the rule of law on a country's economic growth rate?

answer

a. Countries with a strong rule of law have faster economic growth.

question

33. Increasing growth rates of GDP per capita and sustaining these growth rates in an economy can

answer

c. increase standards of living.

question

34. How do lower personal income taxes affect aggregate demand?

answer

c. They increase disposable income, consumption, and aggregate demand.

question

35. An example of business investment spending is:

answer

a. A purchase of a computer by an accounting firm.

question

36. If your nominal wage rises faster than the price level, we can say your real wage has _______ and the purchasing power of your income has __________.

answer

d. fallen; fallen.

question

37. A student who just graduated from college but has not found a job would most likely be:

answer

c. frictionally unemployed.

question

38. What two factors are the keys to determining labor productivity?

answer

a. technology and the quantity of capital per hour worked.

question

39. The labor force equals the number of people

answer

c. employed plus unemployed.

question

40. Disease, poor nutrition, and substandard health care in developing nations can reduce growth in an economy by:

answer

b. reducing human capital.

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