question

national income

answer

The total amount of income earned by U.S. resource suppliers in a year, plus taxes on production and imports, is measured by: gross domestic product. national income. personal income. disposable income.

question

False

answer

T/F: The rule of 70 is used to find how long it will take an economy to grow by 70 percent.

question

disposable income

answer

In a typical year, which of the following measures of aggregate output and income is likely to be the smallest? gross domestic product national income disposable income personal income

question

understate economic welfare because it does not take into account increases in leisure.

answer

The GDP tends to: overstate economic welfare because it does not include certain nonmarket activities such as the productive work of housewives. understate economic welfare because it includes expenditures undertaken to offset or correct pollution. understate economic welfare because it does not take into account increases in leisure. overstate economic welfare because it does not reflect improvements in product quality.

question

rise by about 1 percent

answer

Suppose that a person's nominal income rises by 5 percent and the price level rises from 125 to 130. The person's real income will: fall by about 1 percent. remain constant. rise by about 4 percent. rise by about 1 percent.

question

promote economic growth by helping to direct household saving to businesses that want to invest.

answer

Banks and other financial institutions: are the primary investors in equipment, factories, and other capital goods. lack relevance in the modern economy because they focus primarily on financial assets and generally do not engage in real investment activity. promote economic growth by helping to direct household saving to businesses that want to invest. often hinder economic activity by creating barriers between household savers and firms wanting to invest in capital goods.

question

transfer payments exceeded the sum of Social Security contributions, corporate income taxes, and undistributed corporate profits

answer

If personal income exceeds national income in a particular year, we can conclude that: transfer payments exceeded the sum of Social Security contributions, corporate income taxes, and taxes on production and imports. the sum of Social Security contributions, corporate income taxes, and undistributed corporate profits exceeded transfer payments. consumption of fixed capital and taxes on production and imports exceeded personal taxes. transfer payments exceeded the sum of Social Security contributions, corporate income taxes, and undistributed corporate profits.

question

income received by households less personal taxes

answer

Which of the following best defines disposable income? income received by households less personal taxes the before-tax income received by households all income earned by resource suppliers for their current contributions to production the market value of the annual output net of consumption of fixed capital

question

labor productivity must be $0.5

answer

Suppose total output (real GDP) is $10,000 and worker-hours are 20,000. We can conclude that: real GDP per capita must be $200,000. the price-level index must be less than 100. labor productivity must be $0.5. nominal GDP must be between $10,000 and $20,000.

question

inflation premium is zero

answer

If both the real interest rate and the nominal interest rate are 3 percent, then the: inflation premium is zero. real GDP must exceed the nominal GDP. nominal GDP must exceed real GDP. inflation premium also is 3 percent.

question

changes in nominal GDP understate changes in real GDP.

answer

In an economy experiencing a persistently falling price level: potential GDP will necessarily exceed actual GDP. changes in nominal GDP may either overstate or understate changes in real GDP. changes in nominal GDP understate changes in real GDP. changes in nominal GDP overstate changes in real GDP.

question

conclude that its average annual rate of growth is about 4 percent.

answer

If the economy's real GDP doubles in 18 years, we can: not say anything about the average annual rate of growth. conclude that its average annual rate of growth is about 5.5 percent. conclude that its average annual rate of growth is about 2 percent. conclude that its average annual rate of growth is about 4 percent.

question

tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs.

answer

Economic growth rates in follower countries: tend to be lower than in leader countries because labor forces in follower countries are too small. tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs. will never bring real GDP per capita up to the same levels as in leader countries, even if follower growth rates are greater than those in leader countries. typically average about 2 percent per year.

question

innovations in computers and communications, together with global capitalism, are greatly boosting U.S. productivity and the economy's potential economic growth rate.

answer

Economists who believe that the recent rise in the average rate of productivity growth will be long lasting say that: the United States is entering an era of high structural unemployment due to rapid technological change. technological advance creates its own supply, which in turn creates its own demand. innovations in computers and communications, together with global capitalism, are greatly boosting U.S. productivity and the economy's potential economic growth rate. technological change will require more central planning and government regulation.

question

the purchase of a new house

answer

101 Which of the following do national income accountants consider to be investment? the purchase of an automobile for private, non-business use the purchase of a new house the purchase of corporate bonds the purchase of gold coins

question

the price level may change over time

answer

In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because: of changes in trade deficits and surpluses. the length of the workweek has declined historically. the price level may change over time. depreciation may be greater or smaller than gross investment.

question

both the level and distribution of income

answer

Inflation affects: both the level and the distribution of income. neither the level nor the distribution of income. the distribution, but not the level, of income. the level, but not the distribution, of income.

question

that rate of unemployment occurring when the economy is at its potential output.

answer

The natural rate of unemployment is: higher than the full-employment rate of unemployment. lower than the full-employment rate of unemployment. that rate of unemployment occurring when the economy is at its potential output. found by dividing total unemployment by the size of the labor force.

question

True

answer

T/F: Economic growth can be shown as a movement from a point on one production possibility curve to a point on a curve located farther from the origin.

question

While these systems are credited with reducing business cycle severity prior to the recession of 2007-2009, some economists believe that they contributed to the suddenness and severity of the 2007-2009 recession

answer

Which of the following statements is true about computerized inventory tracking systems and the severity of recessions? While these systems are credited with reducing business cycle severity prior to the recession of 2007-2009, some economists believe that they contributed to the suddenness and severity of the 2007-2009 recession. These systems are credited with reducing business cycle severity prior to the recession of 2007-2009, and for greatly reducing the severity of the 2007-2009 recession. These systems are generally held responsible for magnifying recessions over the past 25 years by rapidly signaling to firms the need to cut production. These systems are generally thought to change the timing of recessions, but not to affect the overall severity of declines in output and employment.

question

productive but is excluded from GDP because no market transaction occurs.

answer

Tom Atoe grows fruits and vegetables for home consumption. This activity is: excluded from GDP in order to avoid double counting. excluded from GDP because an intermediate good is involved. productive but is excluded from GDP because no market transaction occurs. included in GDP because it reflects production.

question

business cycles.

answer

1 Recurring upswings and downswings in an economy's real GDP over time are called: recessions. business cycles. output yo-yos. total product oscillations.

question

the long-term expansion or contraction of business activity that occurs over 50 or 100 years.

answer

2 As it relates to economic growth, the term long-run trend refers to: the long-run increase in the relative importance of durable goods in the U.S. economy. incorrect? the long-term expansion or contraction of business activity that occurs over 50 or 100 years. fluctuations in business activity that average 40 months in duration. fluctuations in business activity that occur around Christmas, Easter, and other major holidays.

question

capital goods and durable consumer goods

answer

4 The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are: military goods and capital goods. services and nondurable consumer goods. clothing and education. capital goods and durable consumer goods.

question

cyclical unemployment is about 2 percent

answer

10 Answer the below question on the basis of the following information about the hypothetical economy of Scoob. All figures are in millions. Unemployed: 7 Total Population: 145 Employed: 95 Discouraged workers: 3 If the natural rate of unemployment in Scoob is 5 percent, then: structural unemployment is about 3 percent. frictional unemployment is about 2 percent. cyclical unemployment is about 2 percent. hidden unemployment is about 5 percent.

question

about 4-5 percent of the labor force is unemployed.

answer

11 The United States' economy is considered to be at full employment when: about 4-5 percent of the total population is unemployed. 90 percent of the labor force is employed. about 4-5 percent of the labor force is unemployed. 100 percent of the labor force is employed.

question

be in the labor force

answer

14 According to the Bureau of Labor Statistics, to be officially unemployed a person must: be in the labor force. be 21 years of age or older. have lost a job. be waiting to be called back from a layoff.

question

employed workers and persons who are officially unemployed.

answer

16 The labor force includes: employed workers and persons who are officially unemployed. employed workers, but excludes persons who are officially unemployed. full-time workers, but excludes part-time workers. permanent employees, but excludes temporary employees.

question

teenagers is much higher than that of adults

answer

17 The unemployment rate of: women greatly exceeds that of men. whites is roughly equal to that of African-Americans. managerial and professional workers exceeds that of construction and extraction workers. teenagers is much higher than that of adults.

question

6 percent

answer

22 Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are employed, the unemployment rate is: 3 percent. 6 percent. 7 percent. 53 percent.

question

The unemployment rates of men and women workers are roughly the same.

answer

28 Which of the following is correct? The unemployment rates of men and women workers are roughly the same. Unemployment rates for African-American and white workers are approximately the same. Teenagers experience approximately the same unemployment rates as do adults. Laborers are less vulnerable to unemployment than are professional workers.

question

may involve a locational mismatch between unemployed workers and job openings.

answer

30 Structural unemployment: is also known as frictional unemployment. is the main component of cyclical unemployment. is said to occur when people are waiting to be called back to previous jobs. may involve a locational mismatch between unemployed workers and job openings.

question

employed

answer

31 Dr. Homer Simpson, an economics professor, decided to take a year off from teaching to run a commercial fishing boat in Alaska. That year, Professor Simpson would be officially counted as: structurally unemployed. frictionally unemployed. not in the labor force. employed.

question

Bureau of Labor Statistics

answer

34 The government agency responsible for collecting and reporting unemployment data is the: Bureau of Labor Statistics. Bureau of Unemployment. Bureau of Economic Analysis. Bureau of Economic Research.

question

$320 billion.

answer

44 If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential GDP is: $360 billion. $660 billion. $320 billion. $20 billion.

question

the economy had moved from a point inside its production possibilities curve to a point on or near the curve.

answer

51 If the unemployment rate in the above economy fell to 6 percent, we could conclude that: only structural unemployment remained. the economy's production possibilities curve shifted outward. the economy had moved from a point inside its production possibilities curve to a point on or near the curve. nominal GDP would rise but real GDP would fall.

question

dividing the annual rate of inflation into "70."

answer

56 As applied to the price level, the "rule of 70" indicates that the number of years required for the price level to double can be found by: dividing "70" into the annual rate of inflation. dividing the annual rate of inflation into "70." subtracting the annual change in nominal incomes from "70." multiplying the annual rate of inflation by "70."

question

8-9 years

answer

58 If Fred's annual real income rises by 8 percent each year, his annual real income will double in about: 8-9 years. 10-11 years. 5-6 years. 19-20 years.

question

6 years

answer

59 If the rate of inflation is 12 percent per year, the price level will double in about: 4 years. 6 years. 10 years. 12 years.

question

neither significantly higher nor significantly lower.

answer

60 Compared to other industrial nations, inflation rates in the United States are: significantly higher. significantly lower. significantly higher than those in Europe, and significantly lower than those in Japan. neither significantly higher nor significantly lower.

question

is self limiting

answer

62 Unlike demand-pull inflation, cost-push inflation: is self-limiting. drives up the price level. increases nominal income. increases real income.

question

moves the economy inward from its production possibilities curve.

answer

63 Cost-push inflation: is caused by excessive total spending. shifts the nation's production possibilities curve leftward. moves the economy inward from its production possibilities curve. is a mixed blessing because it has positive effects on real output and employment.

question

Demand-pull inflation

answer

65 Which of the following would most likely occur during the expansionary phase of the business cycle? Demand-pull inflation Cost-push inflation Structural inflation Frictional inflation

question

real income approximates percentage change in nominal income minus percentage change in price level.

answer

66 Which of the following formulas is correct? Percentage change in: price level approximates percentage change in real income minus percentage change in nominal income. real income approximates percentage change in nominal income minus percentage change in price level. nominal income approximates percentage change in price level minus percentage change in real income. real income approximates percentage change in price level minus percentage change in nominal income.

question

taxation through inflation

answer

80 The feudal practice of clipping coins illustrates the idea of: taxation through inflation. good money driving out bad money. the derived demand for resources. cost-push inflation.

question

follow the long-run course of the economy to determine whether it has grown or stagnated.

answer

81 The National Income and Product Accounts (NIPA) help economists and policymakers to: determine which firms are likely to succeed or fail. follow the long-run course of the economy to determine whether it has grown or stagnated. measure what is occurring in each specific labor market. accomplish all of these.

question

the difference between the value of a firm's output and the value of the inputs it has purchased from others.

answer

93 Value added refers to: any increase in GDP that has been adjusted for adverse environmental effects. the excess of gross investment over net investment. the difference between the value of a firm's output and the value of the inputs it has purchased from others. the portion of any increase in GDP that is caused by inflation as opposed to an increase in real output.

question

$30

answer

94 Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker. The completed speaker sells for $70. The value added by the manufacturer for each speaker is: $110. $30. $40. $70.

question

net investment is negative.

answer

97 If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that: nominal GDP is rising but real GDP is declining. net investment is negative. the economy is importing more than it exports. the economy's production capacity is expanding.

question

automobiles for personal use, but not houses

answer

99 In national income accounting, consumption expenditures include purchases of: both new and used consumer goods. automobiles for personal use, but not houses. consumer durable and nondurable goods, but not services. consumer nondurable goods and services, but not consumer durable goods.

question

government consumption goods and public capital goods

answer

103 Government purchases include government spending on: government consumption goods and public capital goods. government consumption goods only. public capital goods only. government consumption goods, public capital goods, and transfer payments.

question

excluded when calculating GDP because they do not reflect current production.

answer

104 Transfer payments are: excluded when calculating GDP because they only reflect inflation. excluded when calculating GDP because they do not reflect current production. included when calculating GDP because they are a category of investment spending. included when calculating GDP because they increase the spending of recipients.

question

subtracted from exports when calculating GDP because imports do not constitute production in the United States.

answer

105 The value of U.S. imports is: added to exports when calculating GDP because imports reflect spending by Americans. subtracted from exports when calculating GDP because imports do not constitute spending by Americans. subtracted from exports when calculating GDP because imports do not constitute production in the United States. added when calculating GDP because imports do not constitute production in the United States.

question

$116

answer

108

question

$392

answer

109

question

$314

answer

111

question

$274

answer

112

question

$580

answer

117

question

$14

answer

121

question

the total of all sources of private income plus government revenue from taxes on production and imports.

answer

127 National income measures: nominal GDP after it has been inflated or deflated for changes in the value of the dollar. the after-tax income of resource suppliers. the total of all sources of private income plus government revenue from taxes on production and imports. the amount of wage, rent, interest, and profits income actually received by households.

question

nominal GDP overstates increases in real output

answer

138 For the years shown, the growth of: real GDP has exceeded the growth of nominal GDP. nominal GDP accurately reflects changes in real output. nominal GDP overstates increases in real output. nominal GDP understates increases in real output.

question

$115.

answer

142 Answer the below question on the basis of the following information: Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit prices of these three goods are A = $2, B = $3, and C = $1. Nominal GDP in the current year is: $110. $115. $45. $90.

question

Rising Real GDP

answer

145

question

the child-care services provided by stay-at-home parents

answer

153 Which of the following activities is excluded from GDP, causing GDP to understate a nation's well-being? the services of used-car dealers the child-care services provided by stay-at-home parents the construction of new houses government expenditures on military equipment

question

inflow from the river is gross investment.

answer

158 When making a capital stock and reservoir analogy, the: outflow below the dam is the stock of capital. inflow from the river is gross investment. level of water in the reservoir is depreciation. level of water in the reservoir is net investment.

question

303 in year 3 in Zorn

answer

166

question

$42,300

answer

173 Real Per Capita GDP in the United States in 2009 was approximately: $12,900 $39,800 $42,300 $13 trillion

question

Africa

answer

176 Which of the following economic regions has experienced the least growth in real GDP per capita since 1820? Africa Asia excluding Japan Latin America Western Europe

question

Unrestricted trade between nations

answer

181 Which of the following institutional arrangements is most likely to promote growth? Patents and copyrights that expire quickly and are loosely enforced. Strong government control over resource allocation decisions. Unrestricted trade between nations. All of these.

question

total output/worker-hours

answer

189 Labor productivity is defined as: total output/worker-hours. nominal GDP minus real GDP. the ratio of real capital to worker-hours. the annual increase in nominal GDP per worker.

question

increased the average productivity of labor.

answer

201 The historical reallocation of labor from agriculture to manufacturing in the United States has: been inflationary. had no effect on the average productivity of labor. increased the average productivity of labor. reduced the average productivity of labor.

question

23 years

answer

208 If the growth trend of labor productivity is 3 percent per year, the number of years that it will take for the standard of living to double will be about: 15 years. 17 years. 20 years. 23 years.

question

microchip.

answer

212 The fundamental invention underpinning the recent rise in the average rate of productivity growth is the: microchip. fuel cell. Internet. personal computer.

question

Economists who support economic growth say that it is the most practical route to the higher standards of living that the vast majority of people desire.

answer

216 Which of the following is a true statement? Economists who support economic growth say that it is the most practical route to the higher standards of living that the vast majority of people desire. Most economists believe that the recent rise in the average rate of productivity growth implies an end to the business cycle. Most economists believe that increases in real GDP actually produce decreases in overall economic well-being because of spillover costs. Mainstream economists disagree as to whether the rate of productivity growth was higher between 1995 and 2009 or between 1973 and 1995.

question

$1 billion

answer

219 According to the Consider This box on patents and innovation, the cost for U.S. and European drug companies to research, patent, and safety-test a new drug is about: $100 million. $750 million. $1 billion. $10 billion.

question

True

answer

226 T/F: Modern economic growth since the 1820s has widened wealth and income disparities between richer and poorer nations.

question

False

answer

228 T/F: Strong property rights inhibit economic growth by strictly regulating economic behavior.

question

True

answer

230 T/F: A competitive market system promotes growth by providing producers with market signals on which to base investment and production decisions.

question

False

answer

240 T/F: Proponents of economic growth claim that growth leads to greater equality of income in an economy.

question

Firms may be reluctant to change prices for fear of setting off a price war or losing customers to rivals.

answer

242 Which of the following best explains why prices tend to be inflexible even when demand changes? Government regulations limit the number of times a firm can change prices in a year. In most industries the profit-maximizing price does not change even when demand changes. Production costs do not tend to change when a firm varies its level of output. Firms may be reluctant to change prices for fear of setting off a price war or losing customers to rivals.

question

short-run fluctuations in output and employment.

answer

243 The business cycle depicts: fluctuations in the general price level. the phases a business goes through from when it first opens to when it finally closes. the evolution of technology over time. short-run fluctuations in output and employment.

question

when there are widespread macroeconomic and monetary disturbances in the economy.

answer

245 Prices are particularly sticky: when there are widespread macroeconomic and monetary disturbances in the economy. in the long run. when markets are highly competitive. when the economy is at full employment and positive demand shocks are occurring.

question

capital

answer

3 In which of the following industries or sectors of the economy will business cycle fluctuations likely have the greatest effect on output? military goods capital goods textile products agricultural commodities

question

an unexpected change in the level of total spending.

answer

7 Most economists agree that the immediate cause of most business cycle variation is: an unexpected change in the productivity of workers. an unexpected change in the level of total spending. the invention of new products. the growth and subsequent bursting of financial bubbles.

question

fully employed and therefore the official unemployment rate may understate the level of unemployment.

answer

21 Part-time workers are counted as: unemployed and therefore the official unemployment rate may overstate the level of unemployment. unemployed and therefore the official unemployment rate may understate the level of unemployment. fully employed and therefore the official unemployment rate may overstate the level of unemployment. fully employed and therefore the official unemployment rate may understate the level of unemployment.

question

frictionally

answer

24 Assume that Kyle is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Kyle will be considered as: cyclically unemployed. frictionally unemployed. structurally unemployed. employed.

question

actual and potential

answer

40 The GDP gap measures the difference between: NDP and GDP. NI and PI. actual GDP and potential GDP. nominal GDP and real GDP.

question

8

answer

47 Assume the natural rate of unemployment in the U.S. economy is 5 percent and the actual rate of unemployment is 9 percent. According to Okun's law, the negative GDP gap as a percent of potential GDP is: 4 percent. 8 percent. 10 percent. 2 percent.

question

24

answer

50 The amount of output being forgone by the above economy is: $12 billion. $15 billion. $18 billion. $24 billion.

question

Nominal income falls by 2 percent, and the price level falls by 10 percent.

answer

71 Under which of the following circumstances would we observe the greatest increase in real income? Nominal income falls by 2 percent, and the price level falls by 10 percent. Nominal income rises by 8 percent, and the price level rises by 4 percent. Nominal income rises by 12 percent, and the price level rises by 15 percent. Nominal income falls by 4 percent, and the price level rises by 6 percent.

question

a firm's output less the value of the inputs bought from others

answer

90 The value added of a firm is the market value of: a firm's output plus the value of the inputs bought from others. a firm's output less the value of the inputs bought from others. the firm's output. the firm's inputs bought from others.

question

190

answer

102 Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories fell by $10 billion. GDP in year 2 is: $180 billion. $190 billion. $200 billion. $210 billion.

question

national

answer

125 The total amount of income earned by U.S. resource suppliers in a year, plus taxes on production and imports, is measured by: gross domestic product. national income. personal income. disposable income.

question

real GDP may either rise or fall.

answer

139 If nominal GDP rises: real GDP may either rise or fall. we can be certain that the price level has risen. real GDP must fall. real GDP must also rise.

question

price level may change over time

answer

141 In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because: of changes in trade deficits and surpluses. the length of the workweek has declined historically. the price level may change over time. depreciation may be greater or smaller than gross investment.

question

stock, whereas gross investment and depreciation are flows.

answer

159 Capital is a: flow, whereas gross investment and depreciation are stocks. flow, as are gross investment and depreciation. stock, as are gross investment and depreciation. stock, whereas gross investment and depreciation are flows.

question

calculate the number of years required for real GDP to double

answer

167 Given the annual rate of economic growth, the "rule of 70" allows one to: determine the accompanying rate of inflation. calculate the size of the GDP gap. calculate the number of years required for real GDP to double. determine the growth rate of per capita GDP.

question

dividing 70 by the annual growth rate

answer

168 The number of years required for real GDP to double can be found by: dividing the annual growth rate by .07. multiplying the annual growth rate by 70. dividing 70 by the annual growth rate. adding 14 to annual growth rate.

question

multiplier effect

answer

211 All of the following are sources of increasing returns and economies of scale except: network effects. the multiplier effect. learning-by-doing. simultaneous consumption.

question

direct relationship between

answer

217 Proponents of economic growth make all of the following arguments except: Growth is the basic means of improving living standards. It is easier to reduce poverty when the economy is growing than when it is not. There is a direct relationship between a growing real GDP and rising pollution. Growth provides an economic environment favorable to education and self-fulfillment.

question

percentage of married women in the workforce

answer

222 Rising wages for women in the United States have increased: the proportion of women working part time compared to working full time. labor costs and thus shifted the nation's production possibilities curve inward. average family size in the United States. the percentage of married women in the workforce.

question

True

answer

233 T/F: Economic growth can be shown as a movement from a point on one production possibility curve to a point on a curve located farther from the origin.

question

False

answer

237 T/F: Because of the recent rise in the average rate of productivity growth, the business cycle is dead.

question

construction

answer

5 During a severe recession, we would expect output to fall the most in: the healthcare industry. the clothing industry. agriculture. the construction industry.

question

decline

answer

26 Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, all else equal, the official unemployment rate would: decline. increase. increase in the short run but eventually decline. be unchanged.

question

the economy achieves its potential output.

answer

35 At the economy's natural rate of unemployment: the economy achieves its potential output. there is only a relatively small amount of cyclical unemployment. only frictional unemployment exists. only structural unemployment exists.

question

1.6

answer

54 The consumer price index was 177.1 in 2001 and 179.9 in 2002. Therefore, the rate of inflation in 2002 was about: 2.8 percent. 3.4 percent. 1.6 percent. 4.1 percent.

question

last year's price index from this year's price index and dividing the difference by last year's price index.

answer

55 The annual rate of inflation can be found by subtracting: the real income from the nominal income. last year's price index from this year's price index. this year's price index from last year's price index and dividing the difference by this year's price index. last year's price index from this year's price index and dividing the difference by last year's price index.

question

neg supply shock

answer

64 Cost-push inflation may be caused by: a decline in per unit production costs. a decrease in wage rates. a negative supply shock. an increase in resource availability.

question

Nominal income rises by 2 percent, and the price level remains unchanged.

answer

70 in which of the following cases would real income rise? Nominal income rises by 8 percent, and the price level rises by 10 percent. Nominal income rises by 2 percent, and the price level remains unchanged. Nominal income falls by 4 percent, and the price level falls by 2 percent. Real income will rise in all of these cases.

question

monetary value of all final goods and services produced within the borders of a nation in a particular year.

answer

83 GDP is the: national income minus all non-income charges against output. monetary value of all final goods and services produced within the borders of a nation in a particular year. monetary value of all economic resources used in producing a year's output. monetary value of all goods and services, final and intermediate, produced in a specific year.

question

summing corporate income taxes, dividends, and undistributed corporate profits.

answer

Corporate profits are found by: summing corporate income taxes, dividends, and undistributed corporate profits. adding corporate income taxes and dividends, and subtracting undistributed corporate profits. subtracting corporate income taxes from the sum of dividends and undistributed corporate profits. summing dividends, undistributed corporate profits, and proprietors' income.

question

nominal GDP must have increased.

answer

If real GDP rises and the GDP price index has increased: the percentage increase in nominal GDP must have been less than the percentage increase in the price level. nominal GDP may have either increased or decreased. nominal GDP must have increased. nominal GDP must have fallen.

ECON 201 – Test 2 – Ch. 6-9 – Flashcards

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