Econ 222 Exam 2 – Flashcards
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An important conclusion to draw from the circular for diagram is that:
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we can measure GDP by calculating the total value of expenditures on final goods and services, or we can measure GDP by calculating the value of total income
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In the circular flow diagram, who supplies factors of production in exchange for income?
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households
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What is an example of a non-durable good?
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clothing
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Which of the following explains the changes in the US adult male labor force participation rate since 1948?
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younger men are remaining in school longer as compared to the past
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An advantage of the household survey over the establishment survey of the labor market is that the household survey:
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includes the number of self employed persons
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What is the typical length of unemployment in the modern US economy?
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unemployment generally lasts less than 6 months
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Which of the following causes the unemployment rate to understate the true extent of joblessness?
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discouraged workers are not counted as unemployed
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Which of the following best describes a current trend in the labor force participation rate?
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it is decreasing for men and increasing for women
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The average period of unemployment was _________ following the 2007-2009 recession as following any other recession since the end of WWII.
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twice as high
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The natural rate of unemployment is:
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the sum of structural and frictional unemployment
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When the economy is at full employment, unemployment is equal to:
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the natural rate of unemployment
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After graduation, a college student might enter the job market during an expansion but apply for graduate school during a recession because:
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the probability os finding a job is higher during economic expansion and lower during recession
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Cyclical unemployment is caused by a:
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recession
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As output (GDP) is increasing, the amount of cyclical unemployment would:
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decrease
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When a minimum wage is enacted or increased across a country:
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the unemployment rate will increase some but the impacts will be much larger for some groups of workers
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Increases in the minimum wage will:
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increase unemployment among teenagers
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The unemployment rate in the US is usually _________ than that of most other
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lower
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A student who just graduated from college but has not found a job yet would most likely be:
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frictionally unemployed
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Crowding out occurs when:
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governments must borrow funds which causes interest rates to rise and thus private investment is reduced
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Giving workers a raise can result in overall lower costs for a firm if:
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workers are motivated by higher wages to work harder
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Borrowers are ______ of loanable funds.
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demanders
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Lenders are _______ of loanable funds.
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suppliers
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Potential GDP is:
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sometimes greater, sometimes less, and sometimes equal to actual real GDP
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The financial system of a country is important for long run economic growth because:
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firms need the financial system to acquire funds from households
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Which of the following would you expect to increase the equilibrium interest rate?
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an increase in the budget deficit
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If the price of a television set bought by a US household but made in China increases, which would be impacted, CPI or GDP?
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CPI
