econ study set #1 – Flashcards

Which of the following is counted in GDP a. the trading of 100 shares of Microsoft stock (financial so no) b. the services of a real estate broker c. government transfer payments d. the sale of a used car e. none of the above

2. Which of the following would not be included in the measurement of GDP? a. a bill from a car mechanic b. wages of a card dealer working in a Las Vegas casino c. commissions of a stockbroker d. the increased value of shares of stock e. c and d

Which of the following would definitely not be included in the measurement of GDP? a. value of the services of a painter who paints your garage b. value of the services of a person who mows his or her own lawn c. value of the services of a maid who cleans your house d. value of the services of a plumber who fixes your kitchen sink

Suppose the total market value of all final goods and services produced this year in economy X is $4 million. Of the $4 million worth of goods, $3 million is sold and $1 million is held in inventory. For this year, the GDP for economy X is a. $4 million. b. $3 million. c. $1 million. d. $7 million. e. none of the above

Investment is equal to all purchases of newly produced capital goods a. minus changes in business inventories. b. plus fixed investment minus inventory investment. c. plus changes in business inventories. d. plus changes in business inventories plus purchases of new residential housing.

Sophia just bought shares of stock in IBM for $20,000 and paid a $300 commission to her broker. How did this impact GDP? a. It had no impact on GDP. b. GDP increased by $300. c. GDP increased by $20,000. d. GDP increased by $19,700. e. GDP increased by $20,300.

Which of the following would not be included in the calculation of this year's GDP? a. a headlight bulb purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car b. a headlight bulb purchased by Ford Motor Co. from a supplier c. a headlight bulb produced but not sold this year and thus ending up as inventory d. none of the above, i.e., all would be included

The sale of __________ goods is omitted from current GDP because __________. a. intermediate goods; these goods do not constitute production b. used goods; these goods were counted in an earlier year c. illegal; these goods do not constitute economic value d. b and c e. a, b, and c

Suppose that net exports are -$300 billion and exports are $500 billion. Imports equals a. $800 billion. b. $400 billion. c. $200 billion. d. -$200 billion. e. There is not enough information to answer this question.

Gross Domestic Product (GDP) is the total market value of all a. final goods and services produced annually within a country's borders. b. final and intermediate goods and services produced annually within a country's borders. c. intermediate goods and services produced annually within a country's borders. d. final goods and services produced every month within a country's borders.

If GDP in year 1 is the same dollar amount as the GDP in year 2, does it follow that Real GDP in year 1 is the same as Real GDP in year 2? a. Yes, since prices must necessarily be the same in the two years. b. No, since equal GDP figures do not account for population. c. No, since prices may not be the same in the two years. d. Yes, since equal GDP figures do account for a change in the quality of goods produced in the two years. e. none of the above

Which of the following is always a characteristic of the contraction phase of the business cycle? a. lower unemployment rates b. a decline in Real GDP c. higher inflation rates d. a decline in GDP e. all of the above

Which of the following does GDP omit? a. Jack purchases $2,300 worth of stock in company X. b. Bob mows his lawn and washes and irons his shirts. c. Helen receives $4,000 a year in Social Security payments. d. a and b e. a, b, and c

If the CPI is 100 in the base year and 112 in the current year, how much did prices rise between the base year and the current year? a. 12 percent b. 112 percent c. 1.2 percent d. 0.12 percent

Suppose the market basket consists of 100X, 200Y, and 300Z. Current-year prices are $5 for each unit of X, $2 for each unit of Y, and $3 for each unit of Z. Base-year prices are $2 for each unit of X, Y, and Z. What is the approximate CPI in the current year? 1200, 1800 a. 15 b. 70.20 c. 1,200 d. 150

In year 1 the CPI is 140, and in year 2 the CPI is 160. From year 1 to year 2, Chiang's salary rises from $42,000 to $47,000, and Marta's salary rises from $55,000 to $66,000. Who is "more than keeping up with inflation"? a. Marta b. Chiang c. both Marta and Chiang d. neither Marta nor Chiang

Suppose that 1983 is the base year for the Consumer Price Index (CPI) and in 2012 the CPI was 226. What does this "226" mean? a. What cost $100 in 1983 on average cost 226 times as much in 2012. b. What cost $100 in 1983 on average cost $226 more in 2012. c. What cost $100 in 1983 on average cost 100/226 (or 0.44) times as much in 2012 (that is, it will cost $22 in 2012). d. What cost $100 in 1983 on average cost $126 more in 2012.

The civilian non-institutional population can be broken down into two groups: a. employed persons and unemployed persons. b. persons working and persons not working. c. persons working in service jobs and persons working in manufacturing jobs. d. persons not in the labor force and persons in the labor force.

Persons who are retired or engaged in own-home housework are considered to be in which of the following categories? a. in the civilian labor force b. not in the labor force c. employed d. unemployed

In order to be classified as unemployed, a person must a. not have a job, have been actively looking for work within the past four weeks, and currently be available for work. b. not have a job, and currently be available for work. c. actively have looked for work within the past six weeks. d. not have a job.

Suppose the civilian non-institutional population equals 100,000 persons; the civilian labor force equals 75,000 persons; there are 70,000 employed persons and 5,000 unemployed persons. If 5,000 persons who are currently "not in the labor force" decide to join the civilian labor force, and 3,000 of them are unemployed, then a. both the unemployment and the employment rate rise. b. both the unemployment and the employment rate fall. c. the unemployment rate rises and the employment rate falls. d. the unemployment rate falls and the employment rate rises.

If a person is waiting to be called back to a job from which she has been laid off, how is she classified? a. as not in the labor force b. as an unemployed person c. as an employed person d. none of the above

Suppose there are 200 million persons in the population, 120 million persons in the civilian labor force, and 90 million persons are employed. The number of people unemployed is _______ million and the unemployment rate is ___________ percent. a. 30; 25 b. 30; 33 c. 30; 5 d. 80; 40

Jones lost his job in industry A, but he has skills that can be transferred to industry B (which is currently hiring). Smith lost a job in industry C, but his skills cannot be transferred to industry B or to any other industry. Jones is __________ unemployed and Smith is __________ unemployed. a. structurally; frictionally b. structurally; structurally c. frictionally; frictionally d. frictionally; structurally

Juan lost his job as a nuclear physicist working for a defense contractor. He can not find a job because no firms in the defense industry or any other industry are hiring people with his skills. Juan is ______________ unemployed. a. frictionally b. cyclically c. structurally d. naturally

Gross domestic product in the economy is measured by the

A final good is one that

How are intermediate goods treated in the calculation of GDP?

An example of an intermediate good would be

An example of a final good would be

Home Depot sells new and used doors to contractors who build new homes. Home Depot also sells new and used doors to homeowners. Which of the following would be counted in GDP?

Which of the following transactions would be included in the official calculation of GDP?

A transfer payment is a payment by the government to an individual

Consumption expenditures do not include household purchases of

Which of the following is considered a durable good

Product Quantity Price per Unit Coke 10,000 $2 iPods 2,000 150 Backpacks 4,000 25 Hershey bars 8,000 1 11) Refer to Table 19-1. Consider the table of production and price statistics for a small economy in 2008. If the economy only produces the four goods listed below, what is GDP for 2008?

GDP is not a perfect measure of well-being because

Which of the following accurately describes an effect of hurricane Katrina on GDP?

The underground economy can be described as

Marla is an architect who is designing a home for Chuck. Chuck is paying Marla $150 per hour to design his new home. When Chuck and Marla get married, Marla continues to work on designing the home, but she no longer charges Chuck for her work. As a result, GDP ________ because ________.

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products. For his wife's birthday, he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete. By how much and in what direction does GDP change as a result of his efforts?

The measure of production that values production using current prices is called

If real GDP increases we know for sure that

The most widely used measure of inflation is based on which of the following price indicates

Year CPI (1982-1984 = 100) 2004 175 2005 180 Refer to The table. Suppose that the data in the table above reflect price levels in the economy. What is the inflation rate between 2004 and 2005?

Year CPI (1982-1984 =100) 2004 100 2005 113 Refer to Table 20-3. Suppose that the data in the table above reflect the price levels in the economy. Given that data, we can say that the cost of living rose by ________ between 2004 and 2005?

Which of the following describes the accuracy of the Consumer Price Index?

If consumers purchase fewer of those products that increase most in price and more of those products that decrease in price as compared to the CPI basket, then

The formula for calculating the CPI is

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 ________.

Year Nominal Average Hourly Earnings ($) CPI (1982-1984 =100) 2001 $10 100 2002 10 105 2003 12 110 9) Refer to Table 20-7. Looking at the table above, real wages ________ from 2001 to 2002, and real wages ________ from 2002 to 2003

The stated interest rate on a loan is the

The real rate of interest is

If the nominal rate of interest is 6.5% and the inflation rate is 3.0%, what is the real rate of interest

If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is

Which of the following individuals would be most negatively affected by anticipated inflation?

If inflation increases unexpectedly, then

The unemployment rate is

A full-time student who is not working is categorized as

Discouraged workers are classified by the BLS as

Discouraged workers are

The labor force participation rate is defined as

Mike has been unemployed for over a year. He hasn't looked for a job in the last three months, but he's just started looking for work again. Because Mike started looking for a new job

Jack lost his job six months ago, and he's been actively looking for a new job ever since. The Bureau of Labor Statistics would classify Jack as

Which of the following causes the unemployment rate to understate the true extent of joblessness?

The short-term unemployment arising from the process of matching workers with jobs is called

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called

Workers laid off as a result of a recession suffer

Which of the following is an example of a worker experiencing cyclical unemployment?

Jack just told his boss that he thinks his boss is an idiot. It is likely that Jack will be experiencing ________ unemployment in the near future.

Sarah is a full-time student who is not looking for work. What kind of unemployment is Sarah experiencing?

Emma is a road construction worker. During the winter months, emmy finds it more difficult to get work. The unemployment Emma experiences in the winter is

Which of the following is an example of a worker experiencing frictional unemployment

When the labor market is at full employment

When an economy is at its natural rate of unemployment, which of the following will be true

The natural rate of unemployment is made up of