question

You buy a hover board from Amazon.

answer

Yes, Consumption

question

You and your family paint your house.

answer

No, Non-market Transaction

question

You buy 100 shares of Microsoft.

answer

No, Purely Financial Transaction

question

You are paid to babysit your neighbor's son, but don't report the income on your tax return.

answer

No, Unreported Income

question

Today, Bob buys a 1965 Ford Mustang convertible which is in mint condition.

answer

No, Second Hand Sales

question

The salesman gets a commission for selling that 1965 Ford Mustang.

answer

Yes, Consumption

question

You and your friend volunteer at Habitat for Humanity building houses for low income earners.

answer

No, Non-market Transaction

question

Dr. Payne does $1000 worth of dental work but reports only $500 of it.

answer

No, Unreported Income

question

You are given a suitcase full of $100 bills from the sale of smuggled drugs

answer

No, Illegal

question

Your mother is teaching your little brother to read.

answer

No, Non-market Transaction

question

Your dad bakes you home-baked cookies.

answer

No, Non-market Transaction

question

You buy a loaf of bread from the bakery.

answer

Yes, Consumption

question

The U.S. government purchases another 5 B-2 Bombers for $2 Billion each.

answer

Yes, Government

question

Ford buys a ton of sheet metal used in making car doors.

answer

No, Intermediate Goods

question

You buy a new "iPod Video" from the Apple store.

answer

Yes, Consumption

question

You send in a $90 check to your dentist for cleaning your teeth.

answer

Yes, Consumption

question

Your family buys a brand new house from Lewis Group in Rancho Cucamonga.

answer

Yes, Gross Private Domestic Investment

question

40 additional teachers are hired by Chaffey Unified School District.

answer

Yes, Government

question

GM invest in $500 million worth of robots to assemble their cars.

answer

Yes, Gross Private Domestic Investment

question

You volunteer 10 hours a week of your time to work for senior citizens

answer

No, Non-market Transaction

question

Ford produces 25,000 new F150s which are not sold by the end of the year.

answer

Yes, Gross Private Domestic Investment

question

Russia buys 300 new Dell computers to improve work stations at the Kremlin.

answer

Yes, Net Exports

question

A woman's husband does all her cooking and cleaning, working for her 16 hours per day.

answer

No, Non-market Transaction

question

Nike produces $10 million worth of Nike Air Jordan's in Vietnam.

answer

No, Overseas

question

An example of a durable good would be

answer

a used car.

question

The amount of money a person has left of his or her income after taxes is called

answer

disposable personal income.

question

When the economy is working properly, what is the unemployment rate?

answer

4 to 6 percent

question

In a typical business cycle, what stage immediately follows a peak?

answer

contraction

question

The "market basket" that is used by the Bureau of Labor Statistics to calculate prices is made up of which of the following?

answer

typical goods and services for an urban household

question

When Alison, a college math professor, leaves her job at a small rural college and starts looking for a job at large urban university, she is

answer

frictionally unemployed.

question

A knitting factory worker who loses her job because the company has relocated the plant to another country is an example of

answer

structural unemployment.

question

Which of the following is most likely to be worried about high inflation?

answer

a retired couple on a fixed income

question

A nation's Gross Domestic Product(GDP):

answer

is the dollar value of the total output produced within the borders of the nation.

question

Which of the following is included in GDP?

answer

purchase an iPod Video at the Apple Store

question

In September, 2015, Chrysler produced a $40,000 Chrysler 300 car that was delivered to the Chrysler Dealership in Glendale in October 2015. This auto was purchased in February of 2016. This auto would be counted as:

answer

investment in 2015 and consumption in 2016.

question

National income accounts can avoid double counting by:

answer

only counting final goods.

question

The term "final goods and services" refers to:

answer

goods and services purchased by the ultimate users, as opposed to resale or further processing.

question

Which of the following is a final good or service?

answer

a haircut

question

To the economist, which is not considered to be investment(Ig)?

answer

purchase of 10,000 shares of Nokia stock

question

The largest component of GDP is:

answer

personal consumption

question

If depreciation exceeds gross private domestic investment, then:

answer

net investment is negative.

question

Which diagram indicates declining productive capacity (negative net investment)?

answer

Economy B

question

Which diagram indicates an economy that is growing most rapidly?

answer

Economy C

question

If in a given year Ig was $120 billion and In was a positive $65 billion, then in that year the country's capital stock["national factory"]:

answer

increased by $65 billion

question

Consumption of fixed capital [depreciation] can be determined by:

answer

subtracting In from Ig.

question

Nominal GDP during one year is $300 and the price index is 120. Real GDP is

answer

$250

question

If CPI falls from 150 to 100 during a particular period:

answer

deflation of about 33% has occurred.

question

The term "real GDP" refers to:

answer

GDP data which have been adjusted for changes in the price level[measures output].

question

Nominal GDP during a particular year is $280 and the GDP price deflator is 175. Therefore real GDP is:

answer

$160

question

The base year[where nominal and real GDP=100] used in determining the price indexes for the economy below: (With graph)

answer

is 1992

question

If the CPI falls from 150 to 137, the economy has experienced:

answer

deflation of 8.7%

question

During a serious recession we would expect output to fall the most in:

answer

auto industry

question

The top of the business cycle is called:

answer

the peak

question

The phase of the business cycle where real domestic output(GDP) is decreasing and unemployment is rising at a minimum is called:

answer

a contraction

question

The bottom of a business cycle is called:

answer

trough

question

The phase of the business cycle where real domestic output(GDP) is increasing and unemployment is decreasing is called:

answer

an expansion

question

The production of durable goods is more variable than the production of non-durable goods because:

answer

durable goods purchases are postponable and producers of durables are competitive.

question

The U.S.'s economy is considered to be at "full employment" when:

answer

about 4-6% of the labor force is unemployed.

question

After graduating from college, Kim is interviewing school districts for a job teaching economics. Kim presently is:

answer

frictionally unemployed.

question

The labor force includes:

answer

employed workers and persons who are officially unemployed["looking for a job"].

question

Econnie Nomics works in her own home as a full time homemaker. Officially, Econnie is:

answer

not in the labor force

question

If the unemployment rate is 9% & the natural rate of unemployment is 6%, then the:

answer

cyclical unemployment rate is 3%.

question

The presence of discouraged workers:

answer

causes the official unemployment rate to understate the amount of unemployment.

question

Suppose there are 7 million unemployed workers seeking jobs. Over time, 2 million of them become discouraged and quit looking for work. As a result, the official unemployment rate would:

answer

decline.

question

A medical school graduate searching for a job as a brain surgeon would best be classified as:

answer

a part of frictional unemployment.

question

Suppose there are 8 million part-time workers & 90 million full-time workers. 4 million of the part-time workers switch to full-time work. We can conclude that:

answer

the official unemployment rate will remain unchanged.

question

If the CPI falls from 120 to 114 in a particular year, the economy has experienced:

answer

deflation of 5%

question

The CPI was 140.3 in 2004 and 144.5 in 2005. Therefore, the rate of inflation in 2005 was about:

answer

3%

question

If Reid's annual real income rises by 8% each year, his annual real income will double in about:

answer

9 years

question

One year nominal GDP was $286 billion & the price index was 88. Then Real GDP was:

answer

$325 billion

question

In 2015, Randy's nominal income rose by 8% and the price level (inflation) rose by 5%. We can conclude that Randy's real income:

answer

rose by 3%

question

If a person's real income has risen during an inflationary period, then

answer

her nominal income has risen more rapidly than prices.

question

The expenditure approach to measuring GDP sums:

answer

consumption, gross private domestic investment, government expenditures, and net exports.

question

When short-term interest rates creep higher than long-term interest rates the yield curve is said to be inverted and is viewed as a leading indicator of

answer

recession

Econ Test 5 – Macroeconomics and the Business Cycle – Flashcards

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