Econ1 #3 – Flashcards
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E
answer
The civilian non-institutional population consists of everyone in the population who is a. at least 16 years of age, in the armed forces, or institutionalized. b. at least 16 years of age. c. not in the armed forces. d. not institutionalized. e. b, c, and d
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C
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If a person worked at least 15 hours per week as an "unpaid" worker on a family farm, 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
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B
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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
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A
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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.
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C
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The unemployment rate equals the a. number of employed persons divided by the number of unemployed persons. b. number of unemployed persons divided by the civilian non-institutional population. c. number of unemployed persons divided by the civilian labor force. d. sum of unemployed persons and discouraged workers divided by the civilian labor force.
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C
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The employment rate equals the number of a. employed persons divided by the number of unemployed persons. b. unemployed persons divided by the civilian non-institutional population. c. employed persons divided by the civilian labor force. d. employed persons divided by the civilian non-institutional population. e. none of the above
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C
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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
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D
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Look at the following data: The structural unemployment rate is 4 percent, the natural unemployment rate is 5 percent, and the cyclical unemployment rate is 3 percent. The frictional unemployment rate is ____________ percent and the actual unemployment rate is __________ percent. a. 2; 7 b. 2; 8 c. 1; 7 d. 1; 8
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B
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Look at the following data: The frictional unemployment rate is 2 percent, the structural unemployment rate is 3.5 percent, and the actual unemployment rate is 9.5 percent. The natural unemployment rate is ____________ percent and the cyclical unemployment rate is __________ percent. a. 1.5; 4 b. 5.5; 4 c. 1.5; 6 d. 6; 15
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C
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Look at the following data: The frictional unemployment rate is 1.5 percent, the natural unemployment rate is 4.5 percent, and the cyclical unemployment rate is -1 percent. The structural unemployment rate is _________ percent and the actual unemployment rate (in this economy) is ___________ percent. a. 6; 3.5 b. 3; 5.5 c. 3; 3.5 d. 6; 5.5
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A
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A plumber who quits his job in San Diego and moves to Orlando where additional plumbers are needed is said to be ___________________ unemployed a. frictionally b. structurally c. cyclically d. underemployed
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A
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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.
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B
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In the definition of GDP, the words "total market value" refer to total a. dollar value at base prices. b. dollar value at current prices. c. subjective value. d. objective value. e. a and d
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A
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Which of the following illustrates double counting? a. The total market value of the steel used to produce a car and the total market value of the car itself are summed. b. The total market value of tennis rackets and the total market value of tennis balls are summed. c. The total market value of picture frames and the total market value of camera film are summed. d. The total market value of eyeglasses and the total market value of carpet are summed. e. b and c
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B
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Which of the following is counted in GDP? a. the purchase of 100 shares of Microsoft stock b. the services of a real estate broker c. government transfer payments d. the sale of a used car e. none of the above
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D
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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
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B
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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
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C
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Net exports equals a. exports divided by imports. b. the sum of exports and imports. c. exports minus imports. d. exports during the year. e. none of the above
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D
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Macroeconomists define consumption as a. purchases by the business sector. b. wearing away and breakdown of capital goods. c. the difference between imports and exports. d. purchases by the household sector.
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A
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To macroeconomists, investment is mainly the purchases of goods and services a. by businesses. b. to hold as wealth, such as gold coins or art. c. to hold as wealth, such as stocks and bonds. d. in the period previous to the period being studied.
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A
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The two ways of measuring Gross Domestic Product are the __________ approach and the __________ approach. a. expenditure; income b. expenditure; national product c. national product; income d. real gross domestic product; nominal gross domestic product e. net national product; personal income
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D
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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.
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E
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Business firms make which of the following two types of investment? a. foreign investment and domestic investment b. fixed investment and capital investment c. investment in stocks and investment in bonds d. investment in new capital goods and investment in used capital goods to replace "worn-out" capital goods e. fixed investment and inventory investment
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C
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What is the proper sequence of the phases of a business cycle? a. peak, contraction, trough, expansion, recovery b. peak, contraction, recovery, trough, expansion c. peak, contraction, trough, recovery, expansion d. contraction, peak, trough, recovery, expansion e. recovery, trough, peak, expansion, contraction
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B
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A business cycle refers to the a. continued expansion in Real GDP. b. recurrent swings (up and down) in Real GDP. c. continued decline in Real GDP. d. period when Real GDP grows at unusually high rates. e. none of the above
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D
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What does annual economic growth refer to? a. annual increases in GDP b. annual increases in consumption spending c. annual increases in investment spending d. annual increases in Real GDP e. none of the above
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B
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Which of the following would be included in this year's GDP? a. the value of a used car, at its sale price b. the value of a new domestic automobile, at its sale price c. a sale of Microsoft stock from one individual to another d. the face value of a life insurance policy paid to a woman at the death of her husband
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D
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When the expenditure approach is used to measure GDP, the major components of GDP are a. consumption, investment, indirect business taxes, and depreciation. b. employee compensation, rents, interest, self-employment income, and corporate profits. c. employee compensation, corporate profits, depreciation, and indirect business taxes. d. consumption, investment, government consumption and gross investment, and net exports.
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D
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If you wanted to measure whether the output of an economy was increasing or decreasing across time periods, you would use the real GDP data rather than the nominal GDP data because a. exports are excluded from real GDP but not nominal. b. real GDP incorporates the impact of federal budget deficits and surpluses; nominal GDP does not. c. real GDP reflects the impact of transfer payments on the economy, but nominal GDP does not. d. real GDP adjusts for changes in the general level of prices, but nominal GDP does not.
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B
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Which of the following transactions would be included in this year's GDP for the United States? a. Deion sends $100 to a hotel in Costa Rica as a deposit for his vacation. b. Deion buys a travel guide written by a Costa Rican woman living in the United States. c. Deion buys a shirt while on vacation in Costa Rica. d. Deion spends money in an American-owned restaurant in Costa Rica.
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C
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Which of the following would increase GDP? a. The state of Florida buys paper from a German paper mill. b. A German buys stock in Citibank. c. Honda produces cars in Ohio. d. An American buys art on a trip to Japan.
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D
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Which of the following would increase GDP for the United States? a. A Colombian citizen buys a can of coffee produced in Colombia. b. An individual buys a 19th-century mansion formerly owned by a famous American mystery writer. c. An American buys a Big Mac at a McDonald's in Moscow, Russia. d. An American buys a Honda manufactured at a plant in Tennessee.
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B
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The consumer price index is a. a measure of the increase in the average price of all of the goods that are included in the calculation of GDP. b. a comparison of the cost of buying a typical bundle of goods during a given period with the cost of buying the same bundle during an earlier base period. c. the ratio of the average price of a typical market basket of goods compared to the cost of producing those goods during the previous year. d. a comparison of the cost of the typical bundle of goods consumed in period 1 with the cost of a different bundle of goods typically consumed in period 2.
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B
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Real GDP equals nominal GDP a. minus exports. b. corrected for changes in the price level. c. minus personal income taxes. d. minus retail sales taxes.
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C
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In contrast with nominal GDP, real GDP refers to nominal GDP a. minus exports. b. minus personal income taxes. c. corrected for price changes. d. corrected for depreciation.
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D
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Which of the following transactions would be counted toward this year's GDP? a. General Motors purchases 10,000,000 tires from Firestone. b. A 300-year-old painting is sold for $12 million. c. A street gang earns $2 million from selling illegal drugs. d. Your real estate agent earns $5,000 commission when you sell your 100-year-old house for $100,000.
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B
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The consumer price index (CPI) and the GDP deflator are designed to measure the degree to which a. there have been changes in the proportions of national income generated by (and thus earned by) the rich relative to the poor. b. the cost of purchasing a bundle of goods has changed over time. c. consumption patterns have changed with time. d. consumer prices have risen over and above increases in worker wages.
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A
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Which of the following is not a problem or shortcoming of GDP? a. Goods produced in one period that are sold in the following period fail to get counted in any period. b. It tends to understate the growth of economic welfare because it does not fully and accurately account for improvements in the quality of products. c. GDP is not an accurate measure of welfare because it makes no adjustment for harmful side effects (such as pollution) or destructive acts of nature. d. GDP understates output because it fails to include nonmarket production such as that which takes place in the household or in illegal markets.
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A
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If you were required to write a paper for your history class (or a report for your job) in which you were using dollar valued data across different years, you would a. use a price index to remove the effects of inflation to have reliable data measuring changes in the real value of things. b. never attempt to correct for inflation because inflation is a key indicator of economic activity. c. tell your teacher or boss that you never learned how to correct data for inflation. d. assume that prices did not change during the period you are studying.
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B
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Gross domestic product is the sum of a. the purchase price of all goods and services exchanged during the period. b. the purchase price of all final goods and services produced domestically during the period. c. the purchase price of all goods and services produced during the period minus depreciation of productive assets during the period. d. the purchase price of all final goods and services produced by a country's citizens during the period.
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B
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If the base year for the GDP deflator is 1996, the value of the GDP deflator for 1996 a. is 10. b. is 100. c. is 150. d. cannot be determined from the data given.
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C
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The best definition of inflation is a(n) a. temporary increase in prices. b. increase in the price of one important commodity such as food. c. persistent increase in the general level of prices as measured by a price index. d. increase in the purchasing power of the dollar.
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B
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The value of money a. remains constant during periods of inflation. b. varies inversely with the general price level. c. varies directly with the general price level. d. varies indirectly with output.
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C
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Structural unemployment means that a. employment in the construction industry is insufficient. b. there are simply not enough jobs to go around. c. worker qualifications do not match available jobs. d. jobs are plentiful, but workers are scarce.
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C
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The natural rate of unemployment a. is fixed; it cannot be changed with public policy. b. fluctuates substantially over the business cycle. c. is associated with the economy's maximum sustainable output rate. d. declines when youthful workers (under age 25) become a larger proportion of the labor force.
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A
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The CPI is based on a representative group of goods called the market basket. A. True B. False
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A
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A seamstress who quits her job in Los Angeles and moves to New York where additional seamstresses are needed is said to be frictionally unemployed. A. True B. False
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B
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If Jorge is temporarily absent from his regular job because of an industrial dispute, the Bureau of Labor Statistics will classify him as unemployed. A. True B. False
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A
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If Carlos is waiting to be called back to his job from which he has been temporarily laid off, the Bureau of Labor Statistics will classify him as unemployed. A. True B. False
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B
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If the Bureau of Labor Statistics considers Jessica to be a discouraged worker, then she is counted as unemployed for purposes of computing the official unemployment rate. A. True B. False
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B
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If the Bureau of Labor Statistics considers Jessica to be a discouraged worker, then she is counted as unemployed for purposes of computing the official unemployment rate. A. True B. False
