Economics 12-13 review – Flashcards
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An example of a durable good would be?
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a used car
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Compared with the expenditure approach to calculating GDP, the income approach is?
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more accurate
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The main economic variables that affect business cycles include all of the EXCEPT? -interest rates -external events -personal savings -business investment levels
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personal savings levels
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The agency that maintains the National Income and Product Accounts (NIPA) is?
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the U.S Department of Commerce
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An example of capital deepening would be?
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paying for an employees to take college courses
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All of the following actions promote capital deepening EXCEPT? -raising taxes to pay for building roads -saving less and spending more of one's disposable income -borrowing money from foreign nations to invest in building infrastructure in this country -a low population growth rate at the same time that capital stock expands
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saving less and spending more of one's disposable income
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Compared with the income approach to calculating GDP, the expenditure approach is?
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more practical
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GDP expressed in constant, or unchanging prices is called?
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real GDP
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The amount of money a person has left of his or her income after taxes is called?
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personal income
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An accurate statement about the Great Depression would be that?
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it ended largely bc of an increase in defense spending related to WWII
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How is nominal GDP converted into a real GDP?
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through eliminating the effects of price increases on GDP growth
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An example of a final good or service?
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a cake purchased from a bakery for a wedding
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In a typical business cycle, what stage immediately follows a peak?
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contraction
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An example of depreciation?
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a construction worker's truck breaks down more often after 80,000 miles of work-related driving
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What do most economists believe about the future of business cycles?
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business cycles will continue to drive our economy in the future, but the Federal reserve may be able to better cushion the economy from the worst extremes
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An example of a positive external shock to aggregate supply?
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good weather leads to an unusually productive harvest to corn farmers
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An economy that experiences decreasing real GDP and increasing prices is said to suffer from?
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stagflation
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Higher saving leads to higher GDP in the future because?
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more capital is available for investment, leading to higher output through capital deepening
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When the economy is working properly, what is the unemployment rate?
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4 to 6 percent
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The "market basket" that is used by the Bureau of Labor Statistics to calculate prices is made up of?
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typical goods and services for an urban household
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What is a major problem for business during a period of chronic inflation?
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they cannot anticipate their costs
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According to the cost-push theory, what is responsible for inflation?
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producers raise prices to meet increased costs
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The unemployment rate is?
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(labor force - employed) / labor force X 100
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If the number of people employed is 150,000 and the labor force is 160,000 the unemployment rate is?
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6.25%
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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?
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frictionally unemployed
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A knitting factory worker who loses her job bc the company has relocated the plant to another country is an example of?
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structural unemployment
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If jackson is paid interest rate of 10% on his savings, but the inflation rate has risen to 20%, the purchasing power os his savings is?
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decreased by 10%
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What is the possible consequence of the following scenario? Bc of high unemployment rates in the country of Lavernia, employers offer high wages. To meet their higher payroll costs and maintain profits, they charge consumers more for goods and services.
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a wage-price spiral of ever-increasing prices
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Which of the following people is most likely to be classified as "working poor"?
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Carol, a single mother who works 35 hours a week at a job that pays slightly above minimum wage
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Which of the following is most likely to be worried about high inflation?
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a retired couple on a fixed income
