Macro HW and Quiz Test 2 – Flashcards
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The largest component of national income is
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compensation of employees
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Which of the following is included in the expenditures approach to GDP?
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Spending on meals by consumers at restaurants
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The fact that nominal GDP has risen faster than real GDP:
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suggests that the general price level has risen.
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GDP tends to understate economic welfare because it does not take into account increases in leisure.
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True
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Real GDP measures:
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current output at base year prices
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The largest component of total expenditures in the United States is:
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consumption
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Adding the market value of all final and intermediate goods and services in an economy in a given year would result in:
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An amount greater than GDP for that year
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Real GDP accounts for changes in product quality; nominal GDP does not.
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False
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The two ways of looking at GDP are the:
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Expenditures approach and income approach
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If real GDP rises and the GDP price index has increased:
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nominal GDP must have increased
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The GDP tends to:
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understate economic welfare because it does not take into account increases in leisure.
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A nation's gross domestic product (GDP):
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is the dollar value of all final output produced within the borders of the nation during a specific period of time.
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Nominal GDP differs from real GDP because:
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Real GDP results from adjusting for changes in the price level
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Net exports are..
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exports less imports
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Which of the following is not included in personal consumption expenditures?
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Purchases of mutual funds by consumers
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A nation's gross domestic product (GDP):
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can be found by summing C + Ig + G + Xn
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In an economy experiencing a persistently falling price level:
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changes in nominal GDP understate changes in real GDP.
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Which would be considered an investment according to economists?
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A fishing-company owner buys new fishing gear
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GDP does not include which of the following activities?
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Couples remodeling their own homes
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GDP excludes
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the market value of unpaid work in the home.
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To avoid multiple counting in national income accounts
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Only final goods and services should be counted
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government purchases include government spending on:
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government consumption goods and public capital goods
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Which of the following is not economic investment?
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The purchase of 100 shares of AT&T by a retired business executive
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GDP measured using current prices is called:
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nominal GDP
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The simplest way to calculate GDP is to sum the total sales of all business firms.
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False
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If intermediate goods and services were included in GDP
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the GDP would be overstated.
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Unemployment Insurance increases frictional unemployment
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True
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Full-time homemakers and retirees are classified in the BLS data as:
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Not in the labor force
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Full employment mean zero unemployment
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false
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Kara voluntarily quit her job as an insurance agent to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management. Kara presently is:
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frictionally unemployed
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Assume that Kyle is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Kyle will be considered as:
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frictionally unemployed
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For a person to keep his real income steady at a certain level from one year to the next, his nominal income must:
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Rise as fast as the price index
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Inflation means that:
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prices on average are rising, although some particular prices may be falling.
real incomes are rising
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Part-time workers who want full-time work are counted as:
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fully employed and therefore the official unemployment rate may understate the level of unemployment.
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The best example of a "frictionally unemployed" worker is one who:
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Is in the process of voluntarily switching jobs
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Paying high wages may reduce turnover
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True
