question

Which is a primary use for national income accounting?

answer

To measure changes in the value of goods and services produced in the economy

question

An example of a final good in national income accounts would be new:

answer

Flowers purchased by homeowner Lenny Davis

question

Money spent on the purchase of a new house is included in the GDP as a part of:

answer

Investment

question

Which does not contribute to the production of the domestic output of an economy?

answer

A full-time student

question

A distinguishing characteristic of public transfer payments is that:

answer

The recipients make no contribution to current production in return for them

question

Net exports is a negative number when:

answer

A nation's imports of goods and services are greater than its exports

question

Which would be considered an investment according to economists?

answer

The construction of a new plant by Ford

question

The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940); personal consumption expenditures ($4,920); imports ($170); exports ($133); gross private domestic investment ($640). What is GDP in this economy?

answer

$6,463 billion

question

Refer to the above data. GDP is:

answer

$350 billion

question

The approach to measuring GDP that adds together compensation to employees, rents, interest income, dividends, undistributed corporate profits, proprietors' income, corporate profits, taxes on production and imports, net foreign factor income, a statistical discrepancy, and consumption of fixed capital is the:

answer

Income approach

question

What is one major measure of economic growth?

answer

Changes in real GDP

question

A supply factor in economic growth would be:

answer

An increase in the quantity of labor

question

The single most important source of productivity for economic growth for the United States has been:

answer

Technological advance

question

Which is the single most important source of U.S. economic growth?

answer

Increases in labor productivity

question

What economic concept would be most closely associated with a situation where an aluminum plant uses extensive computerization on the production line to reduce per-unit costs of production?

answer

Economies of scale

question

The number of years required for real GDP to double can be found by:

answer

dividing 70 by the annual growth rate.

question

Countries that have experienced modern economic growth have also tended to:

answer

move toward more democratic forms of government.

question

Economic historians date the start of the Industrial Revolution around the year 1776, when James Watt:

answer

invented and built a more powerful and efficient steam engine.

question

Which of the following institutional arrangements is most likely to promote growth?

answer

Unrestricted trade between nations.

question

A competitive market system:

answer

encourages growth by allowing producers to make profitable investment decisions based on market signals.

question

Market economies have been characterized by:

answer

occasional instability of employment and price levels.

question

Which of the following is not seen by economists as an underlying cause of business cycle fluctuations?

answer

All of the above are identified as causes of business cycle changes.

question

Innovations such as the microchip and the Internet lead to business cycle variations because:

answer

significant innovations occur irregularly and unexpectedly.

question

Refer to the above information. The labor force in Scoob is:

answer

102 million.

question

Refer to the above information. The unemployment rate in Scoob is:

answer

6.9 percent.

question

Refer to the above information. If the natural rate of unemployment in Scoob is 5 percent, then:

answer

cyclical unemployment is about 2 percent.

question

Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, the official unemployment rate would:

answer

decline.

question

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:

answer

structural unemployment.

question

Search unemployment and wait unemployment are types of:

answer

frictional unemployment

question

In the depth of the Great Depression, the unemployment rate in the United States was about:

answer

25 percent.

question

If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced:

answer

deflation of 3.33 percent.

question

If the Consumer Price Index rises from 300 to 333 in a particular year, the rate of inflation in that year is:

answer

11 percent.

question

If the rate of inflation is 12 percent per year, the price level will double in about:

answer

6 years.

question

Demand-pull inflation:

answer

occurs when total spending exceeds the economy's ability to provide output at the existing price level.

question

Inflation initiated by increases in wages or other resource prices is labeled:

answer

cost-push inflation.

question

Assume a nation's current production possibilities are represented by the curve AB in the above diagram. Positive economic growth would best be indicated by a:

answer

Shift in the curve from AB to CD

question

The most important determinant of consumer spending is:

answer

the level of income.

question

The natural rate of unemployment:

answer

Is equal to the total of frictional and structural unemployment

question

The Consumer Price Index was 247 in year 1 and 272 in year 2. The rate of inflation in year 2 was:

answer

10 percent

question

Assume a machine which has a useful life of only one year costs $2,000. Assume, also, that net of such operating costs as power, taxes, and so forth, the additional revenue from the output of this machine is expected to be $2,300. The expected rate of return on this machine is:

answer

15 percent.

question

Which statement is true?

answer

An increase in stock prices makes stockholders feel wealthier

question

Disposable income equals:

answer

Consumption plus saving

question

Refer to the above graph. At income level 3, the amount of saving is represented by the line segment:

answer

FG

question

Refer to the above graph. At income level 3, the amount of consumption is represented by the line segment:

answer

GH

question

Dissaving occurs when:

answer

Income is less than consumption

question

Which would shift the saving schedule upward?

answer

A decrease in wealth

question

As the consumption and saving schedules relate to real GDP, an increase in taxes will shift:

answer

Downward both the consumption and saving schedules

question

Refer to the above table. The marginal propensity to consume is:

answer

.75

question

Refer to the above table. The marginal propensity to save is:

answer

.25

question

Refer to the above table. The multiplier in this economy is:

answer

4

micro economics review

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards