Final Exam SI Questions Flashcards
(47 cards)
Refer to the figure. Alan should specialize in the production of ___________.
b. muffins and Diana should specialize in the production of scones (what you give up/over what you get)
When a union raises the wage above the equilibrium level, it raises the quantity of labor supplied and reduces the quantity of labor demanded, resulting in higher unemployment.
True
Refer to the figure. Which arrow represents the flow of factors of production?
Arrow C (inner flow from households to markets for factors of production to firms)
For a developed nation, a downside of public policy that increases health and nutrition is that _______________.
A. there is little payoff from the increase (the catch-up effect)
If the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied, there is a shortage of loanable funds and the interest rate is below the equilibrium level.
True
Refer to the table. Mexico should export _________.
tablets and import freezers
The consumer price index is a perfect measure of inflation in our economy.
False
Which of the following is included in the government purchases component of GDP?
b. the federal government buys fighter jets, a state government repairs highways, a local government pays its police
Which of the following is an important cause of inflation?
d. Growth in the quantity of money
Which of the following must be true if Y= (C+I+G)?
C. Net exports (NX) are zero.
Both Denis and Carol produce cupcakes and cookies. If Denis’s opportunity cost of 1 cupcake is 3 cookies and Carol’s opportunity cost of 1 cupcake is 4 cookies, then ____________.
C. Denis has a comparative advantage in the production of cupcakes.
Other things the same, when an economy increases its saving rate, consumption increases now and production rises later.
False
If in some year real GDP was $45 billion and the GDP deflator was 130, what was nominal GDP?
58.5 billion
GDP Deflator Equation
100(nominal/real)
Which of the following would likely be studied by a macroeconomist rather than a micro economist?
A. The effects of borrowing by the federal government.
China and Japan both produce clothing and computers. China is said to have the comparative advantage in producing clothing if _________________.
B. the opportunity cost of producing clothing is lower for China than it is for Japan
GDP _____________.
C. excludes most goods and services produced at home and most goods and services produced illegally.
The best measure for changes in the price level of a consumer basket of goods and services over time is the _______________.
A. CPI since it measures changes in the prices of a basket of goods and services consumed by a typical consumer over time
GDP Deflator
measures the changes in production at a fixed price
If there is a natural disaster, the long-run aggregate-supply curve shifts
A. left (output is going to be less)
Unemployment insurance makes workers ________ likely to negotiate for job security when searching for a job and _________ likely to have a long job search.
less; more
The source of the demand for loanable funds is ____________.
investment (source of supply is people saving)
If the stock market booms, then ________.
C. aggregate demand increases, which the Fed could offset by selling government bonds
A farmer produces potatoes, and sells them to a company which uses them all to make potato chips. The potatoes produced by the farmer are called _______________.
D. intermediate goods
