Finals

Question 1

deals with the aggregate economy.

Answer 1

Macroeconomics

Question 2

It analyzes the total of how everyone in the economy bought and sold,
earned and spent, produced and sold, conceptualized and
implemented projects, trained and worked, and saved and invest.

Answer 2

Macroeconomics

Question 3

It cannot be felt directly. They can only be observed if one is in the
direct path of economic change.

Answer 3

Macroeconomics

Question 4

Means that the economic standing of a country is expanding from the previous period.

Answer 4

Growth

Question 5

Reflects the capacity of the population, to afford the various products and services in the economy.

Answer 5

Prices

Question 6

Matches that economic growth by providing people with jobs that will allow them to satisfy their needs, and wants through the income that they will receive.

Answer 6

Employment

Question 7

it is the value of the goods or services produced by the country in a specified period of time.

Answer 7

Gross Domestic Product

Question 8

an economy doing poorly means that it is earning less than the past values as measured by the GDP.

Answer 8

Measuring of income and spending

Question 9

GDP may be used to identify the total income and total spending of the whole economy.

Answer 9

Measuring of income and spending

Question 10

It is the summation of all the final goods and services produced within a country for a specific period.

Answer 10

Gross domestic product

Question 11

Summation of all the final goods and services means all the market value of products sold and services rendered within a specific period.

Answer 11

Gross domestic product

Question 12

indicates completeness, so wages spent by households for services rendered like labor are included.

Answer 12

Summation

Question 13

mean that the value of a product as raw material and as an intermediate are not measured because this will double-count the value of the goods.

Answer 13

Final goods

Question 14

means goods that are currently made and sold at that particular period in a specific year.

Answer 14

Produced

Question 15

occurs when households spend their income to buy goods and services.

Answer 15

Consumption

Question 16

Are classified into durable goods – goods that do not deplete with use like gadgets and non-durable goods – are products that decrease when uses like food.

Answer 16

Goods

Question 17

are those goods that one gets or consumes without physically holding on to them, like getting a massage.

Answer 17

Services

Question 18

refers to goods that one buys for future use like machinery and equipment, which are utilized to produce other goods and services.

Answer 18

Investment

Question 19

specify the value of the spending transactions of the state after collecting taxes from the households and firms.

Answer 19

Government expenditure

Question 20

refers to the difference between imports and exports.

Answer 20

Net exports

Question 21

purchases made by foreign entities from domestic producers

Answer 21

Exports

Question 22

have a negative value because these are considered foreign spending.

Answer 22

Imports

Question 23

a period of relative normality in an economy. It means that the economy did not encounter any serious social, political, economic, and environmental problems.

Answer 23

Base year

Question 24

mimics the growth of the GDP without the prices.

Answer 24

GDP Deflator

Question 25

is the measure of all the final goods produced by the labor of a country in a specific period, including earnings from abroad.

Answer 25

Gross National Product

Question 26

measures the economy’s overall performance

Answer 26

National income

Question 27

are goods and services that are purchased for resale or further processing or manufacturing.

Answer 27

Intermediate goods

Question 28

Of goods would destroy the value of GDP.

Answer 28

Multiple counting

Question 29

is the market value of the firm’s output less than the cost of the inputs the firm has bought from others.

Answer 29

Value added

Question 30

are the social security payments, welfare payments that the government makes directly to households. Since the recipients contribute nothing to current production in return, to include in GDP would be to overstate the year’s output.

Answer 30

Public transfer payments

Question 31

such payments include the money that parents give to children of the cash gift. They produce no output. They transfer funds from one private individual to another and do not enter into GDP.

Answer 31

Private transfer payments

Question 32

the buying and selling of stocks and bonds is just a matter of swapping bits of paper. It creates nothing in the way of current production and is not included in the GDP.

Answer 32

Stock market transactions

Question 33

contribute nothing to current production and, for that reason, are excluded from GDP.

Answer 33

Secondhand sales

Question 34

to determine GDP using the expenditure approach, and we add up all the spending on final goods and services that have taken place throughout the year.

Answer 34

Expenditures approach

Question 35

by far the largest share of national income, was paid as wages and salaries by business and government to their employees. This also includes wage and salary supplements (social insurance, private pension, health, and welfare funds for workers)

Answer 35

Compensation of employees

Question 36

Consists of the income received by the households and businesses that supply property resources. This also includes the monthly payments of tenants and lease payment of corporations for the use of office space.

Answer 36

Rent

Question 37

consists of the money paid by private businesses to the suppliers of money capital.

Answer 37

Interest

Question 38

which consists of the net income of sole proprietorship, partnership, and unincorporated businesses

Answer 38

Proprietor’s income

Question 39

taxes are levied on the corporation's net earnings and flow to the government.

Answer 39

Corporate income

Question 40

these are the part of corporate profits that are paid to the corporate stockholders and thus flow to households – the ultimate owners of all corporations

Answer 40

Dividents

Question 41

are monies saved by the corporations to be invested later in new plants and equipment. They are also called retained earnings.

Answer 41

Undistributed corporate profits

Question 42

National income accountants add a statistical difference to national income to make the income approach match the outcome of the expenditures approach.

Answer 42

Statistical discrepancy

Question 43

to determine is to subtract from GDP the capital consumed in producing the GDP, which had to be replaced. That is, remove the consumption of fixed capital (depreciation) from GDP.

Answer 43

Net Domestic Product

Question 44

includes all income earned through the use of the country’s resources, whether they are located at home or abroad.

Answer 44

National income

Question 45

includes all income received, whether earned or unearned. -transfer payments must be added to personal income like:

Answer 45

Personal income

Question 46

is personal income, less personal taxes. the amount of income that households have leftover after paying their taxes. - They are free to divide that income between consumption and savings.

Answer 46

Disposable income

Question 47

This refers to the fluctuations in the economy. - It is the recurrent ups and downs in economic activity, which extend over several years.

Answer 47

Business cycle

Question 48

forces outside the economic system create the business cycle.

Answer 48

Exogenous theory

Question 49

forces within the economic system cause the fluctuation of the economy.

Answer 49

Endogenous theory

Question 50

the economy’s levels of output and employment expand toward full employment.

Answer 50

Recovery/Expansion

Question 51

As the name suggests, this is the highest point of all business cycles.

Answer 51

Peak/Boom/Prosperity

Question 52

a period of decline in total output, income, employment, and trade.

Answer 52

Recession/contraction

Question 53

It is a severe form of recession. In this phase, we will see a negative growth rate in the economy. There is a continuous decrease in demand.

Answer 53

Depression/ Trough

Question 54

Those firms which had produced in abundance during the expansion phase face the problem of maintaining unsold items.

Answer 54

Excess inventory

Question 55

To reduce investment, the recession phase is marked by a large scale of retrenchment.

Answer 55

Unemployment

Question 56

Large investments, increase in employment, income, and expenditure.

Answer 56

High growth

Question 57

An increase in investment forces more money supply in the system. Demand for factor inputs increases, hence their prices increase, which increases the cost of production. So the wages and prices of goods also increase.

Answer 57

Inflation

Question 58

Firms resort to a large amount of nonproductive expenditure on advertisements and publicity.

Answer 58

Severe competition

Question 59

This means there is no available job for every person who is willing and able to work.

Answer 59

Unemployment

Question 60

A situation is when individuals are working, but they do not contribute to production.

Answer 60

Disguised unemployment

Question 61

This category includes those who worked as paid employees, used in their own business, or worked as unpaid workers in a family member’s business. Both full-time and part-time workers are counted.

Answer 61

Employed

Question 62

This category includes those who were not employed, were available for work and had tried to find employment during the previous four weeks. It also consists of those waiting to be recalled to a job they had been laid off.

Answer 62

Unemployed

Question 63

This category includes those who fit neither of the first two categories, such as full-time students, homemakers, and retirees.

Answer 63

Not in the labor force

Question 64

it is often thought to explain relatively short spells of unemployment. - caused by interruptions in production due to technical reasons. - workers are laid off due to renovation. - workers left their job and are looking for a new one.

Answer 64

Frictional unemployment

Question 65

This occurs when the quantity of labor supplied exceeds the quantity demanded. - it is often thought to explain longer spells of unemployment. - this kind of unemployment results when wages are set above the level that brings supply and demand into equilibrium. - caused by a change in technology.

Answer 65

Structural unemployment

Question 66

caused by the fall of business in the economy.

Answer 66

Cyclical unemployment

Question 67

during the slack period, workers are laid off.

Answer 67

Seasonal unemployment

Question 68

as the sum of the employed and the unemployed

Answer 68

Labor force

Question 69

as the percentage of the labor force that is unemployed; Unemployment rates can be computed for the entire adult population and specific groups defined by race, gender, and so on.

Answer 69

Unemployment rate

Question 70

Measures the percentage that adult population that is the labor force that

Answer 70

Labor-force participation rate

Question 71

This refers to the rising general level of prices.

Answer 71

Inflation

Question 72

- occurs when demand for goods and services exceeds supply. - another cause is the excess money supply without an increase in production.

Answer 72

Demand-pull inflation

Question 73

this is caused by an increase in the cost of production and profit push versions

Answer 73

Cost-push inflation

Question 74

occurs when supply cannot meet the demand.

Answer 74

Structural Inflation

Question 75

This term is reserved for extremely rapid inflation, whose ultimate impact domestic output in employment can be devastating.

Answer 75

Hyperinflation

Question 76

his term is reserved for extremely rapid inflation whose ultimate impact on domestic output and employment can be devastating.

Answer 76

Stagflation

Question 77

When the government raises revenue by printing money, it is said to levy an inflation tax. - The inflation tax is not exactly like other taxes, however, because no one receives a bill from the government for this tax. Instead, the inflation tax is subtler. - The inflation tax is like a tax on everyone who holds money.

Answer 77

Inflation tax

Question 78

inflation penalized people who received relatively fixed nominal income.

Answer 78

Fixed nominal income receivers

Question 79

as price rises, the real value or purchasing power of savings will deteriorate.

Answer 79

Savers

Question 80

unanticipated inflation benefits debtors (borrowers) at the expense of creditors (lenders)

Answer 80

Debtors and creditors