Unit 5

Question 1

How is nomial GDP converted into all GDP?

Answer 1

Through eliminating the effects of price increase on GDP growth.

Question 2

What is the difference between a recession and a depression

Answer 2

A depression is a particularly deep recession with high levels of unemployment.

Question 3

According to the demand-pull theory, what is responsible for inflation?

Answer 3

Demand for goods and services exceeds existing supply.

Question 4

Economists look for which of the following explanations for inflation?

Answer 4

To much money in the economy, producers raise prices in order to meet increased costs and the demand for goods exceeds supply. Like in war-time.

Question 5

All of the following measures help to promote technological process except…

Answer 5

Increased wages for researchers.

Question 6

In an economy, when the price level falls consumers and firms buy more goods and services. The relationship is represented by…

Answer 6

Aggregate demand curve.

Question 7

What is the difference between seasonal unemployment and structural unemployment?

Answer 7

Seasonal unemployment occurs because of schedule, whereas structural occurs because people lack skills.

Question 8

If the number of people employed is 150,000 and he labor force is 160,000, the unemployment rate is…

Answer 8

6.25%

Question 9

An accurate statement about the Great Depression would be…

Answer 9

It was the most severe economic downturn in the history of industrial capitalism.

Question 10

When plotted on a Lorenzo curve the income distribution curve for the town of Lakeview is a straight line from 0% to 100% this means that…

Answer 10

Everyone in Lakeview earns about the same income

Question 11

One main economic variables that affect business cycles include all the following except

Answer 11

Personal savings levels

Question 12

The amount of money person has left after his or her income taxes is called

Answer 12

Disposable personal income

Question 13

What is an example of positive external shock to an aggregate supply

Answer 13

Good weather leads to our usually productive harvest for corn farmer’s

Question 14

What does it mean if a person is under employed

Answer 14

The person has a job but they are overqualified for it

Question 15

Which of the following might cause the inflation rate spiked up sharply

Answer 15

Price on world oil markets rise steeply do two more in the middle east

Question 16

That would be used in calculating GDP include

Answer 16

Cars manufactured in Tennessee at a factory on by a Japanese automobile company

Question 17

The calculation of GDP would include

Answer 17

the income of the high school English teacher

Question 18

Concern about an international crisis because consumers to save their money and postpone bigger purchases what is the effect on aggregate demand an aggregate supply

Answer 18

Aggregate supply will decrease raising the price little and lowering real GDP

Question 19

When the economy is working properly what is the unemployment rate

Answer 19

4 to 6%

Question 20

When Allison a college math professor leaves her job at a small rural college and starts looking for a job at a large urban University she is…

Answer 20

Frictionally unemployed

Question 21

The agency that maintains the national income and product accounts and NIPA is

Answer 21

The US Department of Commerce

Question 22

If no foreign companies produced in a country that many of the countries Bill products in foreign countries that it is safe to say

Answer 22

The countries GNP is greater than its GDP

Question 23

As you move from left to right the aggregate demand curve

Answer 23

Slopes downward

Question 24

According to the cost push Theory what is responsible for inflation

Answer 24

Producers raise prices to meet increased cost

Question 25

What is the possible consequence of the following scenario because of high unemployment rates in the country of Lavonia employers offer her wages to me they're higher payroll costs and maintain profits they charge consumers more for goods and services

Answer 25

It wage price spiral of ever increasing prices

Question 26

Compared with the expenditure approach to calculating GDP the income approach is

Answer 26

more accurate

Question 27

Compared with the income approach to calculating GDP the expenditure approach is

Answer 27

More practical

Question 28

Which of these is an example of deprecation

Answer 28

A construction workers truck breaks down more often after 80,000 miles of work related driving

Question 29

What is workfare

Answer 29

A program that requires work in exchange for assistance

Question 30

If the CPI for 2001 was 177 and the CPI for 2002 was 180 the right of the place in between 2001 and 2002 was

Answer 30

1.69%

Question 31

All the following actions promote capital evening except

Answer 31

Raising taxes to pay for building roads

Question 32

Which of the following would be counted in this year's GDP

Answer 32

Bonus check a worker received this year

Question 33

Our savings leads to higher GDP in the future because

Answer 33

More capital is available for investment leading to higher output through capital deepening

Question 34

Which of the following is correct

Answer 34

The unemployment rate is ( labor force – employed)/labor force X 100

Question 35

Which of the following people is most likely to be classified as working poor

Answer 35

Carol a single mother who works 35 hours a week at a job the pay slightly above minimum-wage

Question 36

And example of a durable good would be

Answer 36

Used car

Question 37

An example of a nondurable goods would be

Answer 37

A paperback book

Question 38

How do you fears of future economic problems affect GDP

Answer 38

Consumers will spend less and save money in case future economic problems affect them GDP will be reduced

Question 39

How does distribution of income in the United States change over the last 20 years

Answer 39

It has become less equal

Question 40

A knitting factory worker who loses her job because the company has relocated to the plant to another country is an example of

Answer 40

Structural unemployment

Question 41

GMP minus the cost of deprecation of capital equipment is

Answer 41

Net national product

Question 42

GDP expressed in constant or unchanging prices is called

Answer 42

Real GDP

Question 43

What do you most economical believe about the future of business cycles

Answer 43

Business cycles will continue to drive our economy into the future but the Federal Reserve may be able to better cushion the economy from the worst extremes

Question 44

How does the Bureau of Labor Statistics from and how the market basket should be changing over time

Answer 44

By conducting a consumer expenditure survey

Question 45

If Jackson is paid and interest rate of 10% in his savings but the inflation rate has risen to 20% the purchasing power of the savings is

Answer 45

Decreased by 10%

Question 46

An example of Capital deepening would be

Answer 46

Paying for an employee to take college courses

Question 47

Which of the following is an example of a financial good or service

Answer 47

A cake purchased from a bakery for wedding

Question 48

And economy that experience is decreasing real GDP and increasing prices said to suffer from

Answer 48

Stagflation

Question 49

If the number of people classified as an in employee is 50,000 and the number of people classified as employed is 250,000 what is the unemployment

Answer 49

16.17

Question 50

Which of the following families is statistically most likely to live below the poverty threshold

Answer 50

A black family headed by single mother living in the inner-city