Bonus round

Question 1

Most economists who have studied it believe that the great depression was caused by?

Answer 1

Poor economic policy making

Question 2

In econland total output is 8mil, population equals 500,000 people, and of these, 400,000 are employed workers. Output per person in econland equals _______ and average labor productivity equals __________

Answer 2

16,000 and 20,000
Out put per person is output/population

Labor productivity is output/labor

Question 3

inflation was a major problem in the United States during the

Answer 3

1970s

Question 4

Before 1970 the united states generally had a trade _____ and since 1970 the United states has generally run a trade ________

Answer 4

Surplus and deficit

Question 5

Macroeconomics issues include all of the following except
a) economic growth and living standards
b) Inflation
c) economic interdependence among nation s
d) regulation of natural monopolies

Answer 5

D

Question 6

Fiscal policy refers to

Answer 6

Decisions to determine the government budget

Question 7

Decisions to reduce the money supply are made by _______ and are an example of ______ policy

Answer 7

The federal reserve; Monetary

Question 8

U.S. exports will increase as a result of joined CAFTA” is an example of __________ statement and “The U.S. should join CAFTA is an example of ______ statement

Answer 8

Positive and normative

Question 9

The adding up of individual economic variables to obtain economy wide totals is called

Answer 9

Aggregation

Question 10

Suppose that the total production of an economy consists of 10 oranges and 5 candy bars, each orange sells for 0.20 cents and each candy sells for $1. What is the market value of production in this economy?

Answer 10

7.00
add up all market goods to get value
(10 x 0.20 = 2.00) + (5 x 1 = 5) = 7

Question 11

Which of the following would be classified as a final good>?

1) services provided by lawyers to a computer manufacturer
2) Computer chips sold to a computer manufacturer for installation in new computers
3) new computer software sold to a computer manufacturer for installation in new computers
4) a new computer sold to a business firm.

Answer 11

A new computer sold to a business firm

Question 12

How do you do value added?

Answer 12

revenue of the item - revenue of last item = value added

Question 13

Which of the following would be incluided in the GDP of the united states?

Answer 13

Anything made in the US. Anything sold to the US.

Question 14

Investment spending includes spending on

Answer 14

Capital goods, residential housing and changes in inventories

Question 15

Government purchases include all of the following except

Answer 15

Social security benefits by the federal government

Question 16

GDP can be measured as each of the following except

Answer 16

Total business revenues

Question 17

GDP would be a better measure of economic well-being if it included

Answer 17

The value of liesure

Question 18

In a country with 200 million people aged 16 years and older, 120 million are in the labor force, and 114 million are employed, what is the unemployment rate?

Answer 18

Unemployment is unemployed/employed

120-114 = 6 million unemployed

6/114 = 5%

Unemployment is 5%

Question 19

the consumer price index measures the cost of a

Answer 19

FIXED basket of goods

Question 20

A real quantity is a quantity measured in?

Answer 20

PHYSICAL terms

Question 21

The process of dividing a nominal quantity by a price index in order to express the quantity in real terms is called

Answer 21

Defalting! NOT indexing

Question 22

The substitution bias in the CPI refers to failure of statisticians to

Answer 22

Allow for the possibility that consumers switch from products whose prices are rising

Question 23

To prevent people paying a higher percentage of their income in taxes even when their real incomes have not changed, congress

Answer 23

indexed the income tax brackets to the CPI

Question 24

The extra cost incurred to avoid holding cash when their is inflation are called the

Answer 24

shoe leather costs

Question 25

The real costs of inflation to society include

Answer 25

Interference with long term planning

Question 26

The fisher effect is the tendency for _______ interest rates to be _________ when inflation is high

Answer 26

Nominal and high

Question 27

What are the four types of expenditure in GDP? and which is the largest

Answer 27

1. consumption
2. investment
3. government spending on goods and services (LARGE)
4. net exports