Bonus round Flashcards
Most economists who have studied it believe that the great depression was caused by?
Poor economic policy making
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 __________
16,000 and 20,000
Out put per person is output/population
Labor productivity is output/labor
inflation was a major problem in the United States during the
1970s
Before 1970 the united states generally had a trade _____ and since 1970 the United states has generally run a trade ________
Surplus and deficit
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
D
Fiscal policy refers to
Decisions to determine the government budget
Decisions to reduce the money supply are made by _______ and are an example of ______ policy
The federal reserve; Monetary
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
Positive and normative
The adding up of individual economic variables to obtain economy wide totals is called
Aggregation
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?
7.00
add up all market goods to get value
(10 x 0.20 = 2.00) + (5 x 1 = 5) = 7
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.
A new computer sold to a business firm
How do you do value added?
revenue of the item - revenue of last item = value added
Which of the following would be incluided in the GDP of the united states?
Anything made in the US. Anything sold to the US.
Investment spending includes spending on
Capital goods, residential housing and changes in inventories
Government purchases include all of the following except
Social security benefits by the federal government
GDP can be measured as each of the following except
Total business revenues
GDP would be a better measure of economic well-being if it included
The value of liesure
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?
Unemployment is unemployed/employed
120-114 = 6 million unemployed
6/114 = 5%
Unemployment is 5%
the consumer price index measures the cost of a
FIXED basket of goods
A real quantity is a quantity measured in?
PHYSICAL terms
The process of dividing a nominal quantity by a price index in order to express the quantity in real terms is called
Defalting! NOT indexing
The substitution bias in the CPI refers to failure of statisticians to
Allow for the possibility that consumers switch from products whose prices are rising
To prevent people paying a higher percentage of their income in taxes even when their real incomes have not changed, congress
indexed the income tax brackets to the CPI
The extra cost incurred to avoid holding cash when their is inflation are called the
shoe leather costs
