Economics Module 10 Flashcards
A share of stock purchased from another individual on the New York Stock Exchange is __________.
not included
A share of IBM stock purchased from IBM is ____________.
not included
A BMW made in Germany sold to an individual in the U.S. is ___________. Select all that apply.
a
consumption
d
net exports
e
does not affect total GDP of the U.S.
A Toyota made in Tennessee and sold in the U.S. is _________.
consumption
A Social Security payment is _________.
not included
A new school building paid for with state and federal money is ________.
government
A new baseball glove that is not sold is __________.
investment
A house purchased from another family is ___________.
not included
A new house purchased from the builder is ____________.
investment
A Chevrolet produced in Detroit sold to an Argentine company is _________.
net exports
A college education purchased by an individual is ________.
consumption
A concert produced by a nonprofit corporation is __________.
consumption
The monthly apartment rent is _____________.
consumption
The value of plumbing an individual does herself in her house is __________.
not included
The value of plumbing an individual does in her neighbor’s house for which she is paid is ___________.
consumption
The cost of pollution produced by automobiles is ____________.
not included
Pollution of a river by a factory which results in the company saving money is ____________.
not included
A policeman’s salary is ________.
government
A new automobile which is produced in the U.S. and purchased by an individual in the U.S.?
Purchased by a company in the U.S.?
By a government in the U.S.?
a
Consumption
b
Investment
c
Government
What is the unemployment rate in your country?
4%
The natural rate of unemployment in your country is:
2%
What can the unemployment rate you found above tell you about the economy? It is:
In a bust
There are 100,000 citizens able to participate in the workforce in the land of Productivia. If 75,000 people are working, what is the unemployment rate in Productivia?
unable to determine
When new workers join the labor force, and most of them find jobs, the unemployment rate will still rise. True or False?
True
Which one of the following is the largest part of national income?
Wages
Indicate the effects of the following on the components of real GDP. An increase in the U.S. consumption of foreign-grown bananas as substitutes for U.S. grown oranges will cause:
No change in consumption and an increase in imports
i. Adam (who lives in England) shears wool from his sheep and sells it to Karl (who lives in Germany) for $1400
ii. Karl uses the wool purchased from Adam to weave into woollen cloth that he then sells to Leon (who also lives in Germany) for $1600.
iii. Leon sells the woollen cloth to Alfred (who lives in England) for $2000.
iv. Alfred then tailors a bespoke suit for John (who lives in England) for $5000.
Suppose that these are the only transactions in the two countries, and that they all take place in the year 2017. The GDPs of the United Kingdom and Germany (measured in dollars), respectively, are:
$4400 and $600
i. Adam (who lives in England) shears wool from his sheep and sells it to Karl (who lives in Germany) for $1400
ii. Karl uses the wool purchased from Adam to weave into woollen cloth that he then sells to Leon (who also lives in Germany) for $1600.
iii. Leon sells the woollen cloth to Alfred (who lives in England) for $2000.
iv. Alfred then tailors a bespoke suit for John (who lives in England) for $5000.
Suppose that transactions 1) and 2) occurred in 2016 and transactions 3) and 4) occurred in 2017. GDP in the United Kingdom in 2016 and 2017, respectively, are:
$1400 and $3000
i. Adam (who lives in England) shears wool from his sheep and sells it to Karl (who lives in Germany) for $1400
ii. Karl uses the wool purchased from Adam to weave into woollen cloth that he then sells to Leon (who also lives in Germany) for $1600.
iii. Leon sells the woollen cloth to Alfred (who lives in England) for $2000.
iv. Alfred then tailors a bespoke suit for John (who lives in England) for $5000.
Given these transactions, what is the growth rate in GDP in the United Kingdom between 2016 and 2017?
114%
Indicate what category the purchase of services of a U.S. lawyer in the U.S. by a Japanese citizen in Japan would fall under in regards to the U.S. GDP.
Exports
Consider Jolly Old England in which there are just three new, domestically produced goods and services: Soused Hog’s Face, Porter and Suet Pudding. Listed below are the prices and quantities of these goods in the base year and the current year in dollars rather than pounds. The price index in the base year is:
100
Consider Jolly Old England in which there are just three new, domestically produced goods and services: Soused Hog’s Face, Porter and Suet Pudding. Listed below are the prices and quantities of these goods in the base year and the current year in dollars rather than pounds. The price index in the current year is:
115
Consider Jolly Old England in which there are just three new, domestically produced goods and services: Soused Hog’s Face, Porter and Suet Pudding. Listed below are the prices and quantities of these goods in the base year and the current year in dollars rather than pounds. The growth rate in England’s price level is:
15% which is inflation
Consider Jolly Old England in which there are just three new, domestically produced goods and services: Soused Hog’s Face, Porter and Suet Pudding. Listed below are the prices and quantities of these goods in the base year and the current year in dollars rather than pounds. Real GDP in the current year for England is (to the nearest dollar):
$2500
Consider Jolly Old England in which there are just three new, domestically produced goods and services: Soused Hog’s Face, Porter and Suet Pudding. Listed below are the prices and quantities of these goods in the base year and the current year in dollars rather than pounds. Real GDP growth in England is:
25%
We have reached full employment when which of the following is true?
Cyclical unemployment is zero, but frictional and structural unemployment are positive.
Which of the following would be counted as unemployed?
A lawyer who just resigned from her firm, and is looking for a new position
Given an announcement of increased numbers of unemployed individuals, what must be happening to the unemployment rate? The unemployment rate:
will decrease if employment rises more rapidly than unemployment
The Bureau of Labor Statistics released November’s employment statistics on the morning of December 4th. The information in the table was given. What is the unemployment rate?
4.85%
The Bureau of Labor Statistics released November’s employment statistics on the morning of December 4th. The information in the table was given. What is the labor force participation rate?
64.91%
The Bureau of Labor Statistics released November’s employment statistics on the morning of December 4th. The information in the table was given. If the natural rate of unemployment is estimated to be 4.50%, what is cyclical unemployment for the US?
0.35%
If the rate of inflation is 5% and the nominal rate of interest is 9%, what is the real rate of interest?
4%
If the rate of inflation is 6 percent and the current nominal interest rate is 10 percent, the real interest rate is:
4%
You are given the following data.
The average price level from one year to the next has increased by 3%.
The average level of income has increased by 5%.
Real income has:
Increased by 2%.
Which of the following is true in an economy with a high and rising rate of inflation?
Lenders are hurt
A price index that is used to measure inflation will do which of the following?
Hold quantities constant
If the Consumer Price Index for one year was 124.0 and for the next year was 130.7, what was the approximate rate of inflation?
5.4%
If the Consumer Price Index for one year was 150.0 and the rate of inflation from that year to the next was 10 percent, what would be the Consumer Price Index in the second year?
165.0
Suppose that last year, the GDP of this economy was $215 million. We are interested in how much of the increase since last year was due to actual increases in production rather than just increases in prices. Which of the following measures would not be influenced by an increase in prices? Choose all that apply.
c
Real GDP
d
Real GDP per capita
Which of the following would you use to find the inflation rate for the period between 1980 and 2020?
Sum of 2020 prices multiplied by 1980 quantities, divided by sum of 1980 prices multiplied by 1980 quantities, multiplied by 100
The inflation rate for 2020 is slightly greater than the inflation rate for 2019.
True.
How would these changes to wages and interest rates, influenced by the rate of inflation, impact the GDP?
a
The change in wages leads to higher consumption. This would increase the nominal GDP if all else remained equal.
b
The change in nominal GDP would be dependant on how large an effect the change in both wages and interest rates have.
d
The change in interest rates discourages consumption. This would decrease real GDP if all else remained equal.
If Gross Domestic Product was reported to be $19,246.7 Billion. If Consumption is $13,308.6 Billion, Investment is $3,174.1 Billion, Government Expenditures is $3,330.9, and Imports are 2,883.3, how much did the US export that year?
$2,316.4 Billion
Suppose that the size of the population eligible to participate in the labor force is 255,357 thousand, the number of employed individuals is 153,439, and the number of unemployed individuals is 7,132. What is the unemployment rate?
4.44%
Suppose rea1 GDP rises by 3.2 percent. What is the rate of change in nominal GDP?
3.2 percent plus the rate of inflation.
Which component of real GDP accounts for the largest portion of GDP?
Consumption
If imports decrease in a quarter, what happens to real GDP?
increases
If price levels increase by 3% and total spending in the economy has increased by 5%, what has happened to real GDP?
Increase of 2%
In calculating GDP in a country, do we add or subtract imports?
Subtract imports
If real consumption spending increases by 5 percent, what is likely to happen to overall GDP?
Increase by a little over 3%.
