Exam 1 quiz questions Flashcards
Nominal variables are variables that..
have not been adjusted for changes in prices
GDP measures the value of all …
final goods and services
GDP is the most common measure of macroeconomic performance. But there’s also gross national product (GNP). Unlike GDP, the GNP measure includes …
the value of final goods and services produced by US citizens who are working in other countries.
Gross domestic product is …
a flow and the market value of all final goods.
GDP is an imperfect measure of macroeconomic activity because it does not account for the value of…
household production and underground (or shadow) economic activity
The production of services as a share of US GDP has been for over 60 years…
growing on average
If GDP is $200 in 2015 and was $160 in 2014, then what was the growth rate of GDP from 2014 to 2015?
25%
As of 2006, the average work week in the US was…
- longer than that of the Netherlands.
- shorter than that of China.
- longer than that of the United Kingdom.
Since 1964, the average work week in the US has …
decreased by about 10%
Which of the following US states has the smallest shadow economy as a percentage of its GDP on average from 1997 to 2008?
Delaware
On average, NGDP has grown _______________ RGDP in the US from 1947 through 2013.
faster than
The largest expenditures component of US GDP is…
personal consumption expenditures (C)
“Say’s Law” states that…
supply creates its own demand.
During the Great Depression (August 1929 to March 1933) the unemployment rate peaked at …
25%.
The largest income component of US GDP is …
compensation to employees
GDP = C + I + G + NX. If a carpenter purchases in nail gun for use in his carpentry business, which component will that purchase enter into?
I
GDP growth is not steady; it fluctuates and is sometimes negative. We call these fluctuations …
business cycles.
Unlike the conventionally measured unemployment rate, the underemployment rate takes into account…
part-time workers who would rather have full-time jobs and people who would like to work but who have given up looking
To convert nominal GDP into real GDP, you want to state it in terms of…
prices of a base year
The economists Claudia Goldin and Lawrence Katz have argued that the female labor force participation rate in the US rose dramatically in the 1970s due to…
the pill
The real interest rate is…
the nominal interest rate minus the inflation rate
If velocity is constant, the money supply is growing at a rate of 8% annually and the inflation rate is 6% annually, then what will the growth rate of the output of real goods and services be?
2%
The labor force consists of 100 people of which 10 people are classified as unemployed. Additionally, there are 10 discouraged workers. The unemployment rate is…
10%
In the equation of exchange, MV = PY, the right-hand-side (PY) corresponds to what in the economy?
nominal GDP
If velocity is constant, real GDP is falling, and there is deflation, then it is true that…
the money supply is growing more quickly than real GDP and nominal GDP is growing more quickly than real GDP
If the price level goes up then, all else equal, …
the purchasing power of money falls and there is inflation
You are looking at data on the consumer price index (CPI). For the version of the CPI you are looking at, the year 2000 value is 92 and the 2010 year value is 100. You can conclude that…
2010 is the base year and there was inflation from 2000 to 2010
Having low and stable inflation is desirable because…
inflation can distort financial markets and inflation can decrease the efficiency of the price system
