Module 4-7 Quiz Flashcards
GDP is:
The value of final goods and services produced domestically
Which of the following are most likely classified by economists as consumer durable goods?
automobiles, furniture
___ is a small category that refers to the goods produced by one business that have yet to be sold to consumers, and are either still sitting in warehouses and on store shelves
inventories
____ are now the largest single component of the supply side of GDP, representing over half of GDP
services
Durable goods and non-durable goods comprise approximately ___ of the supply side of the GDP
45%
Which of the following is included in GDP calculations?
the university tuition paid to enroll in a course
A business cycle reflects changes in economic activity, particularly real GDP. The stages of business cycle are:
expansion, peak, recession, trough
GDP does not directly include
the value of intermediate goods sold during a period
Which of the following is true?
The expansions and contractions of real world business cycles last vary length of time and often differ in magnitude
For most high income countries of the world, GDP__overtime
Has risen gradually
If imports exceeded exports, as a recent years, then _____ exist
Trade deficit
On the demand side of GDP, consumption by ___ is the largest component of GDP, accounting for about 2/3 of the GDP in any year
Households
The gap between exports and imports in a nations economy is called the
Trade balance
_____, which can be approximated by the growth of gross domestic product, ultimately determines the prevailing standard of living in a country
Economic growth
Once every _____, the census bureau does a comprehensive survey of housing and residential finance
10 years
On the supply side of the GDP, structures account for around ____ of US GDP
7%
The change in inventories, a component of aggregate supply, compromises, roughly ____ of GDP
0.5%
Which of the following statements are true?
GDP includes spending on recreation and travel, but does not cover leisure time
The difference between nominal GBP and real GDP is:
Real GDP adjusts for inflation
The nominal value of any economic statistic refers to the number that is actually announced at that time, while the _____ refers to the statistic after it has been adjusted for inflation
Real value
MODULE 5
During the last two centuries, the average rate of growth of GDP per capita in the leading institutionalized countries have averaged about ____ per year
2%
_______ is a term which refers to the widespread use of power driven machinery and the economic and social changes that resulted in the first half of the 1800.
The Industrial Revolution
_______ is a term which refers to the widespread use of power driven machinery and the economic and social changes that resulted in the first half of the 1800.
The Industrial Revolution
To achieve a high standard of living, a nation should
Promote economic growth
in the long run, the most important source of increase in a nation’s standard of living is a:
high rate of economic growth
When society has a higher level of capital per person, it is called

Capital deepening
A nation can achieve higher economic growth if
It devotes more resources to search and development

_____ is output per hour in the business sector
Productivity
Assuming a countries economy maintains an 8% rate of growth, young adults starting at age 20 would see the average standard of living in their country country more than double by the time they have reached age ___
30
Which of the following is correct ?
Increased education adds to the stock of human capital, not unlike building factories ads to the stock of physical capital
Investment in human capital
Is characterized by both B and C
Economist typically measure economic growth by tracking
Real GDP per capita
Which of the following is most likely to contribute to economic growth as measured by GDP per capita
Increased capital formation
Country evil and country Baker initially have the same real GDP per capita country able experiences no economic growth while country baker shows at a sustained rate of 7% in 12 years country. Bakers GDP will approximately ___ that of country evil. 
Double
Which of the government policies below is most unlikely to encourage per capita economic growth
high taxes on companies that spent a lot of capital formation
Over the long run, ____ per hour is the most important determinant of the average wage level in any economy
Productivity
Increased investment loan will guarantee economic growth 
This is a false statement, because economic growth hinges on the quality and type of investment as well as a human capital and improvements in TEC
Which of the following best describes the relationship between economic growth, and literacy
Increase literacy, stimulates, economic growth by raising labor, production, and as economy, growth people consume more education 
Which of the following is unlikely to affect the rate of economic growth 
The level of government spending
A country will roughly double its GDP in 20 years if it’s annual growth rate
3.5
Since the late 1950s, economist are performed “growth accounting” studies in the US. Deceive determine that ___ is typically the most important contributor to US economic.
Technology
MODULE 6
Frictional unemployment is:
Unemployment that is due to normal turnover in the labor market 
The unemployment rate measures
Unemployed workers as a percentage of the labor force
During the deep recessions of the early 1980s end of 2007 through 2009, unemployment reached roughly
10
In macro economics, the connection from inputs to outputs for the entire economy is called
Aggregate production function
The value of what is produced per worker, or per hour worked is called
Productivity
A welder who quit his job and moved from Pennsylvania to Madison to try to get a better welding job is said to be
Fractionally unemployed
Regina looked for work for six months, but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he’s considered. 
Out of the labor force
If the unemployment rate is 8% then this means :
8 % of the labor force is unemployed
If the number of employed person in a country equals 24 million, the number of unemployed persons equals 8 million and the number of persons over 16 in the population equals 40 million unemployment rate equals 
25%
If a nation sleeper force receives a significant influx of young workers 
The natural rate of unemployment is likely to increase
The rise in unemployment that occurs because of recession is known as cycle unemployment, because it is closely tied to them 
Business cycle
Karen chooses to go to university full time rather than to work. Karen:
Is not part of the labor force
Karen chooses to go to university full time rather than to work. Karen:
Is not part of the labor force
The unemployment rate in a town in which 65,400 persons are employed and 11,000 are unemployed equals
14.4
_____ argues that the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate
Efficiency wage theory
_____ argues that the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate
Efficiency wage theory
Cyclincial unemployment arises when:
Business activity in the macroeconomy declines
Frictional unemployment occurs when:
A worker decides to quit one job to seek a different job
Frictional unemployment occurs when:
A worker decides to quit one job to seek a different job
A forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession is defined as
Cyclically unemployment
The development of a nationwide computerized job bank listing of all job openings would be most likely to reduce
Frictional unemployment
The unemployment rate may overestimate the true extent of unemployment if
either B or C
Public Policy is concerned, this way to battle unemployment would be 
To minimize recessions
Public Policy is concerned, this way to battle unemployment would be 
To minimize recessions
The labor force consists of:
All adults who are working or actively seeking work
The unemployment rate may underestimate the true extent of unemployment if
Many part time employees would like to work full time but are unable to get the additional work
A university student who is enrolled I school full time and not seeking employment is considered
Out of the labor force
The extent of ____ will depend on how easy it is for workers to learn about alternative jobs which may reflect the ease of communications about job prospects in the economy
Fritical unemployment
MODULE 8
_____ implies that pressure for price increases reached across ___ markets not just one
Inflation ; most
While one occasionally sees references to inflation over short time periods, the term typically implies a(n) ____ in prices
Ongoing rise
The effects of inflation are seen in 
Good, services, wages, and income levels 
Inflation implies that the level of all prices ____
Increase
Inflation can be calculated in terms of how the overall cost of ___ changes overtime
The basket of goods
If the price index moves from 107 to 110, the rate of inflation
2.8
The most commonly sided measure of inflation in the US is 
The consumer pride index (CPI)
One of the reasons that rise in the price of a fixed basket of goods, overtime tends to overstate the rise of the consumers true cost-of-living is
Substitution bias
The percentage change in the price level from one time period to the next, whether the price level is measured in terms of money or as a price index, will be the 
Inflation rate
The percentage change in the price level from one time period to the next, whether the price level is measured in terms of money or as a price index, will be the 
Inflation rate
Two factors that complicate, the calculation of the inflation rate are
Substitution and quality/new product biased
When we want to measure wage inflation in the labor market, we use the
Employment cost index
The producer price index is based on prices, paid for supplies and inputs by
Producers of goods and services
Another term used to describe negative inflation is
Deflation
Another term used to describe negative inflation is
Deflation
Which of the following is an example of one of the major categories in the overall CPI
Recreation
The situation where the buying power of money in terms of goods and services increases is called
Deflation
Which of the following is the name used to describe the price index that consist of immediate goods and finish goods?
Producer price index
What name is given to the index based on the prices of exported and imported merchandise?
International price index
An economist professor is discussing a measure of inflation overtime based on a basket of goods comprised to all the components of GPD what measure is this?
GDP deflator
An economist professor is discussing a measure of inflation overtime based on a basket of goods comprised to all the components of GPD what measure is this?
GDP deflator
With regards to the economy, the term negative inflation is synonymous with which of the following
Deflation
What distinguishes the real value of a statistic from the nominal value of statistic
Adjusting for inflation
When you price wage, your interest rate is adjusted automatically with inflation it is said to be
Indexed
The effect of substitution bias is that the rise and the price of a fixed basket of good overtime tends to ____ the rides, any consumers true cost-of-living, because it does not take into account that the person can substitute between because according to changes in their relative prices
Overstate
The _____ is the nominal interest rate minus the rate of inflation
Real interest rate
A payment is said to be ____ if it is a automatically adjusted for inflation
Indexed
A lender demand an interest rate important to compensate for any expected ____, so that the money that is repaid in the future will have at least as much buying power as the money that was originally loaned
Inflation
