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Study Guides > Unit 5 > Flashcards

Unit 5 Flashcards

1
Q

How is nominal GDP converted into real GDP?

A

Through eliminating the effects of prove increase in GDP growth

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2
Q

What is the difference between a recession and a depression?

A

A depression is a particularly deep recession with high levels of unemployment

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3
Q

According to the demand-pull theory, what is responsible for inflation?

A

Demand for goods and services exceeds existing supply

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4
Q

Economists look in which of the following explanations for inflation?

A

Too much money in the economy, producers raise prices in order to meet increased costs, and the demand for goods exceeds supply, like in wartime

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5
Q

All of the following measures beep to promote technological progress EXCEPT…

A

Increase wages for researchers

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6
Q

I’m an economy, when the price level falls, consumers and firms buy more goods and service. This relationship is represented by the …

A

Aggregate demand curve

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7
Q

What is the difference between seasonal unemployment and structural unemployment?

A

Seasonal unemployment occurs because of schedules, whereas structural occurs because people lack skills

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8
Q

If the number of people employed is 150,000 and the labor force is 160,000 the unemployment rate is…

A

6.25%

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9
Q

When plotted on a Lorenzo Curve, the income distribution curve for the town of Lakeview is a straight line from 0% to 100%. This means that…

A

Everyone in Lakeview earns about the same income

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10
Q

The main economic variable that affect business cycles include all of the following EXCEPT…

A

Personal savings levels

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11
Q

The amount of money a person has left of his or her income after taxes is called…

A

Disposable personal income

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12
Q

What is an example of a positive external shock to aggregate supply?

A

Good weather leads to an unusually productive harvest for corn farmers

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13
Q

What does it mean when a person is underemployed?

A

The person has a job but they are overqualified for it

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14
Q

Which of the following might cause the inflation rate to spike up sharply?

A

Prices in world oil markets rise steeply due to war in the Middle East

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15
Q

Products that would be used in calculating GDP include…

A

Cars manufactured in Tennessee at a factory owned by a Japanese automobile company

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16
Q

The calculation of GDP would include…

A

The income of a high school English teacher

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17
Q

Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply?

A

Aggregate supply will decrease, raising the price level and lowering real GDP

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18
Q

When the economy is working properly, what is the unemployment rate?

A

4 to 6 percent

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19
Q

When Alison, a college math professor, leaves her job at a small rural college and starts looking for a job at a large urban university, she is…

A

Friction ally unemployed

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20
Q

The agency that maintains that National Income and Product Accounts (NIPA) is…

A

The US Department of Commerce

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21
Q

If no foreign companies produce in a country, but many of the country’s companies build products in foreign countries, then it is safe to say that…

A

The county’s GNP is greater Jan is GDP

22
Q

As you move from left to right, the aggregate demand curve…

A

Slopes downward

23
Q

According to the cost-push theory, what is responsible for inflation?

A

Producers raise prices to meet increased cost

24
Q

What is the possible consequence of the following scenario? Because of high unemployment rates In the country Lavernia, employers offer higher wages. To meet their higher payroll costs and maintain profits, they charge consumers more for goods and services

A

A wage price spiral of ever-increasing prices

25
Q

Compared with the expenditure approach to calculating GDP, the income approach is…

A

More accurate

26
Q

Compared with the income approach to calculating GDP, the expenditure approach is…

A

More practical

27
Q

Which of these is an example of depreciation?

A

A construction worker’s truck breaks down more often breaks after 80,000 miles of work related driving

28
Q

What is workfare?

A

A program that requires work in exchange for assistance

29
Q

If the CPI for 2001 was 177 and the CPI for 2002 was 180, the rate of inflation between 2001 and 2002 was…

A

1.69%

30
Q

All of the following actions promote capital deepening EXCEPT…

A

Raising taxes to pay for building roads

31
Q

Which of the following would be counted in this year’s GDP?

A

Bonus check a worker receives this year

32
Q

Higher savings leads to higher GDP in the future because…

A

More capital is available for investment, leading to higher output through capital deepening

33
Q

Which of the following is correct?the unemployment rate is …

A

(Labor force- employed) / labor force X 100

34
Q

Which of the following people is most likely to be classified as “working poor”?

A

Carol, a single e mother who works 35 hours a week at a job that pays slightly above minimum wage

35
Q

An example of a durable good would be…

A

A used car

36
Q

An example of a nondurable good is…

A

A paperback book

37
Q

How do fears of future economic problems affect GDP?

A

Consumers will spend less and save money in case future economic problems affect them; GDP will be reduced

38
Q

How has the distribution of income in the United States changed over the last 20 years?

A

It has become less equal

39
Q

A knitting factory worker who loses her job because the company has relocated the plant to another county’s is an example of …

A

Structural unemployment

40
Q

GNP minus the cost of depreciation of capital equipment is…

A

Net national product

41
Q

GDP expressed in constant, or unchanging, prices is called…

A

Real GDP

42
Q

What do most economist believe about the future of business cycles?

A

Business cycles will continue to drive our economic in the future but the Federal Reserve may be able to better cushion the economy from the worst extremes

43
Q

How does the Bureau of Labor Statistics determine how the market basket should change over time?

A

By conducting a consumer expenditure survey

44
Q

If Jackson is paid an interest rate of 10% in his savings, but the inflation rate has risen to 20%, the purchasing power of his savings is …

A

Decreased by 10%

45
Q

An example of capital deepening would be…

A

Paying for an employee to take college courses

46
Q

Which of the following is an example of a final good or service?

A

A cake purchased for a bakery for a wedding

47
Q

An economy that experiences decreasing real GDP and increasing prices is said to suffer from…

A

Stagflation

48
Q

Is the number of people classified as unemployed is 50,000 and the number of pistols classified as employed is 250,000, what is the unemployment rate?

A

16.17

49
Q

Which of the following families is statistically the most likely to live below the poverty threshold?

A

A black family headed by a single mother living in the inner city

50
Q

An accurate statement about the Great Depression would be that…

A

It was the most severe economic found turn in the history of industrial capitalism

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