GDP is the market value of:
Economic resources used in the production of annual output in an economy
National income distributed to producers, consumers, and investors in an economy
Consumption and investmen
...
GDP is the market value of:
Economic resources used in the production of annual output in an economy
National income distributed to producers, consumers, and investors in an economy
Consumption and investment spending in an economy in a given year
All final goods and services produced in an economy in a given year
Money spent on the purchase of a new house is included in the GDP as a part of:
Personal saving
Personal consumption expenditures
Investment
(WRONG!) The consumption of private fixed capital
A recession is a decline in:
The natural rate of unemployment
The full-employment unemployment rate over a year
GDP that lasts six months or longer
GDP that lasts one year or longer
Other things equal, the provision of a per unit subsidy for a product will:
increase its price.
decrease its demand.
decrease the quantity sold.
increase its supply.
GDP tends to underestimate the productive activity in the economy because it excludes the value of output from:
The consumption of fixed capital
The underground economy
Public transfer payments to households
Intermediate goods
The money income of households consists of the sum of:
wages plus rents plus interest plus profits.
consumption expenditures plus profits.
consumption expenditures plus costs of resources.
(WRONG) wages plus salaries.
The branch of economics that focuses primarily on aggregates is:
macroeconomics.
consumer economics.
microeconomics.
scientific economics.
The primary focus of the study of economics is with:
making the most efficient use of scarce productive resources.
equalizing the distribution of consumer income and wealth.
reallocating resources from consumption to production in the economy.
expanding the production of goods and services.
The best example of a "frictionally unemployed" worker is one who:
Reduces productivity by causing frictions in a business
Is discouraged and not actively seeking work
Is laid off during a recessionary period in the economy
Is in the process of voluntarily switching jobs
Which would be considered a macroeconomic study? A study of the effect of:
interest rates on a firm's investment.
a decrease in the price of automobiles on automobile sales.
government spending to increase employment.
a new tax on the profits of a business.
Exports less imports may be defined as:
Net investment
Net imports
Net exports
Foreign exchange
Which of the following is a private transfer payment?
The sale of used clothing at a thrift store
The Social Security benefits sent to a retired worker
A check for $100 sent by a parent to a daughter at college
The sale of shares of stock in Wal-Mart
Price ceilings and price floors:
make the rationing function of free markets more efficient.
cause surpluses and shortages respectively.
shift demand and supply curves and therefore have no effect on the rationing function of prices.
interfere with the rationing function of prices.
If an economy is producing at a point inside a production possibilities curve:
resources are unemployed.
the economy is efficient.
there is economic growth.
resources are fully employed.
A nation has a population of 300 million people. Of these, 80 million are retired, in the military, in institutions, or under 16 years old. There are 210 million who are employed and 10 million who are unemployed. What is the unemployment rate?
3.3 percent
3.6 percent
5.2 percent
4.5 percent
If the secular trend of labor productivity is 3 percent per year, the number of years that it will take for the standard of living to double will be about:
20 years.
15 years.
23 years.
17 years.
Macroeconomics is the study of economics from the standpoint of:
individual economic units.
the overall economy.
a typical firm.
a typical household.
Question 18
5 / 5 pts
The Great Depression of the 1930s resulted in a decline in real GDP of about:
30 percent
20 percent
10 percent
40 percent
Which of the following would be primarily determined in the resource market?
the wage rates for electricians
the amount of money in circulation
the number of automobiles produced
the price of compact discs
An example of an intermediate good or service would be:
A calculator purchased by a college student for taking exams
A house bought by a banking executive with five children
A boat bought by a medical doctor for use on vacation
Gasoline used by an insurance agent visiting clients
Which of the following would mostly likely increase the demand for gasoline?
a widespread shift in car ownership from SUVs to hybrid sedans.
the expectation by consumers that gasoline prices will be higher in the future.
the expectation by consumers that gasoline prices will be lower in the future.
a decrease in the price of public transportation.
Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to:
lower their price and reduce their quantity supplied.
raise their price and increase their quantity supplied.
lower their price and increase their quantity supplied.
raise their price and reduce their quantity supplied.
After graduating from high school, Ron Willis plans to go to college. The college tuition is
$15,000 a year. But, instead of going to college, Ron could take a full-time job paying
$20,000. If Ron decides to go to college, what is his opportunity cost for attending for one year?
$15,000
$35,000
$20,000
$5,000
At the point where the demand and supply curves for a product intersect:
the quantity that consumers want to purchase and the amount producers choose to sell are the same.
either a shortage or a surplus of the product might exist, depending on the degree of competition.
the market may, or may not, be in equilibrium.
the selling price and the buying price need not be equal.
Search and wait unemployment is another way to describe:
Frictional unemployment
Cyclical unemployment
Structural unemployment
Noncyclical unemployment
Which is not considered to be an economic resource?
land (or natural resources)
tools and machinery
labor
money
Some economists prefer to use the term business fluctuations rather than business cycles to describe the historical growth record in the United States because:
Cycles imply regularity while fluctuations do not
Cycles include a trough phase while fluctuations do not
Fluctuations are relatively predictable events
Fluctuations include an expansion phase while cycles do not
Use the figure below to answer the following question:
Refer to the above diagram. A price of $60 in this market will result in:
a surplus of 100 units.
a shortage of 50 units.
equilibrium.
a surplus of 50 units.
Data from the registrar's office at Gigantic State University indicate that over the past
twenty years tuition and enrollment have both increased. From this information we can conclude that:
GSU's supply curve of education is downsloping.
school-age population, incomes, and preferences for education have changed over the twenty- year period.
higher education is an exception to the law of demand.
the supply of education provided by GSU has also increased over the twenty-year period.
Which of the following would not shift the demand curve for beef?
a reduction in the price of cattle feed
a change in the incomes of beef consumers
a widely publicized study that indicates beef increases one's cholesterol
an effective advertising campaign by pork producers
What effect will each of the following have on the supply of auto tires?
a. A technological advance in the methods of producing tires.
b. A decline in the number of firms in the tire industry.
c. An increase in the price of rubber used in the production of tires.
Your Answer:
A technological advance in the methods of producing tires will result in an increase of supply because advancements in technology allows the tire manufacturers to produce more tires using the same amount of inputs.
A decline in the number of firms in the tire industry will result in a decrease in supply because there are less firms in the tire industry.
An increase in the price of rubber used in the production of tires will cause a decrease in supply because the increase of rubber will cause an increase in production costs and ultimately cause each firm to either charge a higher price or supply less at each price.
a. Supply will increase because the technological advance allows the tire manufacturers to produce more tires using the same amount of inputs.
b. Supply will decrease because there are fewer firms in the industry.
c. Supply will decrease because the increase in the price of rubber results in an increase in production costs. Thus, each firm will need to charge a higher price at each level of output (or supply less at each price).
Which of the following would be included in a given year's GDP calculations?
a. The money you receive when you sell your macroeconomics textbook at the end of the course.
b. The herbs that you grow in your garden for family consumption.
c. Helping your sister mow her lawn on your day off.
Explain why they are or are not included in GDP.
Your Answer:
a. The money you receive when you sell your macroeconomics textbook at the end of the course is not included in a given year's GDP calculations, because resold items do not count towards the GDP.
b. The herbs that you grow in your garden for family consumption are not included in a given year's GDP because it does not pass through the market.
c. Helping your sister mow her lawn on your day off is not included in the GDP because the transaction does not pass through the market
a. Not included – does not pass through the market
b. Not included – transaction does not pass through the market
c. Not included – resold goods do not count towards GDP
Indicate whether each of the following statements applies to microeconomics or macroeconomics:
a. U.S. output, adjusted for inflation, grew by 2.2% in 2007.
b. The unemployment rate in the United States was 5.0% in April 2008.
c. The consumer price index rose by 2.8% in 2007.
d. A U.S. software firm discharged 15 workers last month and transferred the work to India.
e. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise.
Your Answer:
a. U.S. output, adjusted for inflation, grew by 2.2% in 2007.
Macroeconomics
b. The unemployment rate in the United States was 5.0% in April 2008.
Macroeconomics
c. The consumer price index rose by 2.8% in 2007.
Macroeconomics
d. A U.S. software firm discharged 15 workers last month and transferred the work to India.
Microeconomics
e. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise.
Microeconomics
Macroeconomics – (a), (b), and (c) Microeconomics – (d) and (e)
Discuss three features or characteristics of the Market System.
Your Answer:
Private property
Most property assets (land and capital) are owned by private individuals and companies in a market system, not by the state. The right to private property combined with the ability to sign legally binding contracts allows individuals and businesses to acquire, use and dispose of property assets as they wish. Property rights have the most important consequences of encouraging people to cooperate by helping to ensure that only mutually agreeable economic transactions take place.
Freedom of Enterprise and Choice
The market system requires different economic units to make certain choices that are expressed and implemented on the market of the economy. Enterprise freedom ensures that entrepreneurs and private enterprises are free to obtain and use economic resources to produce and sell their selection of goods and services in their selected markets. Freedom of choice enables owners to employ and dispose of their property and money as they please.
Self-Interest
Is the motivating force of the different economic units voicing their free choices. Self-interest means that each economic unit tries to achieve its own specific goal, which usually involves providing some value to others.
Private Property, Freedom of Enterprise and Choice, Self-Interest, Competition, Markets and Prices, Technology and Capital Goods, Specialization, Use of Money, Active, but Limited, Government.
Quiz Score: 140 out of 250
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