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Macro CH 1-9
Macro CH 1-9
60 terms
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review for midterm
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Questions
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Answers
1
Allocative efficiency is the mix of goods and services most valued by society
false
true
2
Ceteris paribus is the
all things unequal assumption
all things equal assumption
all things square assumption
all things fair assumption
3
GDP is a calculation of
the value of final goods and services produced world wide in a year
the value of raw goods and services produced in an economy in a year
the value of final goods and services produced in an economy in a year
the value of final goods and services produced world wide in a year
4
The government's ability to coerce enhances economic activity by
encouraging inequality
adding to market failures
eliminating inequality
correcting market failures
5
GDP can be calculated by all of the following except
income
expenditure or spending
IOUs
product or output
6
The expenditure approach to calculating the GDP = consumer spending +
business spending + government spending + net income
business spending + government spending + net imports
business spending + government spending + exports
business spending + government spending + net exports
7
What is an example of a public good
medicare
coffee
personal computers
clothing
8
What is an event that occurs in the economy that was unexpected?
government intervention
the invisible hand
an economic shock
an upswing in the real GDP
9
GDP per capita equals
consumption/GDP
GDP/population
population/GDP
GDP/consumption
10
Economic shocks occur when something is expected to happen but something else happens
true
false
11
Market systems require
buyers and sellers
the exchange of goods but not services
the exchange of services but not goods
supply and demand
12
Households are the main source of saving and businesses are the main economic investors
true
false
13
What is a source of government failure
nominal GDP
the invisible hand
the massive size and scope
market failures
14
What do public goods not have
free rider
non excludability
non rivalry
rivalry
15
Complimentary goods are
tennis balls and golf clubs
golf balls and fly swatters
tennis balls and tennis rackets
golf balls and tennis rackets
16
Economic growth is measured in all of the following except
actual GDP over time
nominal GDP over time
real GDP per capita over time
real GDP over time
17
The CPI does all of the following except
determine income tax brackets
measure a basket of goods
determine projected income
determine inflation
18
Scarcity
has no relevance to economic theories
restricts options and demands choices
has some relevance to economic thoeries
demands options and restricts choices
19
Which of the following is an example of inflation
cost push inflation
demand push inflation
supply demand inflation
cost demand inflation
20
What system rests on private ownership of property & freedom of enterprise and choice
market
closed
command
open
21
Inflation is the general rising of price levels
false
true
22
What is the correct order of the business cycles
peak, growth, trough, expansion
peak, growth, expansion, trough
peak, recession, expansion, trough
peak, recession, trough, expansion
23
All of the following are stabilization policies except for
monetary policy
judicial policy
fiscal policy
24
You could do well on the midterm unless
review the textbook and chapter notes provided
you don't take the time to study
you don't adhere to the academic honesty policy
you don't bring a number 2 pencil
25
Productive efficiency is when the production of a good occurs in the most costly way
true
false
26
What do business cycles reflect?
recurring upswings and downswings in nominal GDP
decreases in equilibrium
increases in equilibrium
recurring upswings and downswings in real GDP
27
Determinates of growth are all of the following except
efficiency factors
supply factors
nominal factors
demand factors
28
The law of supply shows the relationship between price rising and quantity rising and
price falling and quantity stays the same
price falling and quantity falling
price falling and quantity rising
price rising and quantity falling
29
A positive externality occurs when
negativity occurs to third parties
benefits occur to third parties
consumers assume all costs
producers assume all costs
30
Unemployment is not calculated with
part time workers
discouraged workers
those employed
those seeking employment
31
All of the following are unfunded liabilities except for
unemployment payments
social security
medicare
32
All of the following are reasons for government failure except
no invisible hand
no bureaucracy
massive size and scope
abundance of paperwork and inflexibility
33
Positive externalities are the result of demand side market failures
true
false
34
What is the key difference between public and private firms
Private firms contribute to real GDP, public firms do not
Private firms must return a profit
Public firms can force people to do things
Public firms can cease to exist
35
Aggregate is the
collection of specific economic units treated as two units
collection of specific economic units treated as one unit
collection of specific economic units treated as three units
collection of specific economic units treated as four units
36
Fiscal Policy refers to _____ and Monetary Policy refers to
taxes and self interest
self interest and money
taxes & government spending and interest rates
taxes and the value of a dollar
37
Gross Domestic Product is calculated by
C + S + G + Xn
C + Ig + G - Xn
C + Ig + G + Xn
C + S + G - Xn
38
The inverse relationship between price and quantity is the
law of demand
law of goods
law of supply
law of services
39
Choosing one activity over another activity refers to
market failures
opportunity cost
supply and demand
nominal GDP
40
The 4 economic resource categories are:
land, labor, capital & entrepreneurial ability
land, water, capital & entrepreneurial ability
land, labor, capital & economic ability
land, labor, capital & endurance ability
41
Unemployment is classified by all of the following except
frictional unemployment
impartial unemployment
structural unemployment
cyclical unemployment
42
An example of a final good is
wheat flour
water used to make bread
a seed to plant a stalk of wheat
bread
43
GDP measures the total dollar value of all goods/services produced in a country's border
false
true
44
Regarding the annual rate of economic growth, the Rule of 70 calculates
the GDP per capita
the number of years for real GDP to double
the real GDP
the rate of inflation
45
Supply side market failures occur when supply curves show the cost of producing a good/service
false
true
46
What system measures the overall well being of the economy
Nominal GDP
National Income Accounting
Fiscal Policy
Monetary Policy
47
Demand side market failures happen when demand curves reflect the consumers' willingness to pay
false
true
48
Substitute goods are
restaurants and barber shops
bread and butter
CDs and airplane tickets
coke and pepsi
49
What diagram illustrates the flow of good&services, resources&money thru households&businesses
the fully leaded diagram
the square box diagram
the circular flow diagram
the unleaded diagram
50
Firms seeking to further self interest and operating a competitive market system are lead by
laws and virtues
an invisible hand
a dough hook
envy and jealousy
51
Positive economics focuses on ____ and normative economics focuses on _____
supply side; demand side
demand side; supply side
facts and cause-effect relationships; value judgments
unusual relationships; value judgments
52
A budget line is a schedule/curve that shows various combinations of
2 products a person can purchase with a unlimited income
unlimited products a person can purchase with an income
unlimited products a person can purchase w/ unlimited income
2 products a person can purchase with a specific income
53
A negative externality occurs when
the total cost of producing a good isn't what a producer pays
the total cost of producing a good is equal to what a producer pays
the total cost of producing a good is less than a producer pays
the total cost of producing a good is more than a producer pays
54
Net exports =
export - imports
exports + imports
imports + exports
imports - exports
55
Final goods and services
are offered as exports
are offered for resale
are offered as imports
are purchased by end users
56
Utility is the
surprise from obtaining a good or service
pleasure or satisfaction from obtaining a good or service
dissatisfaction from obtaining a good or service
anxiety from obtaining a good or service
57
Macroeconomics focuses on
individual behavoirs
the economy as a whole
unemployment
individual consumption
58
A mixed economy is a
market system
command system
open system
closed system
59
What type of economic system has the least amount of government intervention?
fiscal policy
command
socialism
laissez-faire
60
Pigovian taxes are government taxes levied on
specific goods and services
all goods and services
anything but a good or service
neither a good or a service
