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Final Exam Economics pt. 3 -- Unit 3 Flashcards | StudBud
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Final Exam Economics pt. 3 -- Unit 3
Final Exam Economics pt. 3 -- Unit 3
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Quiz for Unit 3 Test -- Econ
Flashcards
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Questions
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Answers
1
What does it mean when a person in underemployed?
the person has been working but now is laid off
the person has a job but they are overqualified for it
the person is not makin gas much money as they need
the person is looking for work in a special field
2
How is nominal GDP converted into real GDP?
by adding the contributions of U.S. factories elsewhere
by adding up all of the real purchases made in the economy
through eliminating the effects of price increases
by adding all the incomes earned in an economy
3
Which of the following might cause the inflation rate to spike up sharply?
plentiful rainful results in good harvests
the items in the market basket change slightly
prices on world oil markets rise steeply due to war
the purchasing power of the average consumer decreases
4
High saving leads to higher GDP in the future because
more capital is available for investment, increasing output
increased savings will divert money spent on imported goods
a higher national savings rate expands the labor force
the gov't taxes savings accounts to pay for schools
5
Which of the following is a result of unemployment that is very low?
companies stop looking for people to fill unfilled jobs
the few people who are unemployed stop looking for jobs
companies have difficulty recruiting workers
wages drop below the level of minimum wage
6
In an economy, when the price level falls, consumers buy more goods/services. This is shown by
business cycle
aggregate supply curve
aggregate demand curve
equilibrium GDP
7
What is workfare?
welfare that is limited to preschool age children
a program that requires work in exchange for assistance
an early poverty program from the 1950s
a state by state grant program of aid to the elderly
8
Which of these is an example of depreciation?
a construction worker's truck breaks down as it gets older
a clothing store owner reduces the price of a belt by $10
an employer fires a worker for arriving late
a share of stock declines in value
9
If Bob loses his job at the GM plant because car manufacturing is slow due to a downturn, he is
cyclically unemployed
frictionally unemployed
structurally unemployed
seasonally unemployed
10
What is an example of a positive external shock to aggregate supply?
good weather leads to an usually productive harvest
demand for new suburban houses increases the value of land
China announces that it will import 50% more U.S. products
a popular new diet encourages consumers to buy more cereal
11
An accurate statement about the Great Depression would be that
it was caused mostly by overspending on government programs
it had little impact on the wealthy
it ended largely because of an increase in defense spending
it was a normal part of the business cycle
12
An economy that experiences decreasing real GDP and increasing prices is said to suffer from
a depression
a recession
a business cycle
stagflation
13
GDP expressed in constant, or unchanging, prices is called
real GDP
price level
net national product
nominal GDP
14
What is the difference between a recession and a depression?
a depression is a particularly deep recession
unlike a recession, a depression has high inflation
a recession is a period of growth where a depression is not
a recession is more severe
15
How do fears of future economic problems affect GDP?
consumers will spend less and save more
consumers will spend more money in short term to hedge
government will spend less money
businesses will invest more money in short term profits
16
An accurate statement about the Great Depression would be that
it was a recession that became a depression b/c of WWII
its effects/duration would have been worse if not for Japan
it was set off because of a unexpected rise in int. rates
it was the most severe downturn in industrial capitalism
17
The "market basket" that is used by the BLS to calculate prices is made up of
nonfood items only
food and necessary services for any family
food items only
typical goods/services for an urban household
18
Economists look to which of the following explanations for inflation?
producers raise prices in order to meet increased costs
demand for goods exceeds supply, as in wartime
too much money in the economy
all of the above
19
The calculation of GDP would include
the income of a person who babysits under the table
the price of the steel used to build a new hotel
the sale of a 25 year old house
the income of a high school English teacher
20
Which of the following families is statistically the most likely to live in poverty?
black family headed by a single mother living in suburbs
two parent white family living in rural area
two parent family of Hispanic origin in inner city
black family headed by a single mother in inner city
21
Which of the following is most likely to be worried about high inflation?
doctor with a suburban practice
retired couple on fixed income
shopkeeper
factory worker
22
According to the cost-push theory, what is responsible for inflation?
too much money is in circulation
producers raise prices to meet increase costs
the economy is operating as though there was a war
demand for goods and services exceed existing supply
23
According to the demand-pull theory, what is responsible for inflation?
too much money is in circulation
producers raise prices to meet existing demand
demand for goods and services exceeds exisiting supply
the economy is in a wage-price spiral
24
An example of capital deepening would be
laying off employees when a factory is modernized
moving a manufacturing plant overseas
permitting two workers to share one job
paying for an employee to take college courses
25
Which of the following is an example of a final good or service?
lumber purchased by a construction company to build homes
a cake purchased from a bakery for a wedding
wheat a bakery purchases to make bread
coffee beans a coffee shop purchases to make coffee
26
The amount of money a person has left of his or her income after taxes is called
personal income
disposable personal income
aggregate income
national income
27
As you move from left to right, the aggregate demand curve
is horizontal
may slope upward or downward
slopes downward
slopes upward
