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Unit 4: Macroeconomics Flashcards | StudBud
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Unit 4: Macroeconomics
Unit 4: Macroeconomics
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1
Which policy could the government try if America was trying to get the economy to
expand
?
cut prices of consumer goods
cut production of consumer goods
cut taxes
cut government spending
2
Retail profits fell leading to the termination of a cashier. Cashier is _ unemployed.
Frictionally (frictional)
Cyclically (cyclical)
Structurally (structural)
Not Counted as Unemployed
3
Which situation exists when tax revenues exceed government expenditures?
The government sells Treasury Bills
A budget deficit
The Treasury prints more money
A budget surplus
4
You graduated from college and are currently looking for your 1st job. You are ___ unemployed.
Not Counted as Unemployed
Structurally (structural)
Frictionally (frictional)
Cyclically (cyclical)
5
Economists like to convert statistical series to real terms (i.e. real GDP) b/c the adjustment
makes the statistical series seem to grow faster.
removes the problem of unemployment.
removes the distortions caused by inflation.
is easy to do.
6
A nation’s imports for one year are worth $8.2 billion and its exports equal $8.3 billion:
A trade surplus, or a positive trade balance
A trade deficit, or negative tradebalance
A negative balance of payments
A decrease in GDP
7
A business fires 50% of their employees in '08 b/c of recession. Employees are ___ unemployed.
Not Counted as Unemployed
Frictionally (frictional)
Cyclically (cyclical)
Structurally (structural)
8
Choose the correct letter on the graph that represents a recession.
Z
Y
W
X
9
To be counted in the civilian labor force, a person must be
female and a member of the military
already employed and between the ages of 16 and 65.
male and more than 18 years old.
employed or looking for work, and age 16 and over.
10
On the graph below, what variable is represented by the gray line?
An upward trend in prosperity over time.
Government control and price stability.
Wealth accumulation by the top 20%
The role of the Fed.
11
Which of the following is most likely to be affected by
high inflation
?
A doctor with a suburban practice
A retired grandmother on a fixed income
A shopkeeper
A factory worker
12
Identify the curve below
Phillips Curve
Supply and Demand
Lorenz Curve
Laffer Curve
13
If intermediate goods and services were included in GDP:
GDP would be understated.
GDP would have to be deflated for changes in price level.
nominal GDP would exceed real GDP.
GDP would be overstated.
14
If the Federal Reserve wanted to increase the money supply, it could
Increase the discount rate
Increase the reserve requirement
Buy government securities and bonds
Sell government securities and bonds
15
Read the following news clipping and select the resulting economic effect:
No change in aggregate demand and aggregate supply
Both aggregate demand and aggregate supply will decrease
Aggregate demand will increase, lowering both real GDP + CPI
Aggregate demand will decrease, + lower GDP
16
According to Keynesian (demand side) economics, during a recession
Taxes on investments should be reduced
Government should increase taxes on producers
Government should reduce regulations
Governments should deficit spend
17
The price of a market basket is $50 in year 1. In year 10, the cost is $75. CPI is:
150
100
50
75
18
GDP expressed in constant—or unadjusted for inflation—prices could also be referred to as
Real GDP
Nominal GDP
Aggregate Supply
Aggregate Demand
19
In Macroeconomics, what do we call the
lowest point
of the Business Cycle?
an inflation
a trough
a depression
the peak
20
Which of the following would be supported by both supply side and demand side economists to expand the economy?
Reduce the corporate tax rate
Reduce the income tax rate
Government increase infrastructure projects
Increase imports
21
In this formula, what does "
C
" represent?
Credit
Consumer Wages
Customs Duties
Consumer Purchases
22
Which of the following might cause the
inflation rate
rise?
War in Middle East.
Moderate temperatures result in good harvests of soybeans.
Unemployment rises
Consumer purchasing power decreases due to sluggisheconomy.
23
Which phase of the business cycle would the economy experience its lowest rate of unemployment?
recession
depression
peak
trough
24
In this formula, what does "
I
" represent?
Interest income
Government investments in society
Consumer investments in banks
Aggregate investments made within a society
25
Identify the curve expressed by the image below
Lorenz Curve
Laffer Curve
Kuznets Curve
Phillips Curve
26
What is the primary difference between
seasonal unemployment
and
structural unemployment
?
Structural unemployment is more temporary
Seasonal unemployment occurs because of temporary demand
Seasonal unemployment is generally among low-paid workers
Seasonal unemployment is rare in a modern society
27
Compute the following
per capita
equation:
$4
$40
$10,000
$4,000
28
A person who cleans their own house takes part in
stimulating GDP
reducing GDP
the underground economy
nonmarket transaction
29
Which scenario best illustrates the problem of cyclical unemployment?
A factory worker whose skills are no longer marketable
A sales rep who was laid off during an economic downturn
A college graduate who turns down one job and takes another
A landscaper who can’t find a job in the winter
30
Toll-booth cashier becomes unemployed when a machine does his job better. He is ___ unemployed.
Not Counted as Unemployed
Frictionally (frictional)
Structurally (structural)
Cyclically (cyclical)
31
What is the relationship between personal level of education and future earnings potential?
High levels of Education = high earnings potential
The majority of the “working poor” are highly-educated
Education has only a small influence
Education is totally unimportant
32
C + I + G + (X-M) - which letter represents the largest sector of the macroeconomy
C
I
X
G
33
When calculating GDP, the purchase of a new business office is counted as
consumption
goverment
investment
net export
34
Which component of GDP can be a negative number?
net exports
consumer spending
investment spending
net migration
35
When Coca-Cola buys a shipment of their secret ingredient it is considered to be
a secondhand item.
an intermediate product.
a final sale.
a nonmarket transaction.
36
The market value of all final goods & services produced in a country in a given period of time.
Gross Production Ratio
Gross National Product
Gross Dollar Prices
Gross Domestic Product
37
Which of the following would be counted in this year's GDP?
buying stocks
fixing my own car
the sale of a new house
the purchase of a used car
38
Index of avg level of prices for approx. 90,000 goods and services in the economy is the ___
consumer price index.
current GDP.
implicit GDP price deflator.
producer price index.
