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