Liberty University ECON 214 exam 1 complete solutions correct answers A+ work

Liberty University ECON 214 exam 1 complete solutions correct answers A+ work

You can find more than 4 different versions

Question 1

Hollister Co. stocks up on Tshirts for the holiday season. This inventory is included in the _______ category of GDP.

Question 2

When George buys a new computer for his business, it is included in GDP as _______, and when he buys a new computer for use at home, it counts as ________.

Question 3

The government can assist in reducing the level of structural unemployment by:

Question 4

If nominal GDP changed by 6% and the price level changed by 2%, then real GDP changed by:

Question 5

When actual unemployment is less than its natural rate:

Question 6

Nominal GDP increased from $15.62 trillion to $16.09 trillion, and the price level increased from 120.0 to 122.4. The growth rate of real GDP was approximately: (Round to the nearest second decimal.)

Question 7

The concept of a price index is that:

Question 8

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the questions that follow.

The market value of cell phones is:

Question 9

You get a pay raise and feel richer even though your raise did not keep up with inflation; this is best described as:

Question 10

In Nation A, the price index rises from 110 to 120 in a particular year. In the same year, the price level rises from 120 to 130 in Nation B. This means:

Question 11

The big difference between the Great Recession and the recession of 1982 was:

Question 12

Refer to the following figure to answer the questions that follow:

Based on the figure, one could correctly state that:

Question 13

To evaluate the change in average living standards over time, it is best to use

Question 14

Some jobs in the economy are no longer needed after an advancement in technology. A person who loses his job this way would be considered:

Question 15

Real GDP is equal to:

Question 16

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012.

What was the rate of inflation between the two years?

Question 17

Your nominal wage increases by 10%, and the overall price level increases by 12%. Which statement is correct?

Question 18

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012.

What was the nominal GDP in 2013?

Question 19

Macroeconomics is the study of:

Question 20

An accurate measure of GDP is derived by adding:

Question 21

Asking whether people are unemployed for short spells or whether the duration of joblessness is long term is:

Question 22

The shortrun fluctuations in economic activity that can cause output to be above or below the longrun trend are called:

Question 23

JTKB is an accounting firm in South Orange County, Florida. Company policy is that whenever JTKB decides to open up a new accounting position, the hiring manager must conduct at least five interviews over a twoweek span. Because of this process, JTKB is increasing ____________ in South Orange County, Florida.

Question 24

Consider the following figure to answer the questions that follow.

In which year was the economy growing at the longrun average growth rate?

Question 25

Consider the following data to answer the questions that follow

Although countries C and D have the same level of GDP, country C has a level of per capita GDP that is ________ times that of country D.

Question 26

Menu costs of inflation:

Question 27

The recession of 2007–2009 has been dubbed:

Question 28

The housing crisis has some roots in inflation because:

Question 29

Inflation occurs:

Question 30

The chained consumer price index (CPI) is a better measure of prices than the traditional CPI:

Question 31

Government salaries paid to soldiers in the military are included in the ________ category of GDP.

Question 32 Daniel, Steven, and Chris work as engineers in Connecticut. The demand for engineers starts to decline as their company’s profits start to decrease during a recession. As a result, Daniel and Steven are laid off from their jobs. Daniel and Steven would be classified as:

Question 33

You are offered two jobs, one in Chicago paying $67,000 and one in Philadelphia paying $79,000. The price index in Chicago is 110.8, and in Philadelphia it is 126.5. If real wages are the only consideration, then:

Question 34

Assume tuition at Houston Community College cost $588 (per semester) in 2004 and $813 in 2012. If the price index was 184 in 2004 and 226 in 2012, then we could say:

Question 35

Which of the following two types of unemployment occur even when the economy is healthy and growing?

Question 36

Consider the following figure to answer the questions that follow.

During which period was the economy in a contraction?

Question 37

Consider the following data that identifies real GDP in comparison to the longrun trend of real GDP to answer the questions that follow.

How many quarters did this economy spend in a recession?

Question 38

You own a store and have not raised prices recently—and now your store has more customers. Which statement is correct?

Question 39

If cheeseburgers become more expensive and consumers switch their purchases away from cheeseburgers but the consumer price index (CPI) still assumes they buy the same amount, then:

Question 40

Refer to the following figure when answering the questions that follow

According to the figure, deflation was occurring:

Question 1

Let’s say a bottle of Dr. Wells (an actual soft drink still available but hard to obtain) cost $0.15 in 1970. If the consumer price index (CPI) in 1970 was 37.8 and the current CPI is 240, then the Inflationadjusted price of Dr. Wells would be (rounded to the nearest penny):

Question 2

The natural rate of unemployment is:

Question 3

For the the questions that follow, suppose a country has the following quarterly growth data for the last three years: The country’s longrun average growth rate is 3%. In how many of these quarters did GDP contract?

Question 4

If real GDP grew by 2% and the inflation rate was 2%, then nominal GDP grew by:

Question 5

Assuming the price level increased, if real GDP is less than nominal GDP for a given year, then:

Question 6

Nominal GDP is equal to:

Question 7

Medical care typically composes ____ of the typical consumer price index (CPI).

Question 8

Discouraged workers are defined as:

Question 9

Oranges become more expensive in 2008 at Ukrop’s in Charlottesville, Virginia. This means:

Question 10

The value of the consumer price index (CPI) in 2011 was 229 compared to the base period’s, which will always have the value of:

Question 11

The government purchases category of GDP includes spending by:

Question 12

You are offered two jobs, one in Richmond, Virginia, paying $67,000, and one in San Diego, California, paying $79,000. The price index in Richmond is 104.5, and in San Diego it is 132.3. If real wages are the only consideration, then:

Question 13

Consider a nation in which the price index was 150 last year and this year it is 130. Which statement is correct?

Question 14

The phase of the business cycle where the economy is growing faster than usual is called:

Question 15

Nina has a parttime job as she finishes her degree in fashion design. After obtaining her degree she decides to quit her parttime job to search for a job that better fits her nowimproved skill set. Nina has a few interviews, but it is taking time to find the job that suits her best. Nina would be considered:

Question 16

To calculate the labor force participation rate, you only need to know:

Question 17

As a business owner, you find that your resource prices are increasing often. Because these costs are rising, you find it necessary to change your prices frequently. This best describes:

Question 18

Refer to the following table to answer the questions that follow:

As presented in the table, the rate of inflation from 1999–2000 (i.e., during the year 2000) was (rounded to two decimal places):

Question 19

Unemployment caused by delays in matching available jobs and workers is called:

Question 20

The value of the consumer price index (CPI) is best described as:

Question 21

The ratio of Price in an Earlier Time / Price in Today’s Time:

Question 22

Labor force participation rates among teenagers are:

Question 23

Knowing the length of unemployment is important because:

Question 24

Refer to the following figure when answering the questions that follow. Based on the figure, which of the following statements best applies?

Question 25

Refer to the following table to answer the questions that follow: As presented in the table, the rate of inflation (or deflation) from 2002–2003 was (rounded to two decimal places):

Question 26

During normal economic times, unemployment in France and Germany tends to be ____________ than in the United States mainly because of ____________.

Question 27

If the relevant population is 268 million people and the number of people in the labor force is 148 million, the number of people NOT in the labor force is equal to:

Question 28

Holding all else constant, if people who are currently discouraged workers decide to start looking for jobs again, you will see:

Question 29

Real GDP would be a better measure of economic wellbeing if it included the value of:

Question 30

If people bought the same market basket of goods as the average consumer again and again:

Question 31

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the GDP deflator in 2012?

Question 32

Joe has a fulltime construction job and also does odd jobs for people on the weekends. You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence. Does the payment to Joe count toward the value of GDP?

Question 33

Joanna was laid off from her job 11 months ago. After searching for a job for months, Joanna finds a job but is only offered parttime work. Joanna would rather be working fulltime. Economists would classify Joanna as:

Question 34

Arguably, the increases in housing prices in 2005–2006:

Question 35

Michael Chang buys only tennis rackets during a particular year. During the year in question, the price of all goods rises by 10% on average, but the price of tennis rackets remains the same. Which statement is correct?

Question 36

In Felixania, cat food constitutes 45% of the typical basket of goods for a typical consumer, dog food constitutes 3%, and all other goods constitute the remaining 52%. Assume the price of cat food rises by 4%, the price of dog food falls by 10%, and the prices for all other goods remain constant. Based on the information given, we can definitely say:

Question 37

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012.

What was the growth rate of real GDP between the two years?

Question 38

Workers who lose their job because of market innovations are considered:

Question 39

Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment?

Question 40

The concept of a price index is that:

Question 1

Nominal GDP increased from $15.62 trillion to $16.09 trillion, and the price level increased from 120.0 to 122.4. The growth rate of real GDP was approximately: (Round to the nearest second decimal.)

Question 2

Consider the following figure to answer the questions that follow.

During which period was the economy in a contraction?

Question 3

Which of the following is a topic of microeconomics?

Question 4

Consider the following data to answer the questions that follow.

Which country has the highest level of GDP per capita?

Question 5

Macroeconomics is the study of:

Question 6

Savings is:

Question 7

Consider the following figure to answer the questions that follow.

During which period was the economy in an expansion?

Question 8

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012.

What was the GDP deflator in 2012?

Question 9

An accurate measure of GDP is derived by adding:

Question 10

The phase of the business cycle where the economy is growing faster than usual is called:

Question 11

Workers who lose their job because of market innovations are considered:

Question 12

When GDP increases, national income ________ and national output __________.

Question 13

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012.

What was the real GDP in 2013?

Question 14

Consider the following data, where GDP values are measured in millions of dollars, to answer the questions that follow.

What is the value of the GDP deflator in 2011? Round to the nearest decimal.

Question 15

In Las Vegas, the cost of living index is 110, and in San Francisco, it is 170. You work in Las Vegas currently and your salary is $57,000. You are offered a promotion and pay raise of $70,000 to move to San Francisco. If you take the promotion:

Question 16

You deposit $500.00 into an asset that pays 10% annual interest for three years. At the end of the three years, you would have:

Question 17

One argument against unemployment insurance is that:

Question 18

Consider the following data, where GDP values are measured in millions of dollars, to answer the questions that follow.

What is the value of real GDP in 2010? Round to the nearest second decimal.

Question 19

Economists refer to full-employment output as:

Question 20

Use the following table to answer the questions that follow:

According to the table, the employment rate in this economy is equal to:

Question 21

Which of the following equations represents the unemployment rate?

Question 22

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012.

What was the real GDP in 2013?

Question 23

If 51% of all goods in the consumer price index (CPI) became more expensive and 49% became cheaper:

Question 24

If the consumer price index (CPI) was 100 in the period of 1982–1984, then:

Question 25

Structural unemployment is:

Question 26

Farmer Bill grows wheat and sells it to the miller for $50,000. The miller turns it into flour and sells it to the bakery for $75,000. The bakery uses the flour in the bread that it sells to people for $90,000. The total contribution to GDP is:

Question 27

JTKB is an accounting firm in South Orange County, Florida. Company policy is that whenever JTKB decides to open up a new accounting position, the hiring manager must conduct at least five interviews over a two-week span. Because of this process, JTKB is increasing ____________ in South Orange County, Florida.

Question 28

The big difference between the Great Recession and the recession of 1982 was:

Question 29

The date on which the repayment for a loan is due is called:

Question 30

Which of the following lists the three types of unemployment?

Question 31

Which combination of events could have caused the equilibrium interest rate to fall and the equilibrium quantity of loanable funds (both borrowed and lent) to rise?

Question 32

Use the following table to answer the questions that follow:

According to the table, the unemployment rate in this economy is equal to:

Question 33

Some individuals are unemployed because it takes time for them to find a job that fits their skill set. These individuals would be considered to be:

Question 34

Consider the following data to answer the questions that follow.

Which country has the lowest average living standard?

Question 35

Which of the following two types of unemployment occur even when the economy is healthy and growing?

Question 36

Workers who lose their jobs because the skill set they possess is no longer required in the economy are considered to be:

Question 37

Assume the market for loanable funds is in equilibrium at 5% interest. Assuming that firms become more pessimistic about future profits, all else being equal:

Question 38

Borrowers in the loanable funds market consist of:

Question 39

GDP is most often measured by:

Question 40

Consider the following data, where GDP values are measured in millions of dollars, to answer the questions that follow.

What was the inflation rate between 2010 and 2011? Round to the nearest decimal.

Question 41

Smiley Myrus owns a large corporation that is building a new shopping mall in Winston-Salem, North Carolina. In all likelihood:

Question 42

Frictional unemployment is:

Question 43

The natural rate of unemployment is:

Question 44

The supply of loanable funds comes from:

Question 45

The value of the consumer price index (CPI) in 2011 was 229 compared to the base period’s, which will always have the value of:

Question 46

In Felixania, cat food constitutes 45% of the typical basket of goods for a typical consumer, dog food constitutes 3%, and all other goods constitute the remaining 52%. Assume the price of cat food rises by 4%, the price of dog food falls by 10%, and the prices for all other goods remain constant. Based on the information given, we can definitely say:

Question 47

Donna Newton made $0.30 per hour in 1946 at a small restaurant in Clearfield, Pennsylvania. If the consumer price index (CPI) was 18.3 in 1946 and 202.4 in 2011, then Donna’s inflation-adjusted wage would be:

Question 48

The contraction phase of a business cycle is best described as:

Question 49

The demand for loanable funds is:

Question 50

Refer to the following graph to answer the questions that follow:

Assuming the figure represents the market for loanable funds, which of the following would represent a general economic collapse in the United States, causing foreigners to become fearful about the U.S. economy?

Question 1 Wages are often tied to expected rates of inflation; thus one reason why inflation is important is that:

Question 2 You bought a popular video game last year for $75 and sold it to a store this year for $20. The store sells the used game to a consumer for $50. This adds _____ to GDP when the store sells the game to the consumer.

Question 3 The government can assist in reducing the level of structural unemployment by:

Question 4 When John buys new tires for his car it _______, and when Ford buys tires to put on new cars it ____________.

Question 5 An index of the average prices of all goods and services throughout the economy is called:

Question 6 One improvement of the chained consumer price index (CPI) over the traditional CPI is that:

Question 7 Nominal GDP increased from $15.44 trillion to $15.75 trillion, and the price level increased from 116.5 to 122.3. Which of the following is true?

Question 8 If 51% of all goods in the consumer price index (CPI) became more expensive and 49% became cheaper:

Question 9 If cheeseburgers become more expensive and consumers switch their purchases away from cheeseburgers but the consumer price index (CPI) still assumes they buy the same amount, then:

Question 10 Consider the following data, where GDP values are measured in millions of dollars, to answer the questions that follow. What was the inflation rate between 2010 and 2011? Round to the nearest decimal.

Question 11 Use the following table to answer the questions that follow: According to the table, the labor force participation rate is:

Question 12 The unemployment rate is:

Question 13 If a large group of U.S. workers begins to retire, you can expect:

Question 14 Which of the following is an example of structural unemployment?

Question 15 Consider the following data, where GDP values are measured in millions of dollars, to answer the questions that follow. What was the growth rate of nominal GDP from 2010 to 2011? Round to the nearest second decimal.

Question 16 Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the GDP deflator in 2012?

Question 17 Joe Kowalski invents a new product, and this new product becomes cheaper over time. This can be problematic because:

Question 18 If your nominal wage rises but you think that it automatically means your real wage rose, then:

Question 19 A shortcoming of using real GDP as a measure of economic well­being is that it does not measure changes in:

Question 20 Which of the following statements is true about the natural rate of unemployment?

Question 21 Frictional unemployment is:

Question 22 Consider the following data to answer the questions that follow. Which country has the highest level of GDP per capita?

Question 23 When you buy a new car built by Ford, it is included in the ________ category of GDP.

Question 24 Individuals who are working part­time but would prefer to be working full­time are defined as:

Question 25 Consider the following figure to answer the questions that follow. During which period was the economy in a contraction?

Question 26 The contraction phase of a business cycle is best described as:

Question 27 Asking whether people are unemployed for short spells or whether the duration of joblessness is long term is:

Question 28 To avoid double­counting when calculating GDP, it is best to:

Question 29 Refer to the following table to answer the questions that follow: As presented in the table, the rate of inflation (or deflation) from 2002–2003 was (rounded to two decimal places):

Question 30 A doctor receives $50,000 per month from her patients (and their insurance companies) as payment for her services. Each month she buys medical supplies for $10,000 and she pays a lab $15,000 for analyzing slides. The total contribution to GDP this month is:

Question 31 The four major expenditure categories of GDP are:

Question 32 Which of the following is an example of frictional unemployment?

Question 33 Macroeconomics is the study of:

Question 34 The average inflation rate in the United States from 2000–2012 was about:

Question 35 Use the following table to answer the questions that follow: According to the table, the number of people not in the labor force is equal to:

Question 36 In Nation A, the price index rises from 110 to 120 in a particular year. In the same year, the price level rises from 120 to 130 in Nation B. This means:

Question 37 Your firm expands its output in a time when demand appears to be increasing. Demand for all goods is increasing because of inflation, and consumers want to buy all goods faster because their real purchasing power is falling due to inflation. This situation could indicate that:

Question 38 If Robert was earning $10,000 and now earns $11,500, then:

Question 39 In the 1970s, the government attempted to regulate prices to control inflation; this attempt was unsuccessful. The most likely reason was that:

Question 40 Refer to the following figure to answer the questions that follow: Based on the figure, one could correctly state that:

Question 1 Structural unemployment is:

Question 2 Which of the following equations represents the labor force participation rate?

Question 3 The concept of a price index is that:

Question 4 Use the following table to answer the questions that follow: According to the table, the labor force participation rate in this economy is equal to:

Question 5 If the relevant population is 268 million people and the number of people in the labor force is 148 million, the labor force participation rate is:

Question 6 Net exports can be defined as:

Question 7 If the goods producers buy change dramatically between years, then:

Question 8 Consider the following data to answer the questions that follow. Although countries C and D have the same level of GDP, country C has a level of per capita GDP that is ________ times that of country D.

Question 9 A shortcoming of using real GDP as a measure of economic well­being is that it does not measure changes in:

Question 10 A doctor receives $50,000 per month from her patients (and their insurance companies) as payment for her services. Each month she buys medical supplies for $10,000 and she pays a lab $15,000 for analyzing slides. The total contribution to GDP this month is:

Question 11 Labor force participation rates among teenagers are:

Question 12 The chained consumer price index (CPI) is a better measure of prices than the traditional CPI:

Question 13 The percent change in the overall level of prices in the economy is called:

Question 14 Goods that firms repackage with other goods for sale at a later stage are:

Question 15 An example of an intermediate good would be:

Question 16 For the the questions that follow, suppose a country has the following quarterly growth data for the last three years: The country’s long­run average growth rate is 3%. How many quarters were spent in recession?

Question 17 Consider the following data, where GDP values are measured in millions of dollars, to answer the questions that follow. What was the growth rate of real GDP from 2011 to 2012?

Question 18 GDP is not a good measure of:

Question 19 Use the following table to answer the questions that follow: According to the table, the unemployment rate in this economy is equal to:

Question 20 The Bureau of Labor Statistics releases consumer price index (CPI) data:

Question 21 Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the real GDP in 2013?

Question 22 Economic growth is best measured by changes in:

Question 23 According to the price confusion problem, if the price of a product increases, then:

Question 24 If everyone buys the same goods every year and the price of housing rises by 38%:

Question 25 Individuals who are working part­time but would prefer to be working full­time are defined as:

Question 26 When GDP increases, national income ________ and national output __________.

Question 27 Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the GDP deflator in 2013?

Question 28 Which is the largest component of U.S. GDP?

Question 29 Refer to the following table to answer the questions that follow: As presented in the table, the approximate rate of inflation (or deflation) from 2000–2001 was (rounded to the nearest percent):

Question 30 How do you convert a price of a good from an earlier time into today’s price?

Question 31 In Bovania, cattle compose 48% of the consumer price index (CPI), housing composes 32%, and entertainment accounts for the remaining 20%. If, in a certain year, the price of cattle rises by 30% and the price of housing rises by 25%, then:

Question 32 Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment?

Question 33 Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the real GDP in 2013?

Question 34 Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the growth rate of real GDP between the two years?

Question 35 Suppose a basket of goods and services has been selected to calculate the consumer price index (CPI) and 2002 has been chosen as the base year. In 2002, the basket’s cost was $76.00; in 2004, the basket’s cost was $79.50; and in 2006, the basket’s cost was $85.00. The value of the CPI was:

Question 36 When an unemployed worker receives a payment from the government as a result of being unemployed, it is:

Question 37 Which of the following is an example of frictional unemployment?

Question 38 You know that the consumer price index (CPI) at the beginning of this year was 250 and the rate of inflation was 14%; this would mean:

Question 39 Real GDP is GDP adjusted for changes in:

Question 40 Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the rate of inflation between the two years?

Question 1

Other things the same, a decrease in the price level makes the dollars people hold worth

Question 2

During periods of high and variable inflation, which of the following is unlikely to occur?

Question 3

Which of the following groups would most likely benefit from unanticipated inflation?

Question 4

The figures below (in millions) are for the United States during the year 2003.

Population (Age 16 and over) 221.2

Employed 137.7

Unemployed 8.8

The rate of labor force participation of the U.S. in 2003 was

Question 5

In contrast with unanticipated inflation, anticipated inflation implies that

Question 6

The current U.S. unemployment insurance program

Question 7

The population (age 16 and over) of Econoland is 100 million; 5 million are unemployed, and 70 million hold jobs. The labor force participation rate in Econoland is

Question 8

Other things equal, which of the following is true?

Question 9

A business spends $10 million on new capital equipment, and during the same year, $7 million of its existing capital wears out. Which of the following is correct?

Question 10

If the quantity of euro demanded were greater than the quantity supplied, then the price of the

Question 11

If nominal GDP increased 2 percent during a year, while real GDP increased 4 percent, the

Question 12

Suppose you are earning 5 percent nominal interest on your savings account. If the rate of inflation is 3 percent, the real rate of interest you are earning is

Question 13

Babe Ruth's 1931 salary was $80,000. Government statistics show a consumer price index of 15.2 for 1931 and 215 for 2008. Ruth's 1931 salary was equivalent to a 2008 salary of about

Question 14

Within the framework of the AS/AD model, which of the following is a true statement regarding short-run aggregate supply?

Question 15

When an economy operates at its long-run potential output level,

Question 16

If the dollar price of the English pound goes from $1.50 to $2.00, the dollar has

Question 17

Which of the following provides the most accurate description of monetary policy?

Question 18

Which of the following would increase the GDP of the United States?

Question 19

A real estate salesperson sells a house in 2009 that was built in 1990. How does this transaction get counted in the GDP statistics?

Question 20

Suppose the CPI was 95 in 1955, and suppose currently the CPI is 475. According to the CPI, $100 today purchases the same amount of goods and services as

Question 21

Who among the following is most likely to favor an appreciation of the U.S. dollar?

Question 22

Which of the following is true?

Question 23

In a modern dynamic economy such as the United States, full employment generally means

Question 24

Which one of the following events will leave GDP unchanged?

Question 25

Which of the following events will increase GDP?

Question 26

Which of the following will most likely occur during the expansionary phase of a business cycle?

Question 27

If people suddenly anticipate that inflation will rise during the next year, which of the following is most likely?

Question 28

If there is a surplus of loanable funds

Question 29

Which of the following will contribute to GDP?

Question 30

A depreciation in the U.S. dollar on the foreign exchange market will

1. Official unemployment is identified as when:

a. a worker who is not currently employed is searching for a job unsuccessfully.

b. a worker who is not currently employed stops searching for a job.

c. a worker leaves her job to attend school full-time.

d. a worker retires from her job.

e. a worker who is not currently employed stops searching for a job because she feels there is no job available for her.

2. Which of the following lists the three types of unemployment?

a. frictional, structural, and practical

b. practical, structural, and cyclical

c. frictional, unavailable, and structural

d. cyclical, practical, and unavailable

e. frictional, structural, and cyclical

3. One misconception that people often have about unemployment is that:

a. unemployment is a macroeconomic topic.

b. unemployment is important to the economy.

c. as a nation, we should aim for zero unemployment.

d. the unemployment rate does not tell the whole story about the employment situation.

e. discouraged workers are not included in the official unemployment rate.

4. Which of the following people would be officially considered unemployed?

a. Mitchell, who is a full-time student working part-time at the bookstore

b. Janice, who is actively seeking a full-time job while currently working at a part-time job

c. Jade, who has stopped looking for a job because she feels there are no jobs available for

her

d. Jenna, who just graduated college and is searching for a job that fits her graphic-design

skills

e. Ralph, who is a stay-at-home father and is not currently looking for a job

5. Which of the following two types of unemployment occur even when the economy is healthy and growing?

a. frictional and structural

b. cyclical and frictional

c. structural and cyclical

d. frictional and practical

e. structural and practical

6. Between 1960 and 2012, the average unemployment rate in the United States was about:

a. 4%.

b. 6%.

c. 0%.

d. 8%.

e. 9%.

7. Workers who lose their job because of market innovations are considered:

a. discouraged workers.

b. cyclically unemployed.

c. frictionally unemployed.

d. structurally unemployed.

e. employed.

8. Between 1979 and 2012, service industries employment in the United States has:

a. stayed constant.

b. fallen by almost 50%.

c. risen by almost 72%.

d. risen by almost 90%.

e. fallen by only 10%.

9. Unemployment caused by delays in matching available jobs and workers is called:

a. structural unemployment.

b. cyclical unemployment.

c. discouraged unemployment.

d. frictional unemployment.

e. seasonal unemployment.

10. Nina has a part-time job as she finishes her degree in fashion design. After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set. Nina has a few interviews, but it is taking time to find the job that suits her best. Nina would be considered:

a. structurally unemployed.

b. cyclically unemployed.

c. frictionally unemployed.

d. overemployed.

e. a discouraged worker.

11. JTKB is an accounting firm in South Orange County, Florida. Company policy is that whenever JTKB decides to open up a new accounting position, the hiring manager must conduct at least five interviews over a two-week span. Because of this process, JTKB is increasing ____________ in South Orange County, Florida.

a. the number of discouraged workers

b. structural unemployment

c. cyclical unemployment

d. frictional unemployment

e. labor force participation

12. Government policies such as unemployment compensation and government regulations related to hiring and firing employees result in:

a. lower frictional unemployment.

b. lower structural unemployment.

c. higher frictional unemployment.

d. lower cyclical unemployment.

e. higher structural unemployment.

13. An economic downturn can lead to mainly which type of unemployment?

a. cyclical unemployment

b. frictional unemployment

c. seasonal unemployment

d. structural unemployment

e. practical unemployment

14. During healthy economic periods, cyclical unemployment:

a. rises.

b. will equal structural unemployment.

c. falls toward zero.

d. will equal frictional unemployment.

e. will equal the natural rate of unemployment.

15. Economists refer to full-employment output as:

a. gross domestic product (GDP) per capita.

b. natural GDP.

c. real GDP.

d. nominal GDP.

e. potential GDP.

16. The natural rate of unemployment is:

a. the average unemployment rate during a recession.

b. equal to zero percent.

c. constant over time.

d. the typical rate of unemployment when the economy is growing normally.

e. equal to the rate of cyclical unemployment.

17. Which of the following statements is true about the natural rate of unemployment?

a. The actual unemployment rate can never be above the natural rate.

b. The actual unemployment rate can never be at the natural rate.

c. The natural rate of unemployment consists of both cyclical and structural unemployment.

d. Sometimes the actual unemployment rate is below the natural rate.

e. The natural rate of unemployment consists of both cyclical and frictional unemployment.

18. When actual unemployment is less than its natural rate:

a. the economy is producing below its long-run capabilities.

b. the economy is producing within its long-run capabilities.

c. resources are employed at levels that are not sustainable in the long run.

d. resources are employed at levels that are sustainable in the long run.

e. output is less than full-employment output.

19. A member of the labor force is defined as:

a. someone who is employed.

b. someone who is above the age of 16.

c. someone who is employed on a part-time basis.

d. someone already employed or actively seeking work.

e. someone already employed on a full-time basis.

20. Which of the following individuals would NOT be considered part of the labor force?

a. Jim, who is a full-time student working part-time

b. Lisa, who is working part-time but wants to be working full-time

c. Kimberly, who has retired from the military and now works at the post office

d. Charles, who employed by an accounting firm but is currently taking three weeks of unpaid family leave time from his job.

e. Thomas, who is unemployed but has given up searching for a job because he believes there are no jobs available for him

Use the following table to answer the questions that follow:

21. According to the table, the unemployment rate in this economy is equal to:

a. 4.9%.

b. 92.2%.

c. 63.4%.

d. 7.8%.

e. 8.5%.

22. According to the table, the labor force participation rate in this economy is equal to:

a. 4.9%.

b. 92.2%.

c. 63.4%.

d. 7.8%.

e. 8.5%.

23. If the unemployment rate is 5.8% and the number of unemployed persons is 15 million, the labor force is approximately:

a. 258 million.

b. 25.8 million.

c. 87 million.

d. 870 million.

e. 2.6 million.

24. During periods of recession:

a. the unemployment rate declines.

b. the unemployment rate rises.

c. household income rises.

d. output rises.

e. real gross domestic product (GDP) rises.

25. Discouraged workers are defined as:

a. individuals who are not working but are willing to work and who have looked for a job in the past 12 months but have not sought employment in the past 4 weeks.

b. individuals who are not working and have looked for a job in the past 4 weeks.

c. individuals who are working part-time but would rather be working full-time.

d. individuals who are working full-time for wages lower than they want to work for.

e. individuals who are not working because of a disability or childcare issues.

26. Individuals who are working part-time but would prefer to be working full-time are defined as:

a. unemployed.

b. underemployed workers.

c. unhappy workers.

d. discouraged workers.

e. retired.

27. The definition of long-term unemployment is unemployment that lasts:

a. longer than 28 weeks.

b. longer than 4 weeks.

c. longer than 10 weeks.

d. longer than 14 weeks.

e. longer than 8 weeks.

28. Knowing the length of unemployment is important because:

a. if most unemployment is long term, we might not be as concerned with higher unemployment because unemployment will consist mostly of structural unemployment.

b. if most unemployment is short term, we might not be as concerned with a higher unemployment rate, because this indicates that the unemployment is a temporary situation, rather than a long-term problem.

c. if most unemployment is short term, the government can easily reduce the unemployment rate through government programs.

d. the length of unemployment dictates the official unemployment rate.

e. if most unemployment is short term, we might be concerned that businesses are quickly laying off workers.

29. Katherine was laid off from her job 11 months ago. After searching for a job for months, Katherine gives up her job search because she feels there are no jobs available for her. Economists would classify Katherine as:

a. unemployed.

b. in the labor force.

c. underemployed.

d. employed.

e. a discouraged worker.

Use the following table to answer the questions that follow:

30. According to the table, the labor force participation rate is:

a. 64.2%.

b. 68.4%.

c. 35.8%.

d. 31.6%.

e. 6.1%.

31. During the 2007–2009 Great Recession, the United States witnessed:

a. a decrease in the number of discouraged workers.

b. a decrease in the labor force participation rate.

c. a decrease in the unemployment rate.

d. a decrease in the number of underemployed workers.

e. an increase in the labor force participation rate.

32. If the relevant population is 268 million people and the number of people in the labor force is 148 million, the number of people NOT in the labor force is equal to:

a. 268 million.

b. 148 million.

c. 120 million.

d. 316 million.

e. 55.2 million.

33. Holding all else constant, if people who are currently unemployed become discouraged workers, you will see:

a. an increase the unemployment rate.

b. an increase the labor force participation rate.

c. no effect on the unemployment rate.

d. no effect on the labor force participation rate.

e. a decrease the labor force participation rate.

34. Which of the following statements about the composition of the labor force is correct?

a. Since 1948, the labor force participation gap between males and females has decreased.

b. Since 1948, the percentage of women participating in the labor force has decreased.

c. Since 1948, the percentage of men participating in the labor force has increased.

d. Since 1948, the percentage of women participating in the labor force has remained the

same.

e. Since 1948, the labor force participation gap between males and females has risen.

35. Which of the following statements about unemployment is true?

a. Unemployment rates across races are very similar.

b. Unemployment rates across ages are very similar.

c. Unemployment rates vary widely between the sexes.

d. Unemployment rates vary widely across age and race.

e. The official unemployment rate includes discouraged workers.

Identify the choice that best completes the statement or answers the question.

1. Inflation occurs:

a. when all prices in the economy rise.

b. when the prices of some goods rise and prices of some goods fall, but more goods have price increases than decreases.

c. when the prices of some goods rise and prices of some goods fall, but fewer goods have price increases than decreases.

d. when the overall level of prices rises.

e. when all prices in the economy fall.

Refer to the following figure when answering the questions that follow.

2. According to the figure, deflation was occurring:

a. between 2003 and 2004.

b. from 1996 until 1999.

c. from 1996 through 1996 and between 2003 and 2004.

d. in none of the years shown.

e. in all of the years shown.

3. From 1960 until 2012, the long-run average rate of inflation in the United States was:

a. less than 1%.

b. about 4%.

c. about 8%.

d. about 12%.

e. negative.

4. The Bureau of Labor Statistics releases consumer price index (CPI) data:

a. hourly.

b. daily.

c. weekly.

d. monthly.

e. only when the typical basket of goods changes.

5. The value of the consumer price index (CPI) in 2011 was 229 compared to the base period’s, which will always have the value of:

a. 1.

b. 50.

c. 100.

d. 150

e. 229.

6. What is the consumer price index (CPI)?

a. The CPI is the measure of consumer prices in both rural and urban areas. It is calculated by adding up all prices.

b. The CPI is