Term
Using the table below, calculate GDP for a particular year.
Consumption spending $1,000
Wages and salaries $ 800
Rent $ 100
Government purchases $ 200
Profit $ 300
Exports $ 400
Interest $ 250
Private investment spending $ 400
Imports $ 550
Based on the above information, GDP in this year was
a. $1,450
b. $2,000
c. $2,550
d. $2,900
e. $4,000 |
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Definition
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Term
Which of the following properly matches the owner of a resource with the corresponding payment?
a. land owners and rent
b. entrepreneurs and interest payments
c. laborers and profit
d. entrepreneurs and rent
e. capitalists and salaries |
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Definition
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Term
Improvements in the quality of goods and services over time
a. cause GDP statistics to understate true output growth from year to year
b. cause GDP statistics to overstate true output growth from year to year
c. are fully accounted for in the Bureau of Economic Analysis' measurement of GDP
d. are reflected in higher prices and therefore do not affect the measurement of real GDP
e. are offset by declining productivity over time |
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Definition
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Term
During recessions, GDP falls and unemployment increases. Why might the actual output produced not fall as
much as officially measured GDP during recessions?
a. There is an increase in involuntary part-time employment during recessions, the output
from which is not accounted for in GDP.
b. Workers who became unemployed during the recession may produce goods in the
underground economy.
c. Unemployment benefits to laid off workers will allow them to purchase nearly as much
output as before.
d. Laid off workers may start their own businesses, but profit income from self-employment
is not accounted for in GDP.
e. Unemployed workers have more leisure time to enjoy. |
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Definition
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Term
All types of unemployment are harmful to the economy.
a. True
b. False |
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Definition
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Term
Yuan recently completed his college degree and is entering the labor market for the first time. He has been
submitting applications and has been interviewed twice in the last two weeks, but so far has not found a job.
Yuan would be classified as
a. frictionally unemployed
b. seasonally unemployed
c. structurally unemployed
d. cyclically unemployed
e. not yet in the labor force |
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Definition
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Term
Seasonal unemployment
a. is short-term joblessness experienced by those entering the labor market for the first time
b. arises from a mismatch between available jobs and workers' skills or geographic location
c. is joblessness affecting people such as construction workers, farm workers and retail sales
clerks after the Christmas shopping season
d. is joblessness resulting from business cycle movements
e. does not exist when the economy is at full employment |
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Definition
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Term
Dennis is an excellent typist. However, because he has been unable to adapt to his company's new computer
system, he has lost his job. He is currently seeking another secretarial position, but it is likely that he will
have to acquire new skills to become employable as a secretary again. Dennis would best be described as
a. frictionally unemployed
b. seasonally unemployed
c. structurally unemployed
d. cyclically unemployed
e. not in the labor force |
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Definition
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Term
Structural unemployment
a. arises from a mismatch between available jobs and workers' skills or geographic location
b. is short-term joblessness experienced by those re-entering the labor force after a long
absence
c. occurs because of changes in seasons, tourist patterns, and similar factors
d. does not occur when the economy is at full employment
e. is joblessness resulting from business cycle movements |
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Definition
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Term
Which of the following trends would lower the unemployment rate associated with full employment?
a. People become less educated over time.
b. More people are willing to move to find a job.
c. The government spends money to reduce the loss of jobs during a recession.
d. A larger proportion of jobs are seasonal in nature.
e. The federal government increases unemployment benefits. |
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Definition
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Term
Cyclical unemployment
a. is short-term joblessness experienced by those who are between jobs
b. is joblessness created by a mismatch between available jobs and workers' skills
c. is joblessness related to regular seasonal events such as holidays or weather changes
d. is joblessness caused entirely by microeconomic forces
e. does not exist when the economy is at full employment |
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Definition
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Term
Full employment occurs when
a. everyone has a job
b. everyone who wants a job has one
c. there is no frictional unemployment
d. there is no cyclical unemployment
e. there is no structural, frictional, and seasonal unemployment |
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Definition
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Term
When is the U.S. economy at full employment?
a. when there is no cyclical unemployment
b. when there is no structural unemployment
c. when there is no full employment
d. when there is no seasonal unemployment
e. when there is no frictional unemployment |
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Definition
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Term
What fraction of the labor force is cyclically unemployed when structural unemployment is 2 percent,
frictional unemployment is 2.5 percent, seasonal unemployment is 1 percent, and the overall unemployment
rate is 8 percent?
a. 2.5 percent
b. 13.5 percent
c. 4.5 percent
d. 5.5 percent
e. 8 percent |
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Definition
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Term
To be considered unemployed, a person must be jobless, willing and able to work, and have actively searched
for work during the previous
a. two weeks
b. four weeks
c. six weeks
d. eight weeks
e. two months |
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Definition
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Term
To be considered employed, a person must have
a. worked at least 1 hour during the previous week
b. searched at least 1 hour for a job during the previous week
c. worked at least 5 hours during the current week
d. worked at least 15 minutes during the previous month
e. earned at least the minimum wage for five or more hours of work per week |
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Definition
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Term
If 130 million individuals are employed and 6 million are unemployed, what is the unemployment rate?
a. 2.1 percent
b. 3.0 percent
c. 4.4 percent
d. 4.6 percent
e. 8.6 percent |
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Definition
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Term
In an economy with 4,000 unemployed people and 8,000 employed people, the unemployment rate is
a. 50 percent
b. 40 percent
c. 33.3 percent
d. 60 percent
e. 25 percent |
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Definition
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Term
If some of unemployed individuals became discouraged workers, which of the following would result?
a. The labor force would decrease and the unemployment rate would decrease.
b. The labor force would decrease and the unemployment rate would remain the same.
c. The labor force would increase and the unemployment rate would decrease.
d. The labor force would decrease and the unemployment rate would increase.
e. The labor force would increase and the unemployment rate would remain the same |
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Definition
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Term
When the economy is operating at an unemployment rate below the full employment rate,
a. actual output is above potential output
b. actual output equals potential output
c. actual output is below potential output
d. frictional unemployment has been eliminated
e. structural unemployment has been eliminated |
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Definition
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Term
The price of a typical basket of goods and services in one period divided by the price of the same basket in a
different year is a(n)
a. price index
b. TV-violence index
c. employment index
d. output index
e. unemployment index |
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Definition
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Term
The Consumer Price Index (CPI)
a. measures the prices of all goods produced in the economy
b. includes prices of raw materials
c. is found by averaging the prices of all goods consumed in the economy
d. includes only the prices of domestically produced consumer goods
e. includes the prices of some used consumer goods |
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Definition
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Term
If the CPI for 2003 was 112, the typical market basket purchased that year would cost
a. 12 percent more than the same market basket purchased the previous year
b. 112 percent more than the same market basket purchased the previous year
c. 12 percent more than the same market basket purchased in the base year
d. 112 percent more than the same market basket purchased in the base year
e. more than the same market basket purchased during any previous year |
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Definition
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Term
If a newspaper reporter wanted to learn about changes in the U.S. price levels, she would probably get that
information by looking at the
a. real gross domestic product
b. consumer price index
c. latest press release from the Council of Economic Indicators
d. nominal gross domestic product
e. gross national product |
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Definition
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Term
If the price level is falling, the economy is experiencing
a. creeping inflation
b. stagflation
c. disinflation
d. inflation
e. deflation |
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Definition
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Term
Which of the following can happen?
a. Prices are rising and the inflation rate is negative but rising.
b. Prices are falling and the inflation rate is positive and falling.
c. Prices are falling and the inflation rate is positive and rising.
d. Prices are rising and the inflation rate is positive but falling.
e. Prices are rising and the inflation rate is negative and falling. |
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Definition
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