Term
| an improvement in the quality of resources available |
|
Definition
| Long-term growth in production can be explained by |
|
|
Term
|
Definition
| Which of the following is not be considered a developed country? |
|
|
Term
|
Definition
| One impediment to the convergence of world economies is the vast differences in human capital. |
|
|
Term
| It decreases to $20 per capita |
|
Definition
| The country of MiddleTerra has 200 people, 100 of them are working, and the real GDP is $5,000. If 50 refugees from LowTerra are arriving and they are not allowed to work, what happens with the standard of living in MiddleTerra? |
|
|
Term
| employment must be growing faster than the population |
|
Definition
| If per capita GDP growth exceeds labor productivity growth, |
|
|
Term
| GDP must increase if the same standard of living is to be maintained. |
|
Definition
| If population increases, which of the following must be true? |
|
|
Term
|
Definition
| The price index in the base year always equals |
|
|
Term
| It excludes intermediate goods as a separate entry. |
|
Definition
| Which of the following is not a problem associated with GDP as a measure of social welfare? |
|
|
Term
| Sandy, who is on welfare, receives $100 in food stamps. |
|
Definition
| Which of the following would not be included in the calculation of GDP? |
|
|
Term
|
Definition
| The CPI __________ inflation because it includes an item in the market basket only after the product becomes __________. |
|
|
Term
| It helps produce another good. |
|
Definition
| Which of the following best describes an intermediate good? |
|
|
Term
| the total cost of a specific market basket of consumer goods and services |
|
Definition
| The consumer price index measures changes in |
|
|
Term
| reduce a person's incentive to look for work |
|
Definition
| An increase in unemployment benefits is likely to do which of the following? |
|
|
Term
| a fixed market basket of consumer goods and services produced in the U.S. economy |
|
Definition
| The Consumer Price Index measures the cost of |
|
|
Term
| are actively seeking employment |
|
Definition
| People who are not currently employed, but say they want a job, are counted as unemployed only if they |
|
|
Term
|
Definition
| Sharon was being treated unfairly by her boss, so she stormed off the job and two weeks later found another position. For two weeks Sharon experienced |
|
|
Term
| one of every ten people in the labor force is currently unemployed |
|
Definition
| Suppose the official unemployment rate is 10 percent. We can conclude without question that |
|
|
Term
| demand-pull inflation is caused by movements of the aggregate demand curve; cost-push inflation is caused by movements of the aggregate supply curve |
|
Definition
| The difference between demand-pull inflation and cost-push inflation is that |
|
|
Term
|
Definition
| Suppose that when disposable income rises from $5.2 trillion to $6.0 trillion, consumption rises from $5.0 trillion to $5.6 trillion. What is the marginal propensity to save? |
|
|
Term
|
Definition
| The MPC plus the MPS equals |
|
|
Term
| is positive when a person spends less than her income |
|
Definition
| Saving in our simple model |
|
|
Term
|
Definition
| The relationship between consumption and income is |
|
|
Term
| increase consumption because the value of wealth has increased |
|
Definition
| A decrease in the price level will |
|
|
Term
|
Definition
| The difference between consumption spending and disposable income |
|
|
Term
| the aggregate expenditure line shifts downward by $10 billion |
|
Definition
| On the aggregate expenditure graph, if autonomous investment decreases by $10 billion, |
|
|
Term
|
Definition
| If the marginal propensity to consume is 3/4, the simple multiplier is |
|
|
Term
|
Definition
| A change in consumers' expectations about the future will shift both the aggregate expenditure curve and the aggregate demand curve. |
|
|
Term
| increase the level of aggregate quantity demanded |
|
Definition
| A decrease in the price level will |
|
|
Term
| The equilibrium level of output demanded will rise. |
|
Definition
| A decrease in the price level will have which of the following effects? |
|
|
Term
| planned injections into the circular flow are less than planned leakages out of the flow |
|
Definition
| Which of the following is not true at the equilibrium quantity of GDP demanded? |
|
|
Term
| Silicon Valley software makers |
|
Definition
| An example of industrial clustering is |
|
|
Term
| GDP must increase if the same standard of living is to be maintained. |
|
Definition
| If population increases, which of the following must be true? |
|
|
Term
|
Definition
| The share of research and development funding supported by the federal government has increased over the past three decades. |
|
|
Term
| government policy arrived at enhancing our competitiveness with foreign industry |
|
Definition
| The term industrial policy refers to |
|
|
Term
|
Definition
| If on-the-job experience causes labor productivity to increase, that is the result of an improvement in human capital. |
|
|
Term
|
Definition
| One impediment to the convergence of world economies is the vast differences in human capital. |
|
|
Term
|
Definition
| Which of the following is a leakage from the circular flow? |
|
|
Term
|
Definition
| We can conclude that there has been inflation since the base year if the GDP price index in the current year is |
|
|
Term
| households are on the supply side of the resource market and the demand side of the product market |
|
Definition
| The simple circular flow model shows that |
|
|
Term
|
Definition
| Which of the following is an injection into the circular flow? |
|
|
Term
| market value of all final goods and services produced by resources located in the U.S. |
|
Definition
| Gross Domestic Product equals the |
|
|
Term
| enhances money's importance as a link between the present and the future |
|
Definition
| Uncertainty about inflation |
|
|
Term
| percentage of the labor force that does not have a job |
|
Definition
| The unemployment rate is the |
|
|
Term
| seasonal decreases in demand for labor |
|
Definition
| Seasonal unemployment refers to unemployment that results from |
|
|
Term
| a salesperson who works on commission |
|
Definition
| Which of the following people is least likely to be hurt by inflation? |
|
|
Term
| one of every ten people in the labor force is currently unemployed |
|
Definition
| Suppose the official unemployment rate is 10 percent. We can conclude without question that |
|
|
Term
|
Definition
| The difference between consumption spending and disposable income |
|
|
Term
| shift the consumption function upward |
|
Definition
| A decrease in the price level will |
|
|
Term
| is the change in consumption relative to a change in disposable income |
|
Definition
| The marginal propensity to consume |
|
|
Term
|
Definition
| If the U.S. price level decreases, other things equal, U.S. net exports will |
|
|
Term
|
Definition
| If the marginal propensity to consume is equal to 0.70 and income rises by $20 billion, then consumption spending will rise by |
|
|
Term
|
Definition
| Economists assume that the fundamental motive of investors is |
|
|
Term
| increase the level of aggregate quantity demanded |
|
Definition
| A decrease in the price level will |
|
|
Term
| That level of real GDP is the equilibrium level of real GDP demanded. |
|
Definition
| Suppose that at a particular level of real GDP, the unintended change in inventories is zero. Which of the following is true? |
|
|
Term
| the larger the MPC, the steeper the consumption function |
|
Definition
| Which of the following is true concerning the relationship between the marginal propensity to consume and the consumption function? |
|
|
Term
| The equilibrium level of output demanded will rise. |
|
Definition
| A decrease in the price level will have which of the following effects? |
|
|
Term
| Government purchases = Net taxes |
|
Definition
| For a balanced government budget: |
|
|
Term
| the aggregate expenditure line shifts downward by $15 billion |
|
Definition
| On the aggregate expenditure graph, if autonomous saving increases by $15 billion, |
|
|
Term
| the main force behind economic growth is increases in the quality of inputs |
|
Definition
| According to Simon Kuznets, |
|
|
Term
| All of the answers are correct |
|
Definition
| A possible downside of industrial policy is that |
|
|
Term
|
Definition
| If both total employment and total output always grew by 2 percent each year, what would the annual growth in labor productivity in an economy be over a decade? |
|
|
Term
| an improvement in the quality of resources available |
|
Definition
| Long-term growth in production can be explained by |
|
|
Term
| Firms switch from providing services to producing goods. |
|
Definition
| Which of the following would not slow down productivity growth? |
|
|
Term
|
Definition
| The price index in the base year always equals |
|
|
Term
| the value of leisure time is not counted in GDP |
|
Definition
| GDP is a poor measure of social well-being because |
|
|
Term
| It can be measured either from total spending or total expenditure. |
|
Definition
| Which of the following is true regarding Gross Domestic Product? |
|
|
Term
| Tom gets fired for being late so often after his alarm clock breaks, so he moves off to the wilderness. |
|
Definition
| Which of the following actions would not increase GDP? |
|
|
Term
| It excludes intermediate goods as a separate entry. |
|
Definition
| Which of the following is not a problem associated with GDP as a measure of social welfare? |
|
|
Term
| a firm buying personal computers for its secretarial staff |
|
Definition
| Which of the following is the best example of an investment as defined by economists? |
|
|
Term
|
Definition
| The impact of __________ unemployment is removed from official unemployment figures that are reported monthly. |
|
|
Term
| the noninstitutionalized population over 16 in the economy who hold jobs or are looking for them |
|
Definition
| The labor force consists of all |
|
|
Term
| The opportunity cost of unemployment is a higher inflation rate. |
|
Definition
| Which of the following is not a cost of unemployment? |
|
|
Term
| causes fewer problems than unanticipated inflation |
|
Definition
|
|
Term
| will always include some unemployment |
|
Definition
|
|
Term
| nominal interest rate minus the inflation rate |
|
Definition
| The real interest rate can be expressed as the |
|
|
Term
| investment spending will not change |
|
Definition
| Suppose that autonomous investment level is $100 billion per year. If income in the economy falls, |
|
|
Term
| because the interest rate represents the opportunity cost of investing in capital |
|
Definition
| A firm's level of investment is tied to the interest rate |
|
|
Term
|
Definition
| Which of the following is not a component of aggregate expenditure? |
|
|
Term
| shift the autonomous net export function upward |
|
Definition
| A decrease in the value of the U.S. dollar relative to other currencies will |
|
|
Term
|
Definition
| If consumption spending is $400 and the disposable income is $550, then: |
|
|
Term
| real disposable income in other nations |
|
Definition
| The amount of U.S. exports purchased by the rest of the world is primarily determined by |
|
|
Term
| The equilibrium level of output demanded will fall. |
|
Definition
| What is the effect of an increase in the price level? |
|
|
Term
| decrease by $60 billion/MPS |
|
Definition
| If autonomous investment decreases by $60 billion, equilibrium real GDP demanded will |
|
|
Term
| real GDP on the horizontal axis and aggregate expenditure on the vertical axis |
|
Definition
| The aggregate expenditure line shows |
|
|
Term
|
Definition
| If the marginal propensity to consume is 3/4, the simple multiplier is |
|
|
Term
| the steeper the saving function |
|
Definition
| The larger the marginal propensity to save, other things constant, |
|
|
Term
| Unemployment will decrease |
|
Definition
| For a given price level, when real GDP is $10 million, the planned spending is $9.5 million. Which of the following is incorrect? |
|
|
Term
|
Definition
| Over the last 100 years, U.S. labor productivity grew the fastest |
|
|
Term
| total output divided by the number of units of labor employed |
|
Definition
| Labor productivity is measured as |
|
|
Term
|
Definition
| Over the past century in the United States, the growth of labor productivity was highest in the |
|
|
Term
| any factor that facilitates production and exchange, such as tax laws and property rights |
|
Definition
| The rules of the game refer to |
|
|
Term
|
Definition
| Basic research seeks to answer specific questions or to apply scientific discoveries to the development of specific products. |
|
|
Term
| the ratio of a specific measure of output to a specific measure of input |
|
Definition
| Productivity is defined as |
|
|
Term
|
Definition
| The largest component of aggregate expenditure is |
|
|
Term
|
Definition
| The economy’s production possibilities depend on what happens to |
|
|
Term
| included in U.S. GDP because they are produced domestically |
|
Definition
|
|
Term
|
Definition
| Disposable income equals personal income minus indirect business taxes. |
|
|
Term
| a medical clinic's purchase of flu vaccine |
|
Definition
| Which of the following would not be an expenditure on a final good or service? |
|
|
Term
| It helps produce another good. |
|
Definition
| Which of the following best describes an intermediate good? |
|
|
Term
| demand-pull inflation is caused by movements of the aggregate demand curve; cost-push inflation is caused by movements of the aggregate supply curve |
|
Definition
| The difference between demand-pull inflation and cost-push inflation is that |
|
|
Term
|
Definition
| Demand-pull inflation is a sustained rise in the price level caused by a leftward shift of the aggregate demand curve. |
|
|
Term
| a recession in the economy |
|
Definition
| Cyclical unemployment results from |
|
|
Term
|
Definition
| Which of the following groups tends to have the highest unemployment rate in the United States? |
|
|
Term
| Stephanie, who holds a Ph.D. in history, but can only find part-time employment at a fast-food restaurant |
|
Definition
| Which of the following people would be counted in the labor force? |
|
|
Term
|
Definition
| Which of the following types of unemployment is the hardest to reduce? |
|
|
Term
|
Definition
| The opportunity cost of investing in capital is the interest rate. |
|
|
Term
| marginal propensity to save |
|
Definition
| The fraction of an increase in income that is saved is referred to as the |
|
|
Term
|
Definition
| The relationship between consumption and income is |
|
|
Term
|
Definition
| Imagine a macro investment demand curve that shows that, if the market interest rate is 4 percent, the quantity of investment demanded is $500 billion. Then, if the market rate rises to 5 percent, the most likely result is that the quantity of investment demanded |
|
|
Term
| a downward shift of the autonomous investment function |
|
Definition
|
|
Term
|
Definition
| If the U.S. price level increases, other things equal, U.S. net exports |
|
|
Term
| the marginal propensity to consume |
|
Definition
| That fraction of a change in disposable income that is consumed is called |
|
|
Term
|
Definition
|
|
Term
| shift upward by $40 billion |
|
Definition
| If households save $40 billion less at each level of income and the MPC = 0.8, the aggregate expenditure line will |
|
|
Term
|
Definition
| Which of the following is not included in the aggregate expenditure line? |
|
|
Term
| is defined as 1.0 divided by the marginal propensity to save |
|
Definition
| The larger the marginal propensity to save, other things constant, |
|
|
Term
| higher incomes and more leisure time |
|
Definition
| In the long run, changing technology on average has led to |
|
|
Term
| employment must be growing faster than the population |
|
Definition
| If per capita GDP growth exceeds labor productivity growth, |
|
|
Term
|
Definition
| The country of MiddleTerra has 200 people, 100 of them are working, and the real GDP is $5,000. What is the standard of living in MiddleTerra? |
|
|
Term
| less-developed countries should grow faster than advanced ones because of the ability to copy new technology |
|
Definition
| According to the convergence theory, |
|
|
Term
|
Definition
| The resource whose productivity is most commonly measured is |
|
|
Term
|
Definition
| Education makes workers aware of the latest production techniques and more receptive to new approaches and methods. |
|
|
Term
| that bucket of Kentucky Fried Chicken you bought this July |
|
Definition
| Which of the following would be included in this year's GDP? |
|
|
Term
| product and resource market |
|
Definition
| The two basic markets in the simple circular flow model are the |
|
|
Term
| the value of output produced must equal the value of resource payments generated in producing that output |
|
Definition
| In double-entry GDP accounting, |
|
|
Term
|
Definition
|
|
Term
| ($3.60/$3.00) ´ 100 = 120 |
|
Definition
| Suppose a loaf of bread sold for $3.00 in 2008. The price of bread then increases to $3.60 in 2009. The price index for bread is |
|
|
Term
|
Definition
| Transfer payments are an injection into the circular flow. |
|
|
Term
| the real interest rate is 5 percent |
|
Definition
| If the nominal interest rate is 5 percent and there is no inflation, |
|
|
Term
| It results in a movement along the aggregate demand curve. |
|
Definition
| Which is true of cost-push inflation? |
|
|
Term
| Some unemployment exists even when the economy is healthy and growing. |
|
Definition
| Which of the following statements about unemployment is true? |
|
|
Term
|
Definition
| Suppose you received a 3 percent increase in your nominal wage. Over the year, inflation ran about 6 percent. Which of the following is true? |
|
|
Term
| The economy is experiencing inflation. |
|
Definition
| Suppose the price levels in four successive years are 100, 120, 133, and 140. Which of the following is true? |
|
|
Term
|
Definition
| An increase in a person's real wage necessarily means |
|
|
Term
| an upward shift of the autonomous investment function |
|
Definition
| If the interest rate decreases, then there will be |
|
|
Term
| shift the current consumption function upward |
|
Definition
| Expectations that the price level will increase in the future will |
|
|
Term
|
Definition
| Less of society's resources will be channeled into capital when |
|
|
Term
| investment is independent of the level of income |
|
Definition
| When economists say investment is autonomous, they mean that |
|
|
Term
| shift the current consumption function up |
|
Definition
| Expectations that disposable income will increase in the future will |
|
|
Term
| increase consumption and decrease saving at each level of income |
|
Definition
| An increase in wealth will |
|
|
Term
|
Definition
| If the mps is 0.25, the simple multiplier is |
|
|
Term
| injections exceed leakages |
|
Definition
| The economy will expand if |
|
|
Term
| not useful in situations where changes in aggregate expenditures cause the price level to change |
|
Definition
| The aggregate expenditure model is |
|
|
Term
| shift the aggregate expenditure line downward |
|
Definition
| An increase in the price level will |
|
|
Term
| decreases because the real value of wealth decreases |
|
Definition
| If the price level increases, other things constant, consumption spending |
|
|
Term
| It will shift the aggregate demand curve. |
|
Definition
| Which of the following is not true about a change in the price level? |
|
|
Term
|
Definition
| Which is the resource whose quality is most often enhanced by technological change |
|
|
Term
| lower prices for the necessities of life |
|
Definition
| Which of the following does not contribute to an improved standard of living? |
|
|
Term
|
Definition
| Applied research is the search for knowledge without regard to how that knowledge will be used. |
|
|
Term
|
Definition
| Which of the following is not be considered a developed country? |
|
|
Term
| Silicon Valley software makers |
|
Definition
| An example of industrial clustering is |
|
|
Term
| any factor that facilitates production and exchange, such as tax laws and property rights |
|
Definition
| The rules of the game refer to |
|
|
Term
|
Definition
| If the CPI is 220 one year and 210 the next, the annual rate of inflation as measured by the CPI is approximately |
|
|
Term
|
Definition
| Net exports is the value of |
|
|
Term
| Sandy, who is on welfare, receives $100 in food stamps. |
|
Definition
| Which of the following would not be included in the calculation of GDP? |
|
|
Term
| circular flow of output and income through different sectors of the economy |
|
Definition
| The national income accounting system measures economic activity based on the concept of the |
|
|
Term
| the total cost of a specific market basket of consumer goods and services |
|
Definition
| The consumer price index measures changes in |
|
|
Term
| not added to U.S. GDP because they are produced abroad |
|
Definition
|
|
Term
| The supply of loanable funds increases and the demand for loanable funds decreases. |
|
Definition
| Which of the following events would most likely cause the nominal interest rate to fall? |
|
|
Term
|
Definition
| Unemployment rates __________ during contractions and __________ during expansions. |
|
|
Term
| reduce a person's incentive to look for work |
|
Definition
| An increase in unemployment benefits is likely to do which of the following? |
|
|
Term
|
Definition
| With a total population of 1,000, in the country of Fictivia: 250 people are working, 150 are retired, 45 people are not working but they are actively looking for a job, 101 are children too young to work, 20 people dropped out of the labor force because they won the lottery. How many people are in the labor force? |
|
|
Term
| people overqualified for their current job are not considered unemployed |
|
Definition
| The official unemployment rate disguises the extent of the unemployment problem because |
|
|
Term
| those who borrow at fixed interest rates |
|
Definition
| Unanticipated inflation redistributes income across groups in society. Among the winners are |
|
|
Term
| increase consumption because the value of wealth has increased |
|
Definition
| A decrease in the price level will |
|
|
Term
| remained approximately constant as a percentage of income |
|
Definition
| Historically, consumption spending in the United States has |
|
|
Term
| decrease as real domestic income increases |
|
Definition
|
|
Term
|
Definition
| The most important determinant of a household's consumption spending is |
|
|
Term
| imports to remain unchanged and exports to increase |
|
Definition
| An increase in incomes in other countries, other things equal, would cause U.S. |
|
|
Term
| cause a leftward movement along the autonomous net export function |
|
Definition
| A decrease in real disposable income will |
|
|
Term
| the larger the marginal propensity to consume |
|
Definition
| The smaller the marginal propensity to save, other things constant, |
|
|
Term
| leakages exceed injections |
|
Definition
| The economy will contract (shrink) if |
|
|
Term
| equilibrium real GDP demanded to increase by more than $200 billion |
|
Definition
| If the spending multiplier is greater than 1.0, a $200 billion increase in autonomous investment will cause |
|
|
Term
| The real value of dollar-denominated assets will rise. |
|
Definition
| A decrease in the price level will have which of the following effects? |
|
|
Term
| It shows the magnified change in equilibrium output demanded that arises from a change in planned aggregate spending |
|
Definition
| Which of the following best describes the multiplier? |
|
|
Term
|
Definition
| Movement along the aggregate expenditure curve is caused by a change in the level of income. |
|
|
Term
| government policy arrived at enhancing our competitiveness with foreign industry |
|
Definition
| The term industrial policy refers to |
|
|
Term
|
Definition
| One impediment to the convergence of world economies is the vast differences in human capital. |
|
|
Term
| All of the answers are correct |
|
Definition
| A possible downside of industrial policy is that |
|
|
Term
|
Definition
| Education makes workers aware of the latest production techniques and more receptive to new approaches and methods. |
|
|
Term
| Firms switch from providing services to producing goods. |
|
Definition
| Which of the following would not slow down productivity growth? |
|
|
Term
| It decreases to $20 per capita |
|
Definition
| The country of MiddleTerra has 200 people, 100 of them are working, and the real GDP is $5,000. If 50 refugees from LowTerra are arriving and they are not allowed to work, what happens with the standard of living in MiddleTerra? |
|
|
Term
| GDP statistics understate the true volume of economic activity |
|
Definition
| Because of activity in the underground economy, |
|
|
Term
|
Definition
| If the CPI is 160 one year and 175 the next, the annual rate of inflation as measured by the CPI is approximately |
|
|
Term
| the flow of new goods and services produced in the nation |
|
Definition
| Which of the following is the best indicator of the performance of the national economy? |
|
|
Term
|
Definition
| GDP is not a perfect measure of material well-being because it ignores |
|
|
Term
| value of all transactions in the economy during a given period |
|
Definition
|
|
Term
| ($3.60/$3.00) ´ 100 = 120 |
|
Definition
| Suppose a loaf of bread sold for $3.00 in 2008. The price of bread then increases to $3.60 in 2009. The price index for bread is |
|
|
Term
|
Definition
| In which of the following industries are workers least likely to suffer from cyclical unemployment? |
|
|
Term
| increases in aggregate demand or decreases in aggregate supply |
|
Definition
| Inflation can be caused by |
|
|
Term
|
Definition
| Mr. Bill is a chemistry professor fired from his teaching job, and now works as a sales clerk in the local grocery store. Mr. Bill is: |
|
|
Term
| money loses its use as a store of value |
|
Definition
| In times of rapid inflation, |
|
|
Term
| a downhill ski instructor who looks for work during the summer |
|
Definition
| Which of the following people would be counted as unemployed? |
|
|
Term
| a fixed market basket of consumer goods and services produced in the U.S. economy |
|
Definition
| The Consumer Price Index measures the cost of |
|
|
Term
| Chinese toys to be sold in discount department stores |
|
Definition
| Which of the following is not an example of a government purchase? |
|
|
Term
|
Definition
| The marginal propensity to consume measures the change in consumption divided by the change in income. |
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Term
| shift the consumption function downward |
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Definition
| A decrease in wealth will |
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Term
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Definition
| The MPC plus the MPS equals |
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Definition
| Suppose that when disposable income rises from $5.2 trillion to $6.0 trillion, consumption rises from $5.0 trillion to $5.6 trillion. What is the marginal propensity to save? |
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Term
| US imports are increasing |
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Definition
| As the US disposable income is increasing: |
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Term
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Definition
| Which of the following best describes aggregate expenditure? |
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Term
| When planned aggregate expenditure is greater than output, real GDP demanded will fall. |
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Definition
| Which of the following is not true? |
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Term
| planned injections into the circular flow are less than planned leakages out of the flow |
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Definition
| Which of the following is not true at the equilibrium quantity of GDP demanded? |
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Term
| income level, holding the price level constant |
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Definition
| The aggregate expenditure line shows total planned spending at each |
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Term
| the aggregate expenditure line shifts downward by $10 billion |
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Definition
| On the aggregate expenditure graph, if autonomous investment decreases by $10 billion, |
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Term
| Consumption spending, investment, government purchases, and net exports |
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Definition
| The components of planned aggregate spending are: |
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Term
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Definition
| The share of research and development funding supported by the federal government has increased over the past three decades. |
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Term
| higher incomes and more leisure time |
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Definition
| In the long run, changing technology on average has led to |
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Term
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Definition
| Which is the resource whose quality is most often enhanced by technological change |
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Term
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Definition
| If both total employment and total output always grew by 2 percent each year, what would the annual growth in labor productivity in an economy be over a decade? |
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Term
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Definition
| Over the past century in the United States, the growth of labor productivity was highest in the |
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Term
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Definition
| Which of the following is not be considered a developed country? |
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Term
| the value of leisure time is not counted in GDP |
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Definition
| GDP is a poor measure of social well-being because |
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Term
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Definition
| The economy’s production possibilities depend on what happens to |
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Term
| circular flow of output and income through different sectors of the economy |
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Definition
| The national income accounting system measures economic activity based on the concept of the |
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Term
| value of all transactions in the economy during a given period |
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Definition
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Term
| It helps produce another good. |
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Definition
| Which of the following best describes an intermediate good? |
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Term
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Definition
| An example of structural unemployment caused by a change in tastes and preferences is |
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Term
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Definition
| During which of the following decades was the U.S. inflation rate highest? |
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Term
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Definition
| If the inflation rate is higher than expected, which of the following groups in society would be most likely to gain? |
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Term
| the higher the nominal interest rate you will offer as a borrower and want as a lender |
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Definition
| The higher you think the inflation rate is likely to be, |
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Term
| drops out of the labor force because he cannot find a job |
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Definition
| A discouraged worker is one who |
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Term
| a general and continuing rise in the money prices of goods and services |
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Definition
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Term
| increases by less than the increase in disposable income |
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Definition
| As disposable income increases, consumption spending |
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Term
| is positive when a person spends less than her income |
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Definition
| Saving in our simple model |
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Term
| not influenced by disposable income |
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Definition
| Autonomous consumption expenditures are |
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Term
| the profitability of new investment |
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Definition
| The non-income determinants of consumption include all of the following except one. Which is the exception? |
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Term
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Definition
| The United States, with only one __________ of the world’s population, accounts for about one __________ of the world’s imports and one __________ of the world’s exports. |
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Term
| all its assets minus the value of all its liabilities |
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Definition
| A household's net wealth is the value of |
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Term
| inventories will increase |
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Definition
| In the income-expenditure framework, if planned aggregate expenditures are less than real GDP, |
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Term
| letting changes in autonomous spending shift the aggregate expenditure line |
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Definition
| We can use an aggregate expenditure line to show how an aggregate demand curve shifts by |
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Term
| The lower the MPC, the lower the multiplier. |
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Definition
| Which is true regarding the marginal propensity to consume and the multiplier? |
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Term
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Definition
| If the marginal propensity to save is 1/8, the value of the simple multiplier is |
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Term
| stimulate U.S. exports but discourage imports, causing a rightward movement along a given aggregate demand curve |
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Definition
| A decline in the U.S. price level, other things constant, would |
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Term
| an increase in planned investment |
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Definition
| Which of the following would cause a rightward shift of the aggregate demand curve? |
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Term
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Definition
| Over the last 100 years, U.S. labor productivity grew the fastest |
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Term
| the main force behind economic growth is increases in the quality of inputs |
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Definition
| According to Simon Kuznets, |
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Term
| an improvement in the quality of resources available |
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Definition
| Long-term growth in production can be explained by |
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Term
| less-developed countries should grow faster than advanced ones because of the ability to copy new technology |
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Definition
| According to the convergence theory, |
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Term
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Definition
| Basic research seeks to answer specific questions or to apply scientific discoveries to the development of specific products. |
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Definition
| The country of MiddleTerra has 200 people, 100 of them are working, and the real GDP is $5,000. What is the standard of living in MiddleTerra? |
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Term
| a firm buying personal computers for its secretarial staff |
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Definition
| Which of the following is the best example of an investment as defined by economists? |
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Term
| the total cost of a specific market basket of consumer goods and services |
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Definition
| The consumer price index measures changes in |
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Term
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Definition
| The CPI __________ inflation because it includes an item in the market basket only after the product becomes __________. |
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Term
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Definition
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Term
| exports minus the value of imports |
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Definition
| Net exports is the value of |
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Term
| GDP statistics understate the true volume of economic activity |
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Definition
| Because of activity in the underground economy, |
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Term
| are actively seeking employment |
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Definition
| People who are not currently employed, but say they want a job, are counted as unemployed only if they |
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Term
| redistributes income and wealth |
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Definition
| Unanticipated inflation is usually viewed as undesirable because it |
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Term
| increase the quantity of loanable funds demanded |
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Definition
| A decrease in the interest rate, other things constant, will |
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Term
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Definition
| Which of the following is not consistent with full employment? |
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Term
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Definition
| When workers are over-qualified for their current jobs or can find only part-time work, we say they are |
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Term
| in the labor force divided by the adult population |
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Definition
| The labor force participation rate is the number of people |
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Term
| consumption and saving both increase |
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Definition
| As disposable income increases, |
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Term
| a change in the level of income |
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Definition
| If investment is autonomous, which of the following is least likely to have an effect on the level of investment? |
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Term
| regardless of whether funds must be borrowed or firms have the funds on hand |
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Definition
| The interest rate is important to the investment decision |
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Term
| taxes minus transfer payments |
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Definition
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Term
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Definition
| Net wealth is a __________ variable. Consumption and income are __________ variables. |
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Term
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Definition
| A drop in stock prices will __________ net wealth and __________ consumption. |
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Term
| how much additional income is spent on consumption |
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Definition
| What does the marginal propensity to consume tell us? |
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Term
| The aggregate expenditure line will shift downward. |
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Definition
| What is the effect of an increase in the price level? |
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Term
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Definition
| A change in consumers' expectations about the future will shift both the aggregate expenditure curve and the aggregate demand curve. |
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Term
| aggregate demand curve outward |
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Definition
| An increase in planned investment would shift the |
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Term
| the spreading of ripples from a stone thrown in a pond |
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Definition
| The simple spending multiplier is like |
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Term
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Definition
| If the marginal propensity to consume equals 0.9, the multiplier is |
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Term
| lower prices for the necessities of life |
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Definition
| Which of the following does not contribute to an improved standard of living? |
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Term
| employment must be growing faster than the population |
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Definition
| If per capita GDP growth exceeds labor productivity growth, |
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Term
| GDP must increase if the same standard of living is to be maintained. |
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Definition
| If population increases, which of the following must be true? |
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Term
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Definition
| Applied research is the search for knowledge without regard to how that knowledge will be used. |
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Term
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Definition
| If on-the-job experience causes labor productivity to increase, that is the result of an improvement in human capital. |
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Term
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Definition
| The resource whose productivity is most commonly measured is |
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Term
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Definition
| GDP is not a perfect measure of material well-being because it ignores |
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Term
| Sandy, who is on welfare, receives $100 in food stamps. |
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Definition
| Which of the following would not be included in the calculation of GDP? |
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Term
| It excludes intermediate goods as a separate entry. |
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Definition
| Which of the following is not a problem associated with GDP as a measure of social welfare? |
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Term
| households are on the supply side of the resource market and the demand side of the product market |
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Definition
| The simple circular flow model shows that |
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Term
| Tom gets fired for being late so often after his alarm clock breaks, so he moves off to the wilderness. |
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Definition
| Which of the following actions would not increase GDP? |
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Term
| product and resource market |
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Definition
| The two basic markets in the simple circular flow model are the |
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Term
| a recession in the economy |
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Definition
| Cyclical unemployment results from |
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Term
| The opportunity cost of unemployment is a higher inflation rate. |
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Definition
| Which of the following is not a cost of unemployment? |
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Term
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Definition
| In which of the following industries are workers least likely to suffer from cyclical unemployment? |
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Term
| redistributes income and wealth |
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Definition
| Unanticipated inflation is usually viewed as undesirable because it |
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Term
| a general and continuing rise in the money prices of goods and services |
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Definition
|
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Term
| one of every ten people in the labor force is currently unemployed |
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Definition
| Suppose the official unemployment rate is 10 percent. We can conclude without question that |
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Term
| taxes minus transfer payments |
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Definition
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Term
|
Definition
| Net wealth is a __________ variable. Consumption and income are __________ variables. |
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Term
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Definition
| If the U.S. price level decreases, other things equal, U.S. net exports will |
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Term
| shift the current consumption function up |
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Definition
| Expectations that disposable income will increase in the future will |
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Term
| regardless of whether funds must be borrowed or firms have the funds on hand |
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Definition
| The interest rate is important to the investment decision |
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Term
|
Definition
| Less of society's resources will be channeled into capital when |
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Term
| anything that causes an upward shift in the saving function |
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Definition
| Which of the following would cause a leftward shift of the aggregate demand curve? |
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Term
|
Definition
| If the marginal propensity to consume is 4/5, the value of the simple multiplier is |
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Term
| the flatter the saving function |
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Definition
| The smaller the marginal propensity to save, other things constant, |
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Term
| consumption plus planned investment |
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Definition
| In an economy without a government and without international transactions, aggregate expenditure at each level of income is equal to |
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Term
| the marginal propensity to consume |
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Definition
| That fraction of a change in disposable income that is consumed is called |
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Term
| the aggregate expenditure line shifts downward by $10 billion |
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Definition
| On the aggregate expenditure graph, if autonomous investment decreases by $10 billion, |
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