Question 1

Changes in GDP in the short run are caused primarily by

Accepted Answer

A)  demand factors.
B)  supply factors.
C)  technology.
D)  capital accumulation.
E)   all of the above

Question 2

Explain what factors cause changes in output in: (1)the short run; (2)medium run; and (3)long run.

Accepted Answer

In the short run,demand factors primaril...

Question 3

Use the following information to answer this question.If nominal GDP rises from $100 trillion to $120 trillion,while the GDP deflator rises from 2.0 to 2.2,the percentage change in real GDP is approximately equal to

Accepted Answer

A)  -10%.
B)  10%.
C)  20%.
D)  9.1%.
E)   0%.

Question 4

Which of the following factors is not believed to affect output in the long run?

Accepted Answer

A)  technology
B)  monetary policy
C)  the size of the labor force
D)  the capital stock

Question 5

Explain how the existence of discouraged workers alters the extent to which the official unemployment provides an accurate measure of the use of labor resources.

Accepted Answer

Discouraged workers are those individual...

Question 6

Which of the following about capital income is not correct?

Accepted Answer

A)  It refers to a firm's revenue.
B)  It is also called profit income.
C)  It goes to the firms.
D)  It accounts for less than 35% of income in advanced countries.

Question 7

The labor force in the United States is defined as

Accepted Answer

A)  the total number of individuals who are employed.
B)  the sum of the total number of individuals who are employed and the officially unemployed.
C)  the sum of the total number of individuals who are employed, the officially unemployed, and discouraged workers.
D)  the total number of individuals who are 16 years old and older, but not retired.
E)   none of the above

Question 8

Refer to the information above.The labor force participation rate is

Accepted Answer

A)   .2.
B)   .3.
C)   .4.
D)   .6.
E)   .8.

Question 9

Suppose we switch the base year from 2000 to 2008.This change in the base year will cause

Accepted Answer

A)  nominal GDP in every year to increase.
B)  nominal GDP in every year to decrease.
C)  both nominal and real GDP in every year to decrease.
D)  real GDP in every year to decrease.
E)   none of the above

Question 10

Refer to the information above.The official unemployment rate is

Accepted Answer

A)   .1.
B)   .2.
C)   .33.
D)   .4.
E)   .66.

Question 11

Which of the following calculations will yield the correct measure of real GDP?

Accepted Answer

A)  divide nominal GDP by the consumer price index
B)  divide the GDP deflator by the consumer price index
C)  multiply nominal GDP by the consumer price index
D)  multiply nominal GDP by the GDP deflator
E)   none of the above

Question 12

The Phillips curve describes the relationship between

Accepted Answer

A)  output growth and unemployment.
B)  inflation and output growth.
C)  output growth and money supply.
D)  inflation and unemployment .

Question 13

The GDP deflator provides a measure of which of the following?

Accepted Answer

A)  the ratio of GDP to the size of the population
B)  the ratio of GDP to the number of workers employed
C)  the ratio of nominal GDP to real GDP
D)  the price of a typical consumer's basket of goods
E)   real GDP divided by the aggregate price level

Question 14

Briefly explain why the reported official unemployment rate in Spain in 1994 may have provided an over-estimate of unemployment in Spain.

Accepted Answer

The relatively high unemployment rate in...

Question 15

Prices for which of the following are included in the GDP deflator,but not included in the Consumer Price Index?

Accepted Answer

A)  firms' purchases of new equipment
B)  intermediate goods and services
C)  consumption of goods
D)  consumption of services

Question 16

Changes in GDP in the long run are determined primarily by

Accepted Answer

A)  monetary policy.
B)  fiscal policy.
C)  demand.
D)  all of the above
E)   none of the above

Question 17

Pure inflation occurs when

Accepted Answer

A)  nominal wages rise faster than all prices.
B)  all prices rise faster than nominal wages.
C)  all prices and nominal wages rise by the same percentage.
D)  the GDP deflator and Consumer Price Index rise by the same percentage.
E)   none of the above

Question 18

Explain why economists care about inflation.

Accepted Answer

Inflation will cause relative ...

Question 19

Can an economy maintain high output growth,low unemployment,and low inflation at the the same time? Explain.

Accepted Answer

It would be very hard to achie...

Question 20

Explain why the Phillips curve on average is downward sloping.

Accepted Answer

When unemployment becomes very...

Exam 2: A Tour of the Book

Suppose we switch the base year from 2000 to 2008.This change in the base year will cause

Correct AnswerverifiedShow Answer

Which of the following factors is not believed to affect output in the long run?

Correct AnswerverifiedShow Answer

Changes in GDP in the short run are caused primarily by

Correct AnswerverifiedShow Answer

The Phillips curve describes the relationship between

Correct AnswerverifiedShow Answer

Use the following information to answer this question.If nominal GDP rises from $100 trillion to $120 trillion,while the GDP deflator rises from 2.0 to 2.2,the percentage change in real GDP is approximately equal to

Correct AnswerverifiedShow Answer

Explain why economists care about inflation.

Correct AnswerverifiedInflation will cause relative ...View AnswerShow Answer

The GDP deflator provides a measure of which of the following?

Correct AnswerverifiedShow Answer

Changes in GDP in the long run are determined primarily by

Correct AnswerverifiedShow Answer

Briefly explain why the reported official unemployment rate in Spain in 1994 may have provided an over-estimate of unemployment in Spain.

Correct AnswerverifiedThe relatively high unemployment rate in...View AnswerShow Answer

Explain how the existence of discouraged workers alters the extent to which the official unemployment provides an accurate measure of the use of labor resources.

Correct AnswerverifiedDiscouraged workers are those individual...View AnswerShow Answer

Explain why the Phillips curve on average is downward sloping.

Correct AnswerverifiedWhen unemployment becomes very...View AnswerShow Answer

Pure inflation occurs when

Correct AnswerverifiedShow Answer

Can an economy maintain high output growth,low unemployment,and low inflation at the the same time? Explain.

Correct AnswerverifiedIt would be very hard to achie...View AnswerShow Answer

Explain what factors cause changes in output in: (1)the short run; (2)medium run; and (3)long run.

Correct AnswerverifiedIn the short run,demand factors primaril...View AnswerShow Answer

Refer to the information above.The labor force participation rate is

Correct AnswerverifiedShow Answer

Refer to the information above.The official unemployment rate is

Correct AnswerverifiedShow Answer

Prices for which of the following are included in the GDP deflator,but not included in the Consumer Price Index?

Correct AnswerverifiedShow Answer

Which of the following calculations will yield the correct measure of real GDP?

Correct AnswerverifiedShow Answer

Which of the following about capital income is not correct?

Correct AnswerverifiedShow Answer

The labor force in the United States is defined as

Correct AnswerverifiedShow Answer

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Inflation will cause relative ...
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The relatively high unemployment rate in...
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Discouraged workers are those individual...
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When unemployment becomes very...
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Correct Answer
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Correct Answer
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It would be very hard to achie...
View Answer

Correct Answer
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In the short run,demand factors primaril...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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