Question 1

An example of a capital good is

Accepted Answer

A)  food produced by U.S.farmers in 2008 
B)  the car that your friend drives to school 
C)  a house owned and occupied by a family 
D)  the rent your friend paid last year for a college apartment 
E)  a share of General Electric Company stock 
A)  food produced by U.S.farmers in 2008 
B)  the car that your friend drives to school 
C)  a house owned and occupied by a family 
D)  the rent your friend paid last year for a college apartment 
E)  a share of General Electric Company stock

Question 2

Providing training to unemployed individuals will help to alleviate

Accepted Answer

A)  frictional unemployment 
B)  seasonal unemployment 
C)  structural unemployment 
D)  cyclical unemployment 
E)  short-term unemployment 
A)  frictional unemployment 
B)  seasonal unemployment 
C)  structural unemployment 
D)  cyclical unemployment 
E)  short-term unemployment

Question 3

The difference in unemployment rates between Europe and the U.S.has been narrowing partly because

Accepted Answer

A)  tax rates in European countries are generally lower. 
B)  economic conditions in Europe and the U.S have been converging. 
C)  European and American labor unions have been coordinating their activities. 
D)  of a change in labor market policies. 
E)  Europe has been making it easier for workers to gain unemployment benefits 
A)  tax rates in European countries are generally lower. 
B)  economic conditions in Europe and the U.S have been converging. 
C)  European and American labor unions have been coordinating their activities. 
D)  of a change in labor market policies. 
E)  Europe has been making it easier for workers to gain unemployment benefits

Question 4

Which of the following describes the relationship between GDP and government spending?

Accepted Answer

A)  Government spending = GDP + consumption + private investment - exports - imports 
B)  Government spending = GDP - consumption - private investment - exports - imports 
C)  Government spending = GDP - consumption - private investment + exports + imports 
D)  Government spending = GDP - consumption - private investment - exports + imports 
E)  Government spending = GDP + consumption - private investment + exports - imports 
A)  Government spending = GDP + consumption + private investment - exports - imports 
B)  Government spending = GDP - consumption - private investment - exports - imports 
C)  Government spending = GDP - consumption - private investment + exports + imports 
D)  Government spending = GDP - consumption - private investment - exports + imports 
E)  Government spending = GDP + consumption - private investment + exports - imports

Question 5

Cyclical unemployment is a problem because

Accepted Answer

A)  it reflects lost output 
B)  workers are not compensated have no income support at all while they are unemployed 
C)  it will never reach zero 
D)  cyclically-unemployed individuals do not have the skills needed for available jobs 
E)  we do not know how to reduce it 
A)  it reflects lost output 
B)  workers are not compensated have no income support at all while they are unemployed 
C)  it will never reach zero 
D)  cyclically-unemployed individuals do not have the skills needed for available jobs 
E)  we do not know how to reduce it

Question 6

The factor payments measure of GDP

Accepted Answer

A)  can be expressed as GDP = C + I + G + NX 
B)  is found by summing all expenditures on intermediate and final goods and services during the year 
C)  calculates how much value was added at each stage of production 
D)  is found by summing all interest,rent,profit,and wages and salaries generated during the year 
E)  calculates how much workers paid for goods and services during the year 
A)  can be expressed as GDP = C + I + G + NX 
B)  is found by summing all expenditures on intermediate and final goods and services during the year 
C)  calculates how much value was added at each stage of production 
D)  is found by summing all interest,rent,profit,and wages and salaries generated during the year 
E)  calculates how much workers paid for goods and services during the year

Question 7

If consumption expenditures increased by $150 million,while GDP remained the same,which of the following could have occurred,all else equal?

Accepted Answer

A)  Exports increased by $150 million 
B)  Imports decreased by $150 million 
C)  Net exports increased by $150 million 
D)  Net exports decreased by $150 million 
E)  Private investment increased by $150 million 
A)  Exports increased by $150 million 
B)  Imports decreased by $150 million 
C)  Net exports increased by $150 million 
D)  Net exports decreased by $150 million 
E)  Private investment increased by $150 million

Question 8

The chief economic cost associated with unemployment is

Accepted Answer

A)  the benefits paid to the unemployed by the government 
B)  the foregone output that would have been produced if those individuals were employed 
C)  the taxes that are passed along to individuals to pay for unemployment insurance 
D)  higher crime rates 
E)  the psychological costs associated with unemployment 
A)  the benefits paid to the unemployed by the government 
B)  the foregone output that would have been produced if those individuals were employed 
C)  the taxes that are passed along to individuals to pay for unemployment insurance 
D)  higher crime rates 
E)  the psychological costs associated with unemployment

Question 9

When the economy is operating at an unemployment rate below the full employment rate,

Accepted Answer

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 
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

Question 10

Unemployment benefits tend to be higher in Europe and are offered for longer periods than in the United States.

Accepted Answer

A) True 
 B)False

Question 11

According to economists,changes in the quality of goods

Accepted Answer

A)  leads to overestimates of the measured value of GDP because these goods last for shorter amounts of time 
B)  leads to underestimates of the measured value of GDP because these goods last for shorter amounts of time 
C)  leads to overestimates of the measured value of GDP because these goods last for longer amounts of time 
D)  have no effect on the measured value of GDP 
E)  leads to underestimates of the measured value of GDP because these goods last for longer amounts of time 
A)  leads to overestimates of the measured value of GDP because these goods last for shorter amounts of time 
B)  leads to underestimates of the measured value of GDP because these goods last for shorter amounts of time 
C)  leads to overestimates of the measured value of GDP because these goods last for longer amounts of time 
D)  have no effect on the measured value of GDP 
E)  leads to underestimates of the measured value of GDP because these goods last for longer amounts of time

Question 12

Which of the following describes the relationship between net investment and total investment?

Accepted Answer

A)  Net investment = total investment - depreciation 
B)  Total investment = net investment + private investment - depreciation 
C)  Net investment = government investment - private investment - depreciation 
D)  Total investment = net investment - depreciation 
E)  Net investment = government investment - depreciation 
A)  Net investment = total investment - depreciation 
B)  Total investment = net investment + private investment - depreciation 
C)  Net investment = government investment - private investment - depreciation 
D)  Total investment = net investment - depreciation 
E)  Net investment = government investment - depreciation

Question 13

The events of September 11,2001 had a major direct impact on the economy's GDP.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is the most volatile component of private investment?

Accepted Answer

A)  Plant and equipment purchases 
B)  New home construction 
C)  Purchases of services 
D)  Changes in business inventories 
E)  Consumption of nondurables 
A)  Plant and equipment purchases 
B)  New home construction 
C)  Purchases of services 
D)  Changes in business inventories 
E)  Consumption of nondurables

Question 15

Although economists use different methods to calculate GDP,each method should lead to the same number for GDP.

Accepted Answer

A) True 
 B)False

Question 16

When we add the up value of all capital goods,we determine

Accepted Answer

A)  private investment 
B)  the capital stock 
C)  a flow phenomenon 
D)  GDP 
E)  inventory 
A)  private investment 
B)  the capital stock 
C)  a flow phenomenon 
D)  GDP 
E)  inventory

Question 17

The September 11 attacks no doubt worsened the slowdown that had already begun earlier in mid-2000..

Accepted Answer

A) True 
 B)False

Question 18

If some of unemployed individuals became discouraged workers,which of the following would result?

Accepted Answer

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. 
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.

Question 19

Suppose that the current overall unemployment rate is 7.5%.If structural unemployment is 1.5%,frictional unemployment is 3%,and cyclical unemployment is 2%,what is the unemployment rate that is due to seasonal factors?

Accepted Answer

A)  14.0% 
B)  5.5% 
C)  4.5% 
D)  6.0% 
E)  1.0% 
A)  14.0% 
B)  5.5% 
C)  4.5% 
D)  6.0% 
E)  1.0%

Question 20

The United States will always have unemployment.

Accepted Answer

A) True 
 B)False

An example of a capital good is

Providing training to unemployed individuals will help to alleviate

The difference in unemployment rates between Europe and the U.S.has been narrowing partly because

Which of the following describes the relationship between GDP and government spending?

Cyclical unemployment is a problem because

The factor payments measure of GDP

If consumption expenditures increased by $150 million,while GDP remained the same,which of the following could have occurred,all else equal?

The chief economic cost associated with unemployment is

When the economy is operating at an unemployment rate below the full employment rate,

Unemployment benefits tend to be higher in Europe and are offered for longer periods than in the United States.

According to economists,changes in the quality of goods

Which of the following describes the relationship between net investment and total investment?

The events of September 11,2001 had a major direct impact on the economy's GDP.

Which of the following is the most volatile component of private investment?

Although economists use different methods to calculate GDP,each method should lead to the same number for GDP.

When we add the up value of all capital goods,we determine

The September 11 attacks no doubt worsened the slowdown that had already begun earlier in mid-2000..

If some of unemployed individuals became discouraged workers,which of the following would result?

Suppose that the current overall unemployment rate is 7.5%.If structural unemployment is 1.5%,frictional unemployment is 3%,and cyclical unemployment is 2%,what is the unemployment rate that is due to seasonal factors?

The United States will always have unemployment.

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 6: Production, Income, and Employment

An example of a capital good is

Providing training to unemployed individuals will help to alleviate

The difference in unemployment rates between Europe and the U.S.has been narrowing partly because

Which of the following describes the relationship between GDP and government spending?

Cyclical unemployment is a problem because

The factor payments measure of GDP

If consumption expenditures increased by $150 million,while GDP remained the same,which of the following could have occurred,all else equal?

The chief economic cost associated with unemployment is

When the economy is operating at an unemployment rate below the full employment rate,

Unemployment benefits tend to be higher in Europe and are offered for longer periods than in the United States.

According to economists,changes in the quality of goods

Which of the following describes the relationship between net investment and total investment?

The events of September 11,2001 had a major direct impact on the economy's GDP.

Which of the following is the most volatile component of private investment?

Although economists use different methods to calculate GDP,each method should lead to the same number for GDP.

When we add the up value of all capital goods,we determine

The September 11 attacks no doubt worsened the slowdown that had already begun earlier in mid-2000..

If some of unemployed individuals became discouraged workers,which of the following would result?

Suppose that the current overall unemployment rate is 7.5%.If structural unemployment is 1.5%,frictional unemployment is 3%,and cyclical unemployment is 2%,what is the unemployment rate that is due to seasonal factors?

The United States will always have unemployment.

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters