micro economics review

Which is a primary use for national income accounting?
To measure changes in the value of goods and services produced in the economy
An example of a final good in national income accounts would be new:
Flowers purchased by homeowner Lenny Davis
Money spent on the purchase of a new house is included in the GDP as a part of:
Which does not contribute to the production of the domestic output of an economy?
A full-time student
A distinguishing characteristic of public transfer payments is that:
The recipients make no contribution to current production in return for them
Net exports is a negative number when:
A nation’s imports of goods and services are greater than its exports
Which would be considered an investment according to economists?
The construction of a new plant by Ford
The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940); personal consumption expenditures ($4,920); imports ($170); exports ($133); gross private domestic investment ($640). What is GDP in this economy?
$6,463 billion
Refer to the above data. GDP is:
$350 billion
The approach to measuring GDP that adds together compensation to employees, rents, interest income, dividends, undistributed corporate profits, proprietors’ income, corporate profits, taxes on production and imports, net foreign factor income, a statistical discrepancy, and consumption of fixed capital is the:
Income approach
What is one major measure of economic growth?
Changes in real GDP
A supply factor in economic growth would be:
An increase in the quantity of labor
The single most important source of productivity for economic growth for the United States has been:
Technological advance
Which is the single most important source of U.S. economic growth?
Increases in labor productivity
What economic concept would be most closely associated with a situation where an aluminum plant uses extensive computerization on the production line to reduce per-unit costs of production?
Economies of scale
The number of years required for real GDP to double can be found by:
dividing 70 by the annual growth rate.
Countries that have experienced modern economic growth have also tended to:
move toward more democratic forms of government.
Economic historians date the start of the Industrial Revolution around the year 1776, when James Watt:
invented and built a more powerful and efficient steam engine.
Which of the following institutional arrangements is most likely to promote growth?
Unrestricted trade between nations.
A competitive market system:
encourages growth by allowing producers to make profitable investment decisions based on market signals.
Market economies have been characterized by:
occasional instability of employment and price levels.
Which of the following is not seen by economists as an underlying cause of business cycle fluctuations?
All of the above are identified as causes of business cycle changes.
Innovations such as the microchip and the Internet lead to business cycle variations because:
significant innovations occur irregularly and unexpectedly.
Refer to the above information. The labor force in Scoob is:
102 million.
Refer to the above information. The unemployment rate in Scoob is:
6.9 percent.
Refer to the above information. If the natural rate of unemployment in Scoob is 5 percent, then:
cyclical unemployment is about 2 percent.
Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, the official unemployment rate would:
Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:
structural unemployment.
Search unemployment and wait unemployment are types of:
frictional unemployment
In the depth of the Great Depression, the unemployment rate in the United States was about:
25 percent.
If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced:
deflation of 3.33 percent.
If the Consumer Price Index rises from 300 to 333 in a particular year, the rate of inflation in that year is:
11 percent.
If the rate of inflation is 12 percent per year, the price level will double in about:
6 years.
Demand-pull inflation:
occurs when total spending exceeds the economy’s ability to provide output at the existing price level.
Inflation initiated by increases in wages or other resource prices is labeled:
cost-push inflation.
Assume a nation’s current production possibilities are represented by the curve AB in the above diagram. Positive economic growth would best be indicated by a:
Shift in the curve from AB to CD
The most important determinant of consumer spending is:
the level of income.
The natural rate of unemployment:
Is equal to the total of frictional and structural unemployment
The Consumer Price Index was 247 in year 1 and 272 in year 2. The rate of inflation in year 2 was:
10 percent
Assume a machine which has a useful life of only one year costs $2,000. Assume, also, that net of such operating costs as power, taxes, and so forth, the additional revenue from the output of this machine is expected to be $2,300. The expected rate of return on this machine is:
15 percent.
Which statement is true?
An increase in stock prices makes stockholders feel wealthier
Disposable income equals:
Consumption plus saving
Refer to the above graph. At income level 3, the amount of saving is represented by the line segment:
Refer to the above graph. At income level 3, the amount of consumption is represented by the line segment:
Dissaving occurs when:
Income is less than consumption
Which would shift the saving schedule upward?
A decrease in wealth
As the consumption and saving schedules relate to real GDP, an increase in taxes will shift:
Downward both the consumption and saving schedules
Refer to the above table. The marginal propensity to consume is:
Refer to the above table. The marginal propensity to save is:
Refer to the above table. The multiplier in this economy is: