Macroeconomics- Exam 2

GDP is the total market value of:

All final foods and services produced in an economy in a given year

To avoid multiple counting in national income accounts, only:

Final goods and services should be counted

Which of the following best measures improvements in the standard of living of a nation?

Growth of real GDP per capita

Growth is advantageous to a nation because it:

Lessens the burden of scarcity

The largest componet of GDP is:

Personal consumption expenditures

Money spent on the purchase of a new house is included in the GDP as a part of:

Investment

Which would be considered an investment according to economists?

The purchase of a new machine by Ford

From an economist’s perspective, which is not considered to be an investment?

Purchase of shares of a company stock

Which does not contribute to the production of the domestic output of an economy?

A full-time student

An example of a public transfer payment is a(n):

Veteran’s benefit payment

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 positive number when:

A nation’s exports of goods and services exceed its imports

Net exports is a negative number when:

A nation’s imports of goods and services are greater than its exports

Exports less imports may be defined as:

Net exports

When gross private domestic investment exceeds depreciation, it can be concluded that:

Net investment is positive

The consumption of fixed capital in each year’s production is called:

Depreciation

In an economy that has stationary production capacity:

Net investment is zero

GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1, 989 billion, and gross investment is $1,410 billion. Net exports are:

-$84 billion

Gross domestic product (GDP) is equal to personal consumption expenditures:

Plus gross private domestic investment, plus government spending, and plus net exports

The expenditures or output approach to GDP measures it by summing:

The total spending for consumption, investment, net exports, and government purchases

GDP less consumption of fixed capital equals:

NDP

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 on fixed capital is the:

Income approach

The GDP deflator or price index equals:

Nominal GDP divided by real GDP

The phase of the business cycle in which real GDP declines is called:

A recession

GDP measured using current prices is called:

Nominal GDP

In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

expansion

The United States’ economy is considered to be at full employment when:

about 4-5 percent of the labor force is unemployed

In the United States, the rate of unemployment is highest for:

African-American teenagers

Kara voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kara presently is:

frictionally unemployed

If the unemployment rate is 9 percent and the natural rate of unemployment is 5 percent, then the:

cyclical unemployment rate is 4 percent

Part-time workers are counted as:

fully employed and therefore the official unemployment rate may understate the level of unemployment

A nation’s capital stock was valued at $500 billion at the start of the year and $575 billion at the end. Consumption of private fixed capital in the year was $35 billion. Assuming stable prices, net investment was:

$40 billion

The following national income account data for a hypothetical economy in billions of dollars: government purchases ($1,050); personal consumption expenditures ($4,800); imports ($370); exports ($240); gross domestic investment ($1,130). Personal consumption expenditures are approx. what percentage of this economy?

70 percent

The unemployment rate is the:

percentage of the labor force that is unemployed

The government agency responsible for collecting and reporting and reporting unemployment data is the:

Bureau of Labor Statistics

The number of years required for real GDP to double can be found by:

divining 70 by the annual growth rate

Which of the following economic regions has expirienced the most growth in real GDP per capita since 1820?

United States