What are Capital goods?

Select one:

a.Goods used for consumption in the production process

b.None of them

c.Goods and services that are consumed fully when purchased by the consumers

d.Goods such as tools, machinery, etc which are used to create final consumer goods

The sum of compensation to employees, rental income, corporate profits, net interest, and proprietors? income is

Select one:

a.gross domestic product.

b.net domestic product.

c.gross domestic income.

d.net domestic income at factor cost.

The unemployment rate is the ............ who are unemployed.

Select one:

a.percentage of the working-age population

b.number of people in the labor force

c.percentage of people in the labor force

d.percentage of people in the country

Potential GDP is

Select one:

a.another name for real GDP.

b.the maximum amount of GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation.

c.the level of GDP not adjusted for price changes.

d.always different from real GDP.

Structural unemployment

Select one:

a.falls as the pace of technological progress increases.

b.generally lasts longer than frictional unemployment.

c.falls during the expansion phase of the business cycle.

d.falls when the government provides more generous unemployment compensation benefits.

Marginally attached workers fall into which of the following population categories?

Select one:

a.unemployed

b.labor force

c.employed

d.not in the labor force

To measure GDP using the expenditure approach you must collect data on

Select one:

a.inflation.

b.wages.

c.exports.

d.saving.

In the circular flow model of an economy, households

Select one:

a.receive income from the sale of factors in the goods markets.

b.receive income from producers for the use of factors in the factor markets.

c.pay firms for the use of their factors.

d.receive income from buyers of goods and services.

The working-age population can be divided into two groups,

Select one:

a.people in the labor force and people who are not in the labor force.

b.people looking for work and those in the armed forces.

c.people in the labor force and people with a job.

d.people in the labor force and people looking for work.

The low point of economic activity during a business cycle is called the

Select one:

a.trough.

b.failure.

c.peak.

d.recession.

When cyclical unemployment increases and other things remain the same, .............

Select one:

a.the natural unemployment rate does not change

b.the amount of frictional unemployment increases

c.the natural unemployment rate increases

d.the amount of structural unemployment decreases

The circular flow diagram shows

Select one:

a.the flows between different sectors of the economy.

b.how the prices of factors are determined.

c.how nominal GDP is distinct from real GDP.

d.the effects of inflation in a simple economy.

What is the term in economics for the consumption of fixed capital?

Select one:

a.Investment

b.Value added

c.Production flow

d.Depreciation

Which of the following factors might cause a country's consumption function to shift upwards?

Select one:

a.A fall in interest rates

b.Expectations that the economy will soon go into a recession

c.A fall in share prices.

d.Households deciding to be thriftier

The business cycle refers to

Select one:

a.changes in the level of employment.

b.changes in the level of the stock market.

c.fluctuations in the level of real GDP around potential GDP.

d.changes in the level of nominal GDP.

During a recession, the .............

Select one:

a.number of discouraged workers decreases

b.employment-to-population ratio increases

c.unemployment rate decreases

d.number of marginally attached workers increases

Gross investment equals

Select one:

a.net investment + change in inventories.

b.net investment - depreciation + change in inventories.

c.depreciation + change in inventories.

d.net investment + depreciation.

The difference between gross investment and net investment is

Select one:

a.depreciation.

b.the capital stock.

c.the real interest rate.

d.equal to saving.

Net investment equals

Select one:

a.gross investment/depreciation.

b.gross investment minus depreciation.

c.the total quantity of plant, equipment and buildings.

d.capital stock minus depreciation.

In computing GDP, it is essential to

Select one:

a.avoid double counting.

b.include government tax revenues.

c.count all intermediate products directly as they are produced.

d.include government transfer payments.

In a four-sector economy, which of the following is assumed always to increase when GDP increases?

Select one:

a.X

b.M

c.I

d.G

An individual with good job prospects who is between jobs is best considered as

Select one:

a.cyclically unemployed.

b.structurally unemployed.

c.not in the labor force.

d.frictionally unemployed

Net exports is negative if

Select one:

a.the value of exports exceeds the value of imports.

b.the value of imports exceeds the value of exports.

c.the tariff payments are included in the value of imported and exported items.

d.too much production occurs in the exporting country during the year.

Which of the following best fits the definition of unemployed?

Select one:

a.retired and not working

b.not working and not looking for work

c.working less than a full work week

d.not working but looking for a job

Which type of unemployment increases during a recession?

Select one:

a.structural unemployment

b.the natural unemployment rate

c.cyclical unemployment

d.frictional unemployment

Which of the following is correct?

Select one:

a.Aggregate income is greater than GDP but equal to aggregate expenditure.

b.Aggregate expenditure equals GDP but is less than aggregate income.

c.Aggregate income is greater than aggregate expenditure but equal to GDP.

d.Aggregate income, aggregate expenditure and GDP are all equal.

The natural unemployment rate

Select one:

a.rises with an increase in cyclical unemployment.

b.rises with a decrease in frictional unemployment.

c.falls with an increase in cyclical unemployment.

d.rises with an increase in structural unemployment.

Real GDP measures the

Select one:

a.value of total production linked to prices of a single year.

b.total profits earned by all businesses valued using prices from a single year.

c.general upward drift in prices.

d.changes in the prices of output measured in dollars.

The working-age population is defined as the number of

Select one:

a.people looking for work.

b.people working full-time jobs who are over the age of 16.

c.people over the age of 16 who are not in jail, hospital, or other institution.

d.people who have a job.

Structural unemployment is

Select one:

a.associated with changes in technology that change required job skills.

b.associated with the changing of jobs in a dynamic economy.

c.associated with general downturns in the economy.

d.very short-term unemployment.

The labor force is defined as the number of people who

Select one:

a.would like to have a full-time job but are working part-time.

b.are employed plus the number of people who are unemployed.

c.are available and looking for work but are unable to find employment.

d.would like to have a job but have stopped seeking work

The unemployment rate equals

Select one:

a.the percentage of the labor force currently unemployed.

b.the percentage of the population not currently employed.

c.the rate of change in unemployment figures from one period to another.

d.the total number of people without jobs in a given period.

The aggregate supply curve is

Select one:

a.the total quantity of final goods and services offered for sale at the current price level.

b.the total quantity of raw materials offered for sale at different prices.

c.the total quantity of final goods and services offered for sale at different price levels.

d.the total quantity of intermediate and final goods and service offered for sale at different price levels.

What is "MPS" or the 'marginal propensity to save'?

Select one:

a.none of them

b.the proportion of total additional planned savings to total additional income

c.the fraction of total additional income that is used for consumption

d.the proportion of total additional income to total additional planned savings

Discouraged workers ............ counted as officially unemployed because they .............

Select one:

a.are not; are not actively seeking work

b.are; are not working

c.are; are still in the labor force

d.are not; are not qualified to work

Intermediate goods are not included to calculate the final output because:

Select one:

a.their value is included in final goods so they are not added to avoid the problem of double counting

b.they do not have value

c.none of them

d.they have unknown value

Depreciation is defined as the

Select one:

a.decrease in the stock of capital due to wear and tear.

b.decrease in the stock of capital due to investment by firms.

c.increase in the stock of capital due to wear and tear.

d.increase in the stock of capital due to investment by firms.

Gross domestic product (GDP) is the ............ in a given time period.

Select one:

a.value of all final and intermediate goods and services produced by the economy excluding those goods exported to foreign nations

b.market value of final goods and services produced by the economy

c.value of personal consumption expenditures, gross private domestic investment, and federal government expenditures

d.sum of wage and salary compensation of employees and corporate profits

The labor force is the sum of the

Select one:

a.number of employed people and the number of unemployed people.

b.total population and the number of unemployed people.

c.number of employed people and the working-age population.

d.working-age population and the number of unemployed people.