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51 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Most business firms in the US are |
Sole proprietorship Partnerships Corporations |
Sole proprietorship |
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Most American corporations are |
Publicly owned Very large Very small Owned by foreigners |
Very small |
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Which statement is true? |
Bondholders are owners of a corporation. The largest firms in the US are corporations There are only 10 million business firms in the US No business firm has sales over 10 billion. |
The largest firms in the US are corporations. |
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Which statement is false? |
There are more partnerships than corporations. There are more proprietorships than partnerships and corporations combined. Less than one of every ten US businesses is a partnership. There are about 30 million business firms in the US. |
There are more partnerships than corporations. |
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Of the four types of investment, the only one that can be negative is |
Inventory investment Investment in plant. Investment in equipment Investment in residential housing |
Inventory investment |
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The flow of foreign savings into the US |
Is relatively low because US interest rates are so high. Is relatively high because US interest rates are so low. Plays a very small role in the American economy Plays a large and important role in the American economy. |
Plays a large and important role in the American economy. |
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The level of investment tends to rise as the capacity utilization rate _____, and the interest rate ______. |
Rises, rises Falls,falls Rises,falls Falls,rises |
Rises, falls |
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During recessions, inventory investment |
Goes up while the investment in plants and equipment falls. Is steady while the investment in plants and equipment rises. Goes down but not as much as the investment I'm plants and equipment. Goes down even becoming negative while the investment in plabtsvabs equipment is more stable. |
Goes down even becoming negative while the investment in plabtsvabs equipment is more stable. |
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You have the chance to borrow 100,000$ for one year at an interest rate of 6 % and can invest this money in inventory. You would definitely borrow the money for investment if you had expected profits of ______ on your investment. |
$1000 $6000 $4000 $15000 |
$15000 |
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Gross investment minus _______ equals net investment. |
GDP Depreciation Savings Net exports |
Depreciation. |
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The largest sector of GDP is |
C I G Xn |
C |
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In 2012, US GDP was almost |
750 billion 7.5 trillion 16 trillion 77 trillion |
16 trillion |
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If you wanted to compare the standard of living of Americans with Canadians, the best measure would be |
GDP real GDP per capita GDP Per capita real GDP |
Per capita real GDP |
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GDP is thar nation's expenditure on _______ goods and services produced during the year at _______ prices. |
Intermediate, wholesale Intermediate, market Final, wholesale Final, market |
Final, Market |
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Which of the following is not a component of national income? |
Wages and salaries Rental income Interest Consumption expenditures |
Consumption expenditures |
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In the value added process of producing and selling bread, which is the step that counts in our GDP? |
When the garner sells wheat to the miller When the miller sells flour to the baker. When the flout is shooed to the bakery When the bread is delivered to the supermarket. When the bread is sold to a college student. |
When the bread is sold to a college student |
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If the GDP deflate in year X is 112 then |
Real and nominal GDP will be equal Prices have risen 12% since the base year Real GDP will be larger than nominal GDP Year X probably occurred before the base year. |
Prices have risen 12% since the base year . |
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If Nominal GDP grew at 2% last year and prices rose by 4%, then real GDP |
Rose by 6% Rose by 2% Fell by 2% Did not change |
Fell by 2% |
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Two countries that are among the top 10 with the highest measures of per capita real GDP are ... |
Spain and Canada US and Canada China and Japan US and Japan |
Us and Japan |
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Which of the following is not a shortcoming of GDP as a measure of well being? |
Household production is included Illegal production is not counted The underground economy is excluded GDP does not take into account leisure time |
Household production is included |
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Since November 1982, we have had ______ recessions. |
One Two Three Four Five |
Three |
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A recovery is over when |
Output rises Output has reached the level of the previous peak The unemployment rate begins to decline The consumer confidence index rises The index of leading economic indicators rises |
Output has reached the level of the previous peak |
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Each of the following is a leading economic indicator except
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Average workweek of production workers in manufacturing
New orders for capital goods
The unemployment rate
New building permits issued |
The unemployment rate |
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Which is the most accurate statement? |
The period 2001 through 200r was one of deflation. A CPI of 60 means that prices rose 60% Consumer prices in 2005 were about 10 times as high as they were in 1945 Consumer prices in 2006 were less than what they were in 1990 |
Consumer prices in 2005 were about 10 times as high as they were in 1945 |
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Which statement about the computation of the unemployment rate is false? |
The unemployed may be over counted because people collecting unemployment benefits, who may not be seriously looking for work, are counted as unemployed when they report to a state employment office The unemployed may be under counted because those who want to work, but have given up looking, are not counted as unemployed. The unemployed may be under counted because if you are currently our of work, but did work one day during that month, you are counted as unemployed. The unemployed may be under counted because only those are collecting unemployment insurance benefits are counted as unemployed. |
The unemployed may be under counted because only those are collecting unemployment insurance benefits are counted as unemployed. |
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Which of the following statements is true for the US economy of 2013? |
The economy is in prosperity, but unemployment remains high. The economy is still in recession but inflation is dangerously high. The economy is in prosperity but inflation is dangerously high. The economy is still in recession but unemployment is low |
The economy is in prosperity, but unemployment remains high. |
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Statement I. The natural rate of unemployment while debated is generally considered around 5%. Statement II. The unemployment rate in 2000 was the lowest on record. |
Statement I is true and statement II is false. Statement II is true and statement I is false Both true Both false |
Statement I is true and statement II is false. |
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Which one of the following descriptions of inflation is accurate? |
When there is inflation, the prices of all goods and services are rising. When there is inflation, it almost always accelerates until it becomes a hyperinflation. Once inflation sets in, it is almost impossible to bring under control. While little inflation is good for business, a high rate of inflation is bad for business. |
While little inflation is good for business, a high rate of inflation is bad for business. |
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Statement I. Deflation and disinflation are basically the same thing. Statement II. Deflation is very good for business. |
Statement I true and statement II fasle. Statement II true, statement I false Both true Both false |
Both false |
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Which is the most accurate statement? |
Unemployment is no longer an economic problem. Over 15 million Americans were unemployed soon after the end of the Great Recession. During the period 1998 to 2001 unemployment was our greatest economic problem. The unemployment rate for blacks is a little higher than the unemployment rate for whites. |
Over 15 million Americans were unemployed soon after the end of the Great Recession. |
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Fiscal policy is conducted by |
The president The Congress President and Congress Federal Reserve |
President and Congress |
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How can we close a recessionary gap? |
Raise spending Raise taxes Lower spending Raise interest rates |
Raise spending |
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In an inflationary gap, |
Full-employment GDP is greater than equilibrium GDP Equilibrium GDP is greater than fill-employment GDP. Equilibrium GDP is at the level where aggregate demand equals aggregate supply. Equilibrium GDP is too small |
Equilibrium GDP is greater than fill-employment GDP. |
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On a graph, a recessionary gap is measure ______ and an inflationary gap is measured ______. |
Horizontally, horizontally Horizontally, vertically Vertically, horizontally Vertically , vertically |
Vertically, vertically |
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If equilibrium GDP is at 250 billion and full employment is at 600 billion how much would government purchases have rise if the multiplier is at 5? |
80 120 16 10 |
16 |
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The formula for the multiplier is |
1/MPC 1/(1-MPC) 1-MPC 1/(1-MPS) |
1/(1-MPC) |
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The role of automatic stabilizers is to |
Protect us from the extremes of the business cycle. Protect us from high interest rates choking off acces to credit Protect us from crowding - in Protect us from accumulating massive budget deficits. |
Protect us from the extremes of the business cycle. |
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The "paradox of thrift" asserts that |
If everyone tries to save more, interest rates will rise. If everyone tries to save more, they will all end up saving more. If everyone tries to save more, they will all end up saving less. If everyone stops saving in the short run, we could all actually save more in the long run. |
If everyone tries to save more, they will all end up saving less. |
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Unless extended by the congress, the full amount of time to collect unemployment benefits is |
13 weeks 52 weeks 39 weeks 26 weeks |
52 |
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The effectiveness of fiscal policy depends on timing. Which of the following is not a problem in this regard? |
Recognition lag Decision lag Deficit lag Impact lag |
Deficit lag |
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A federal budget deficit exists when |
Revenues exceed expenditures Expenditures exceed revenues US makes interest payments on the national debt. |
Expenditures exceed revenues |
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Which is one of the three jobs of money ? |
Medium of exchange Standard of value Store a value All of the above |
All |
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Without money, the only way to do business is to ________. |
Use gold Barter IOUS Write a check |
Barter |
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The US dollar traces it's roots back to |
An old British system Scotland Spain Greece |
Spain |
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The sum of currency, demand deposits, travelers checks and other check able deposits is |
M1 M2 M3 Cash minus credit |
M1 |
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The transactions, prevautionary, and speculative motives for holding money were formulated by |
Alam Greenspan Marshall McLuhan Aristotle David Ricardo John Maynard Keynes |
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As prices rise, people seek to |
Hold less money Hold more money Hold the same amount of money None |
Hold more money |
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The creation of money is carried out by |
Individuals Banks Private business firms US treasury |
Banks |
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"Welfare banks" are |
Owned by welfare recipients
Run by city and country welfare departments Credit unions Check cashing stores |
Check cashing stores |
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The federal deposit insurance corporation does each of the following except |
Insure all bank deposits of $10,000 or less. Act as a fire wall against bank panics Assisting banks in taking over failing banks Finance itself by assessing bank deposits |
Insure all bank deposits of $10,000 or less |
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The top 10 banks in the US hold approximately what percentage of all US bank deposits? |
10% one quarter One third 60% |
60% |
