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50 Cards in this Set
- Front
- Back
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To judge whether or not an economy is doing well, it is useful to look at:
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GDP
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Gross domestic product (GDP) is the market value of all final goods and services produced ______ in a given period of time.
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Within a country
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Which of the following is the correct definition of GDP?
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The market value of all final goods and services produced within a country in a given period of time
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Over time people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example people eat at restaurants relatively more and prepare their own meals at home relatively less. By itself this change would:
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Make GDP rise over time.
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Consumption spending refers to the spending by households, with the exception of purchases of:
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New housing
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Grapes are:
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Counted as an intermediate good only if they are used to produce another good like wine.
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The local Chevrolet dealership has an increase in inventory of 25 cars in 2003. In 2004 it sells all 25 cars.
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The value of increased inventory will be counted as part of GDP in 2003, but the value of the cars sold in 2004 will not cause GDP to increase.
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An Italian company opens a pasta company in the U.S. The profits from this pasta company are included in:
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U.S. GDP and Italian GNP.
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Government purchases is a part of GDP, it refers to spending on goods and services by.
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Local, state, and federal governments
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From this information we can conclude that real GDP was higher in.
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2000 than in 2001, and real GDP in 2001 was higher than in 2002.
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Suppose GDP consists of wheat and rice. In 2002, 20 bushels of wheat are sold at $4 per bushel, and 10 bushels of rice are sold at $2 per bushel. If the price of wheat was $2 per bushel and the price of rice was $1 per bushel in 2001, the base year, nominal 2002 GDP is:
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$100, real 2002 GDP is $50, and the GDP deflator is 200.
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Suppose that Wisconsin produces cheese and fish. In 2002, 20 units of cheese are sold at $5 each, and 8 units of fish are sold at $50 each. In 2001, the base year, the price of cheese was $10 per unit, and the price of fish was $75 per unit.
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Nominal 2002 GDP is $500, real 2002 GDP is $800, and the GDP deflator is 62.5.
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If nominal GDP is $10 trillion and real GDP is $8 trillion, the GDP deflator is:
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125.
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CPI is a measure of the overall _____ of the goods and services bought by a typical consumer.
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Cost
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The inflation rate is defined as the:
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Percentage change in the price level from the previous period.
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The steps involved in calculating the consumer price index include, in order:
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fix the basket, find the prices, compute the basket’s cost, choose a base year and compute the index.
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Suppose that the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans and that the base year is 2000. What is the consumer price index for 2001?
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120
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What was the inflation rate in 2001?
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20 percent
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The price index in 2001 is 120, and in 2002 the price index is 127.2. What is the inflation rate?
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6 percent
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What is the labor force in this country?
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500,000
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What is the unemployment rate in this country?
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10%
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What is the labor-force participation rate in this country?
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90.90%
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Ingrid takes a university teaching job as an assistant professor in 1974 at a salary of $10,000. By 2004, she has been promoted to full professor, with a salary of $50,000. If the price index in 1974 is 50, and the price index in 2004 is 180, what is Ingrid’s 2004 salary in 1974 dollars?
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$13,889
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Crowding out is a decrease in ________ that results from government borrowing.
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Investment
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Budget surplus is an excess of _______ over ________
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Tax revenue, government spending
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If the nominal interest rate is 8% and rate of inflation is 3%, the real interest rate is:
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5 percent
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Samantha deposits $1,000 in a saving account that pays an annual interest rate of 4 percent. Over the course of a year the inflation rate is 1 percent. At the end of the year Samantha has:
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$40 more in her account, and her purchasing power has increased about $30.
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Productivity is defined as the amount of goods and services produced for each ________ of a ________
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Hour, worker’s time
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A production function describes the relationship between the ________ used in production and the quantity of output from production.
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Quantity of inputs
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A certificate of indebtedness that specifies the obligations of the borrower to the holder is a:
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Bond
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Stock represents
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-A claim to the profits of a firm.
-Ownership in a firm. -Equity finance. |
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Financial intermediaries are the financial institutions through which ________ can indirectly provide funds to borrowers.
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Savers
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The frictional unemployment is the unemployment that results because it takes time for workers to _______ for the jobs that best suit their tastes and skills.
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Search
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The United States of America has the best economic system and it is the largest economy in the world. However,
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We can not get ride of the business cycle.
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As reported in “Fixing the Tax System,” reasons for the projected exponential growth in
the number of taxpayers facing the Alternative Minimum Tax (AMT) include: |
The AMT is not indexed for inflation.
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The author of “Fixing the Tax System” contends that a national retail sales tax would:
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Require substantial markups at the cash register.
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Any and all of the three suggested alternative to the income tax described in “Fixing the Tax System” would:
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Increase the tax burden on low-income households.
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In discussing the currently allowed itemized deductions in “Fixing the Tax System,” the author observes that they:
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complicate tax filing and enforcement.
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As noted in “Companies Slam on the Brakes” the private sector did not suffer as much as it was expected because of:
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-Relatively healthy balance sheet.
-Conservative hiring and recent years expansion. -Well managed inventories. |
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As reported in "Companies Slam on the Brakes” the main reason for low spending by consumers are:
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Tight credit and growing unemployment.
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As noted in "Why Are Taxes So Complicated and What Can We Do About It?" the principal reason tax law is so complicated is that:
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It has many complicated and sometimes inconsistent goals.
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As reported in "Why Are Taxes So Complicated and What Can We Do About It?" factors
that contribute to the complexity of the tax system include all of the following _except: |
The closing of tax loopholes.
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As noted in "Why Are Taxes So Complicated and What Can We Do About It?" the complexity of the tax code:
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Does not bother taxpayers when it reduces their taxes.
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As explained in "Why Are Taxes So Complicated and What Can We Do About It?" under a flat tax system:
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There would be a need to provide transition relief to some businesses.
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The most basic change in the U.S. revenue structure, as proposed in "The Tax Reform Revolution," would be to introduce a new federal tax based on:
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Consumption
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As noted in "The Tax Reform Revolution," the base of both expenditure taxes and sales or value-added taxes is the value of:
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Goods and services purchased.
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As suggested in "The Tax Reform Revolution," the individual's consumption could be measured for a tax on consumption by:
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Deducting savings from income.
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What is a good example of government ethical intervention in the market Economy?
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Minimum wage enforcement
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After the terrorist attack on September 11, governments raised expenditures to increase security at airports. These purchases of goods and services are:
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included in GDP since government expenditures are included in GDP.
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The natural rate of unemployment is the normal rate of unemployment around which the ________ fluctuates.
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Unemployment rate
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