Macro Final Exam

What is an economic model?

Which of the following is a normative economic statement?

________ exists because unlimited wants exceed the limited resources available to fulfill those wants

Carmelita can perform either a combination of 35 manicures and 70 pedicures or a combination of 50 manicures and 45 pedicures. If she now performs 35 manicures and 70 pedicures, what is theopportunity cost of performing an additional 15 manicures?

Increasing marginal opportunity cost implies that

Comparative advantage means

A critical function of the government in facilitating the operation of a market economy is

The primary purpose of patents and copyrights is to

Which of the following is a factor of production?

Which of the following will not shift the demand curve for a good?

If a decrease in income leads to in a decrease in the demand for ice cream, then ice cream is

Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for laser printer ink cartridges?

Which of the following would cause an increase in the supply of cheese?

Assume there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation?

Studies have shown that smoking cigarettes can cause heart disease. Assume this is true, and favorable weather has increased the tobacco harvest in North Carolina. In the market for cigarettes,these two developments would

Brett buys a new cell phone for $100. He receives consumer surplus of $80 from the purchase. How much does Brett value his cell phone?

The area above the market supply curve and below the market price

Economic efficiency is achieved when there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and...

A tax imposed by a government on imports of a good into a country is called

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of the

following would explain this pattern of trade?

Autarky is a situation in which a country

Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets. This statement describes the ________argument for protectionism.

The quota on imported sugar costs U.S. consumers more than $2 billion annually and protects very 47)few jobs. Why does Congress maintain a sugar quota that protects only a few thousand workerswhile forcing millions of people to pay higher prices for sugar products?

Macroeconomics seeks to understand

The purchase of a new automobile is included in

The purchase by a foreign government of an airplane produced in the United States is included in 50)U.S.

In a small economy, consumption spending in 2013 is $6,000, government spending is $1,200, gross investment is $1,500, exports are $2,000, and imports are $1,000. What is gross domestic product in2013?

Increases in real GDP would understate the well-being of a country over time if, over that time period, the

Which of the following is counted in GDP?

Which of the following could cause nominal GDP to increase, but real GDP to decrease?

If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years?

Suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed become employed. The labor force participationrate will

Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as

Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true extent of joblessness?

f the number employed is 190 million, the number unemployed is 10 million, and the working-age population is 250 million, then the labor force participation rate is

If the number employed is 190 million, the working-age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is

For the last few decades, the labor force participation rates of men have ________, and the labor force participation rates of women have ________.

Emma is a road construction worker. During the winter months, Emma finds it more difficult to get work. The unemployment Emma experiences in the winter is

Structural unemployment is the result of

The United States has ________ social insurance programs, and generally has a ________ unemployment rate, as compared to Canada and Western Europe.

Establishing a state employment agency that speeds up the process of matching unemployed workers with unfilled jobs is an attempt to lower

Assume the average annual CPI values for 2012 and 2013 were 207.3 and 215.3, respectively. What was the percent increase in the CPI between these two years?

The substitution bias in the consumer price index refers to the idea that consumers ________ the quantity of products they buy in response to price, and the CPI does not reflect this and ________the cost of the market basket.

Suppose your grandfather earned a salary of $12,000 in 1964. If the CPI is 31 in 1964 and 219 in 2013, then the value of your grandfather's salary in 2013 dollars is approximately

Suppose you borrow $1,000 at an interest rate of 12 percent. If the expected real interest rate is 5 percent, then the rate of inflation over the upcoming year that would be most beneficial to youwould be a rate of inflation

If you want to earn a real interest rate of 3% on money you lend, and you expect that inflation will be 2%, what nominal rate of interest will you charge?

The costs to firms of changing prices are called

Which of the following is not a cost posed by inflation?

If you invest $10,000 in a bond that earns 8% interest per year, how many years will it take to double your money?

The total amount of physical capital available in a country is know as the country's

Which of the following is an example of human capital?

Suppose that real GDP for 2012 was $10,000 billion and real GDP for 2013 was $11,000 billion. What is the rate of growth of real GDP between 2012 and 2013?

Which of the following is most likely to be able to sustain economic growth in an economy?

Under which of the following circumstances would the government be running a deficit?

The demand for loanable funds is downward sloping because the ________ the interest rate, the ________ the number of profitable investment projects a firm can undertake, and the ________ thequantity demanded of loanable funds.

If technological change increases the profitability of new investments for firms, then the ________ curve for loanable funds will shift to the ________.

During the recession phase of the business cycle,

During a recession, spending on ________ tends to fall more dramatically than spending on ________.

If real GDP in the United States is growing at an annual rate of 3.2% per capita and Bolivia's real GDP per capita is growing at a rate of 1.3%, which of the following would we expect in the longrun? Assume real GDP per capita in the United States begins at a level above that of real GDP percapita in Bolivia.

In the long run, ________ differences in economic growth rates result in ________ differences in GDP per capita.

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output, we say we are facing

The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s, but eventually this growth slowed. Why did this occur?

Which factors explain labor productivity?

Knowledge capital is ________ in production and ________. As a result, firms ________ free ride.

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Each of the following is one of the four main categories of spending identified by John MaynardKeynes except

Consumption is $5 million, planned investment spending is $8 million, government purchases are $10 million, and net exports are equal to $2 million. If GDP during that same time period is equalto $27 million, what unplanned changes in inventories occurred?

If aggregate expenditure is less than GDP, how will the economy reach macroeconomic equilibrium?

At macroeconomic equilibrium, total ________ equals total ________.

A stock market boom which causes stock prices to rise should cause

If inflation in the United States is higher than inflation in other countries, what will be the effect on net exports for the United States?

Increases in the price level will

If firms are more pessimistic and believe that future profits will fall and remain weak for the next few years, then

If disposable income increases by $100 million, and consumption increases by $90 million, then the marginal propensity to consume is

If an increase in investment spending of $20 million results in a $200 million increase in equilibrium real GDP, then

Which of the following correctly describes how an increase in the price level affects consumption spending?

What impact does an increase in the price level in the United States have on net exports and why?

The ________ shows the relationship between the price level and quantity of real GDP demanded.

Which of the following best describes the "wealth effect"?

If the U.S. dollar decreases in value relative to other currencies, how does this affect the aggregate demand curve?

Last week, 13 Mexican pesos could purchase one U.S. dollar. This week, it takes 11 Mexican pesos to purchase one U.S. dollar. This change in the value of the dollar will ________ exports from theUnited States to Mexico and ________ U.S. aggregate demand.

Which of the following would not be considered a positive addition to household wealth?