Econ Test 1 CH. 24-26

2. The two topics of primary concern in macroeconomics are

5. Which of the following is most closely related to recessions?

7. Real GDP measures the

8. If the prices of all goods and services rose, but the quantity produced remained unchanged, what would happen to nominal and real GDP?

9. Real GDP is preferred to nominal GDP as a measure of economic performance because:

11. Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. This year Harry's again produced 10,000 large pepperoni pizzas (identical to last year's pizzas) but sold them for $12 each. Based on this information we can conclude that Harry's production of large pepperoni pizzas this year:

15. Inflation is defined as

16. Why are economists concerned about inflation?

18. Modern economic growth refers to countries that have experienced an increase in

19. Before the period of modern economic growth

20. In making international comparisons of living standards using GDP, which of the following is not adjusted for in the calculation

25. Which of the following would an economist consider to be investment?

27. If an economy wants to increase its current level of investment, it must

29. Banks and other financial institutions:

32. Demand shocks:

33. Which of the following is an example of a demand shock?

34. Supply shocks:

35. Which of the following is an example of a supply shock?

37. Suppose that Techno TV produces LCD televisions. At a price of $2,000 per television, Techno determines that its optimal output is 3,000 television sets per week. If prices are sticky and fears of a recession reduce demand for LCD televisions, we would expect Techno to:

53. Kara's Kittens typically produces and sells at its optimal (lowest per-unit cost) level of 30 scratching posts per week. Kara's also maintains an inventory of 20 scratching posts. If prices are sticky and there is a positive demand shock this week resulting in demand for 40 scratching posts, we would expect Kara's to:

61. Which of the following best explains why prices tend to be inflexible even when demand changes?

67. The overall behavior of the economy:

2. The agency responsible for compiling the National Income Product Accounts for the U.S. economy is the:

5. A nation's gross domestic product (GDP):

8. Suppose the total monetary value of all final goods and services produced in a particular country in 2010 is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that

9. National income accountants can avoid multiple counting by:

13. If intermediate goods and services were included in GDP:

16. Tom Atoe grows fruits and vegetables for home consumption. This activity is:

18. Alejandro Scoobertini owns a store specializing in soccer jerseys. In 2012, he purchased $150,000 worth of jerseys from manufacturers, employed one worker for $40,000, purchased $20,000 worth of supplies from an office supply store, and sold jerseys for $280,000. Based on this information, what was the value added at Alejandro's store in 2012?

19. Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $700. Donita sells the dresses for $1,200 to kids attending the prom. The total contribution to GDP of this series of transactions is:

22. Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker. The completed speaker sells for $70. The value added by the manufacturer for each speaker is:

23. Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete. It sells 10,000 cubic yards of concrete at $30 a cubic yard. The value added by Setup Corporation is:

26. The concept of net domestic investment refers to

Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment Economy C: gross investment exceeds depreciation Refer to the information. Positive net investment is occurring in:

34. GDP can be calculated by summing:

35. In national income accounting, the consumption category of expenditures includes purchases of:

38. Net exports are negative when:

39. Which of the following is not economic investment?

42. Suppose that inventories were $40 billion in 2012 and $50 billion in 2013. In 2013, national income accountants would:

43. Suppose that inventories were $80 billion in 2012 and $70 billion in 2013. In 2013, national income accountants would

48. In calculating GDP, governmental transfer payments, such as Social Security or unemployment compensation, are:

52. Transfer payments are:

54. In the treatment of U.S. exports and imports, national income accountants:

56. The ZZZ Corporation issued $25 million in new common stock in 2013. It used $18 million of the proceeds to replace obsolete equipment in its factory and $7 million to repay bank loans. As a result, investment:

91. The total amount of income earned by U.S. resource suppliers in a year, plus taxes on production and imports, is measured by

95. Which of the following best defines disposable income?

101. Nominal GDP is:

103. Real GDP measures:

104. Nominal GDP is adjusted for price changes through the use of:

106. A price index is:

114. Suppose nominal GDP in 2009 was $100 billion and in 2010 it was $260 billion. The general price index in 2009 was 100 and in 2010 it was 180. Between 2009 and 2010 the real GDP rose by approximately:

150. The growth of GDP may understate changes in the economy's economic well-being over time if the:

151. Environmental pollution is accounted for in:

1. Economic growth is best defined as an increase in

5. If a nation's real GDP increases from 100 billion to 106 billion and its population jumps from 200 million to 212 million, it real GDP per capita will:

6. For a nation's real GDP per capita to rise during a year:

7. Growth is advantageous to a nation because it

15. At an annual growth rate of 7 percent, real GDP will double in about:

16. If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately:

17. If the economy's real GDP doubles in 18 years, we can:

22. Which of the following statements is most accurate about modern economic growth?

23. Countries that have experienced modern economic growth have also tended to

24. The Industrial Revolution and modern economic growth resulted in:

25. Economic historians date the start of the Industrial Revolution around the year 1776, when James Watt:

26. Real per capita GDP

31. Economic growth rates in follower countries:

32. Real GDP per capita in the United States (as of 2010) exceeds that of France primarily because:

34. Strong property rights are important for modern economic growth because:

37. A competitive market system

47. Suppose that an economy's labor productivity and total worker-hours each grew by 3 percent between year 1 and year 2. We could conclude that this economy's:

49. Suppose that an economy's labor productivity fell by 3 percent and its total worker-hours remained constant between year 1 and year 2. We could conclude that this economy's:

56. An outward shift of a nation's production possibilities curve:

60. If the number of worker-hours in an economy is 100 and its labor productivity is $5 of output per worker-hour, the economy's real GDP:

64. Other things equal, which of the following would decrease the rate of economic growth, as measured by changes in real GDP?

66. Which of the following would not be expected to increase labor productivity?

70. The largest contributor to increases in the productivity of American labor is:

72. The historical reallocation of labor from agriculture to manufacturing in the United States has

75. A nation's infrastructure refers to:

79. Human capital refers to

84. If the growth trend of labor productivity is 3 percent per year, the number of years that it will take for the standard of living to double will be about:

87. The period in the U.S. economy from 1995 to 2012 is characterized by:

92. All of the following are economic implications of the 1995-2012 rise in the average rate of productivity growth except:

94. Economists who believe that the 1995-2012 rise in the average rate of productivity growth may be long lasting claim that the above-normal economic growth in the United States between 1995 and 2012 was caused by:

99. Critics of economic growth:

100. Proponents of economic growth make all of the following arguments except