Unit 1
Any point inside a production possibilities curve is...
Ineffecient
According to the business cycle, the actual rate of unemployment equals the natural rate of unemployment when the economy is
On the potential line
Aggregate demand may be measured by adding
C+I+G+(X-N)
Snails take the longest naps of any organisim on earth. What is the longest snail nap on record?
3 years
As an indicator of an impending recession, inventories will most likely...
increase as a result of a decrease in consumption
A leftward shift of the supply curve for computers could be caused by...?
Input Increase-Number of suppliers decrease
Alice, who has left her job in New York, is moving to Atlanta and looking for a job. In terms of employment status, Alice can most accurately be described as
Frictionally
(SEE GRAPH)
According to the graph above, what will employment have to do with restoring the country to long run equilibrium?
As wages increase, the short-run aggregate supply curve will shift to the left to restore long-run equilibrium.
How much of your life do you spend waiting at traffic lights?
2 Weeks
If an automobile was manufactured in 2006 and sold to a consumer in 2007, what was the effect on gross domestic product in 2006 and 2007?
2006 Increase
2007 No Change
A simultaneous increase in both the demand for and the supply of a good in a market will lead to which of the following changes in the equilibrium price and quantity of the good?
Price=Ind
Quantity=Increase
In 2007, the nominal gross domestic product (GDP) was $50 billion and the GDP deflator was 200. Thus real GDP was
25 Billion
Assume that the economy is at full-employment . What would lead to stagflation?
A decrease of the SRAS.
What company was the world's largest producer of tires last year?
Lego
Suppose that the economy is in the midst of a recession and government policy makers want to increase aggregate demand by $600 billion. If the economy’s marginal propensity to consume is 0.75, the government should do which of the following?
Increase spending by $150 billion.
Fish Wheat
Country A 10 Labor Hours 20 Labor Hours
Country B 20 Labor Hours 60 Labor Hours
Who has the comparative advantage in the production of wheat-why?
Country A because they give up 2 labor hours of work instead of 3.
If a nation’s actual real GDP is less than potential real GDP, which of the following must be true about the employment rate?
The actual rate of unemployment exceeds the natural rate of unemployment.
An economy is operating at full employment. Which of the following changes will result in a short-run equilibrium at a level of real output below the full-employment output?
A: A decrease in income tax rates
B: A decrease in exports
C: A decrease in real interest rates
D: An increase in government purchases
E: An increase in capital investments
B
What color is Hippo Milk?
Pink
Which of the following is most likely to be caused by an adverse supply shock?
A: Structural unemployment
B: Frictional unemployment
C: Demand-pull inflation
D: Cost-push inflation
E: Deflation
D
The diagram above shows three production possibilities curves (PPCs). If the current PPC is PPC1, which of the following changes indicates a recession?
Movement from point Y to point Z
If real gross domestic product is increasing at 3 percent per year and nominal gross domestic product is increasing at 7 percent per year, which of the following is necessarily true?
A: Unemployment is increasing.
B: The price level is increasing.
C: Exports exceed imports.
D: The economy is in a recession.
E: The government is running a budget deficit.
B
A decrease in taxes will necessarily result in an increase in what?
GDP or Unemployment
How many time zones does Russia have?
11
Assume that the marginal propensity to consume is 0.90. As a result of an increase in the tax rates, the government collects an additional $20 million. What will be the impact on gross domestic product (GDP) ?
A GDP Decrease by a max of $180 million