Econ Test Practise

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1.  Durable goods $2,000 Services   4,000 Business purchases of capital goods     200 Fixed investment    600 Exports     600 Imports     800 Nondurable goods     500 Inventory investment                300 Government transfer payments     400 Purchases of new residential housing     400 Government purchases     900   111.   Refer to Exhibit 7-3.  Net exports is equal to
A.
B.
C.
D.
E.
2.  You have data for compensation of employees, proprietors' income, rental income, and net interest. Can you compute national income?
A.
B.
C.
D.
E.
3.  In an economy with 100 million people, 70 million hold jobs and 19 million are not working but are looking for jobs. The unemployment rate is
A.
B.
C.
D.
E.
4.  In order to be classified as unemployed, a person must
A.
B.
C.
D.
5.  In 2009, the U.S. GDP was approximately
A.
B.
C.
D.
6.  A person in the civilian labor force falls into one of two categories:
A.
B.
C.
D.
7.  Given Change in Economic Factor Real GDP Price Level Increase in foreign real national income (1) (2) Decrease in wage rates (3) (4) Beneficial supply shock (5) (6) Decrease in government purchases (7) (8) Increase in personal income taxes (8) (10) Decrease in labor productivity (11) (12) Refer to Exhibit 8-2.  Based on the given change, what word (rises or falls) should go in blank (7) and blank (8), respectively, to summarize the resulting impact on short run equilibrium?
A.
B.
C.
D.
8.  The employment rate equals the number of
A.
B.
C.
D.
E.
9.  A lower income tax rate __________ consumption, causing a __________ the AD curve.
A.
B.
C.
D.
10.  Persons who are retired or engaged in own-home housework are considered to be in which of the following categories?
A.
B.
C.
D.
11.  One of the reasons why the AD curve slopes downward is that as the
A.
B.
C.
D.
E.
12.  Personal income is
A.
B.
C.
D.
E.
13.  Given Change in Economic Factor Real GDP Price Level Increase in foreign real national income (1) (2) Decrease in wage rates (3) (4) Beneficial supply shock (5) (6) Decrease in government purchases (7) (8) Increase in personal income taxes (8) (10) Decrease in labor productivity (11) (12) Refer to Exhibit 8-2.  Based on the given change, what word (rises or falls) should go in blank (5) and blank (6), respectively, to summarize the resulting impact on short run equilibrium?
A.
B.
C.
D.
14.  A depreciation of the U.S. dollar tends to __________ U.S. net exports and shift the U.S. AD curve to the __________.
A.
B.
C.
D.
15.  Exhibit 7-1    Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. Which of the following summations represents GDP using the expenditure approach?
A.
B.
C.
D.
16.  Look at the following data: personal income = $4,900 billion; personal taxes = $900 billion; transfer payments = $980 billion. What is disposable income?
A.
B.
C.
D.
E.
17.  A rise in wage rates
A.
B.
C.
D.
E.
18.  A decrease in the price of electricity will cause
A.
B.
C.
D.
E.
19.  The change in the purchasing power of dollar-denominated assets (such as cash holdings) is the
A.
B.
C.
D.
E.
20.  An increase in labor productivity shifts the
A.
B.
C.
D.
E.
21.  If Real GDP was $8,742 billion in year 2 and it had been $8,509 billion in year 1, what was the approximate economic growth rate during this time period?
A.
B.
C.
D.
22.  Which of the following is the correct equation for computing personal income?
A.
B.
C.
D.
23.  "Economic growth" has occurred if the
A.
B.
C.
D.
24.  The short-run aggregate supply curve is
A.
B.
C.
D.
25.  An increase in the price of nonlabor inputs
A.
B.
C.
D.
E.
26.  Suppose a drop in stock prices makes people feel less wealthy. This would cause __________ the economy's AD curve.
A.
B.
C.
D.
27.  As the price level falls,
A.
B.
C.
D.
E.
28.  Which of the following items is a final good?
A.
B.
C.
D.
E.
29.  An increase in the money supply may __________ total expenditures, leading to a __________ shift of the AD curve.
A.
B.
C.
D.
30.  Part of the story of the interest rate effect is that a lower price level causes __________ in the supply of credit, which then causes the interest rate to __________.
A.
B.
C.
D.
31.  If investment changes because of a change in a factor other than the price level, then the
A.
B.
C.
D.
32.  The real balance effect helps to create "a change in
A.
B.
C.
D.
33.  A falling interest rate affects the demand for consumer __________ and shifts AD to the __________.
A.
B.
C.
D.
34.  According to the classical theorists, it is impossible to have
A.
B.
C.
D.
E.
35.  If there are 10 job losers, 12 job leavers, 13 reentrants, and 12 new entrants, then there are __________ unemployed persons.
A.
B.
C.
D.
E.
36.  Given Change in Economic Factor Real GDP Price Level Increase in foreign real national income (1) (2) Decrease in wage rates (3) (4) Beneficial supply shock (5) (6) Decrease in government purchases (7) (8) Increase in personal income taxes (8) (10) Decrease in labor productivity (11) (12) Refer to Exhibit 8-2.  Based on the given change, what word (rises or falls) should go in blank (1) and blank (2), respectively, to summarize the resulting impact on short run equilibrium?
A.
B.
C.
D.
37.  Expectation of lower future prices is a
A.
B.
C.
D.
38.  Suppose there are 200 million people in the population, 120 million people in the civilian labor force, and 90 million people are employed.  The number of people unemployed is _______ million and the unemployment rate is ___________ percent.
A.
B.
C.
D.
39.  Underground activities are not counted in GDP because
A.
B.
C.
D.
40.  The unemployment due to changes in the types of skills employers require is called __________ unemployment.
A.
B.
C.
D.
41.  Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. Which of the following summations represents personal income?
A.
B.
C.
D.
42.  The natural rate of unemployment exists at
A.
B.
C.
D.
E.
43.  If in the process of calculating GDP, the market value of all intermediate goods is added to the market value of all final goods, this would
A.
B.
C.
D.
44.  Which of the following is not consistent with a self-regulating economy?
A.
B.
C.
D.
E.
45.  Real GDP is always measured in
A.
B.
C.
D.
E.
46.  The civilian non-institutional population can be broken down into two groups:
A.
B.
C.
D.
47.  A short-run aggregate supply curve shows the
A.
B.
C.
D.
48.  If the economy is in a recessionary gap,
A.
B.
C.
D.
E.
49.  When the economy is at its full employment Real GDP, the unemployment rate is equal to
A.
B.
C.
D.
50.  Which of the following is a nonmarket good?
A.
B.
C.
D.
E.
51.  Gross Domestic Product (GDP) is the total market value of all
A.
B.
C.
D.
52.  An economic policy initiative results in the AD curve shifting to the right. As a result,
A.
B.
C.
D.
E.
53.  Suppose consumption decreases at each price level. As a result, aggregate demand __________, and the AD curve shifts __________.
A.
B.
C.
D.
54.  Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. What is the value of  disposable income?
A.
B.
C.
D.
E.
55.  The CPI was 138 in one year and 146 the following year. Approximately how much did prices rise between the two years?
A.
B.
C.
D.
56.  A decrease in the price level
A.
B.
C.
D.
E.
57.  Suppose the real exchange rate of 10 Mexican pesos to the dollar moves to 9 pesos to the dollar. The dollar has ________________, making Mexican goods __________ expensive for Americans.
A.
B.
C.
D.
58.  An increase in the price of oil will cause
A.
B.
C.
D.
E.
59.  Which of the following would definitely not be included in the measurement of GDP?
A.
B.
C.
D.
60.  Which of the following illustrates double counting?
A.
B.
C.
D.
E.
61.  The civilian non-institutional population consists of everyone in the population who is
A.
B.
C.
D.
E.
62.  Changes in which of the following will not cause the SRAS curve to shift?
A.
B.
C.
D.
E.
63.  Durable goods $2,000 Services   4,000 Business purchases of capital goods     200 Fixed investment    600 Exports     600 Imports     800 Nondurable goods     500 Inventory investment                300 Government transfer payments     400 Purchases of new residential housing     400 Government purchases     900 Refer to Exhibit 7-3.  GDP is equal to
A.
B.
C.
D.
E.
64.  As the price level falls, ceteris paribus, people holding some of their wealth in monetary form become
A.
B.
C.
D.
65.  The cyclical unemployment rate is defined as the __________ unemployment rates.
A.
B.
C.
D.
66.  Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. Which of the following summations represents disposable income?
A.
B.
C.
D.
67.  "Full employment" is said to exist when the unemployment rate equals
A.
B.
C.
D.
68.  Persons who are retired or engaged in own-home housework are considered to be in which of the following categories?
A.
B.
C.
D.
69.  Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. What is the value of  personal income?
A.
B.
C.
D.
E.
70.  Unemployment that arises as a result of the time it takes for unemployed people to locate a job utilizing their transferable skills is called __________ unemployment.
A.
B.
C.
D.
71.  An appreciation of the U.S. dollar tends to __________ U.S. net exports and shift the U.S. AD curve to the __________.
A.
B.
C.
D.
72.  If consumption changes because of a change in the price level, then the
A.
B.
C.
D.
E.
73.  An inflationary gap exists when AD and SRAS
A.
B.
C.
D.
74.  A recession is always part of a
A.
B.
C.
D.
75.  Suppose the economy's short-run equilibrium point is to the left of the Natural Real GDP. Which of the following is true?
A.
B.
C.
D.
76.  The real balance effect is one of the
A.
B.
C.
D.
77.  Suppose consumption increases at each price level. As a result, aggregate demand __________, and the AD curve shifts __________.
A.
B.
C.
D.
78.  A plumber who quits his job in San Diego and moves to Orlando where additional plumbers are needed is said to be ___________________ unemployed
A.
B.
C.
D.
79.  John just bought shares of stock in IBM for $10,000 and paid a $90 commission to his broker. How did this affect GDP?
A.
B.
C.
D.
80.  Given Change in Economic Factor Real GDP Price Level Increase in foreign real national income (1) (2) Decrease in wage rates (3) (4) Beneficial supply shock (5) (6) Decrease in government purchases (7) (8) Increase in personal income taxes (8) (10) Decrease in labor productivity (11) (12) Refer to Exhibit 8-2.  Based on the given change, what word (rises or falls) should go in blank (9) and blank (10), respectively, to summarize the resulting impact on short run equilibrium?
A.
B.
C.
D.
81.  In the United States, by far the largest expenditure component in GDP is
A.
B.
C.
D.
E.
82.  Suppose there are 50 million people in the population, 25 million people in the civilian labor force, and 20 million people are employed.  The number of people unemployed is _______ million and the unemployment rate is ___________ percent.
A.
B.
C.
D.
83.  If the CPI is 170 and nominal income is $45,000, approximately what does real income equal?
A.
B.
C.
D.
84.  Suppose the civilian non-institutional population equals 100,000; the civilian labor force equals 75,000; there are 70,000 employed persons and 5,000 unemployed persons. If 5,000 persons who are currently "not in the labor force" decide to join the civilian labor force, and 3,000 are unemployed, then
A.
B.
C.
D.
85.  Which of the following would not be included in the calculation of this year's GDP?
A.
B.
C.
D.
86.  Disposable income is
A.
B.
C.
D.
E.
87.  The standard definition of "recession" is
A.
B.
C.
D.
88.  Velocity is the average number of times a dollar is spent to buy
A.
B.
C.
D.
89.  As the price level rises, ceteris paribus, people holding some of their wealth in monetary form become
A.
B.
C.
D.
90.  Greater wealth makes __________ people willing to spend the national income, causing __________ the economy's AD curve.
A.
B.
C.
D.
91.  Suppose the market basket consists of 10X, 20Y, and 30Z. Current-year prices are $1.20 for each unit of X, $0.96 for each unit of Y, and $1.30 for each unit of Z. Base-year prices are $1.00 for each unit of X, Y, and Z. What is the approximate CPI in the current year?
A.
B.
C.
D.
92.  A decrease in the money supply may __________ total expenditures and thus __________ aggregate demand.
A.
B.
C.
D.
93.  Gross Domestic Product is computed by using
A.
B.
C.
D.
94.  Smith's income was $50,000 in year 1 and $55,600 in year 2. The CPI was 114 in year 1 and 124 in year 2. What was the approximate percentage change in Smith's real income between the two years?
A.
B.
C.
D.
E.