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Exam 2 econemy
| Question | Answer |
|---|---|
| The real rate of interest is | The nominal rate of interest minus the anticipated rate of inflation. |
| Refer to the above figure. Which arrows represent items that are measured in dollar terms? | Arrows A and D |
| How has the pattern of fluctuations in overall U.S. business activity changed since World WAr II? | It has become less volatile. |
| The population is 1,200 million, the labor force is 150 million, and the number of unemployed is 15 million. What is the unemployment rate? | 10 percent |
| Households receive a total income of $5 million. Of this $3.5 million are wages received for labor services, $1 million are rental payments, and $250,000 are interest payments received. What are the costs of production and profits equal to respectively? | $5 million; $250,000 |
| A former buys seed for 15c that is used to grow wheat. The farmer sells wheat miller 30c, who makes flour. The flower is sold baker 60c and the baker makes bread, which is sold grocer 90 cn. The grocer sells bread $1.25. What value added fr grocer? | 35 cents |
| A sustained decrease in the average of all prices of goods and services in the economy is known as | deflation |
| The natural rate of unemployment is | the long-run average rate of unemployment due to frictional and structural causes. |
| Which one of the following describes the current state of economic development in the United States? | Employment is declining in the manufacturing sector and growing in the service sector. |
| Fred recently lost his job as a teller at the bank. The bank explained that they were replacing Frank and others with ATM machines. Fred falls into a category of unemployment known as | structural unemployment. |
| Full employment in the United States today | means about a 95% employment rate. |
| Refer to the above table. Suppose one country has per cap real GDP $1000 & another has per cap real GDP $10,000, or ten times larger. If both countries have a growth rate of 5 percent, how much larger will per capita real GDP the second country 1st 50yrs? | 10 times larger |
| According to the above table, if per capita real GDP is currently $1000, then at a constant annual rate of growth of 8 percent, per capita real GDP ten years from now will be equal to | $2590 |
| Frictional unemployment will always exist since | some workers will always want to make a job transition. |
| A period in which the level of business is consistently less then its long-term trend is known as | recession |
| The dollar value of an industry's sales minus the value of intermediate goods its | value added |
| The rate of economic growth will be faster, the greater is | the rate of saving |
| Refer to the above figure. Point C is known as | a peak |
| Refer to the above figure. Point B is known as | a trough |
| The total value added | equals the retail price. |
| Improvements in labor productivity | contribute to economic growth |
| A job loser is an individual | in the labor force whose employment was involuntarily terminated. |
| Unanticipated positive inflation will create | losses for creditors and gains for debtors. |
| Which one of the following is true? | Our productive capacity declines when net investment is less than zero. |
| Wheat used for producing bread is | an intermediate good. |
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