Principles of Macroeconomics 1st half of the class

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Principles of Macroeconomics 1st half of the class
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2012-04-24 18:42:13
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Principles Macroeconomics
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201201 Spring ECO-202-01 Principles of Macroeconomics
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  1. The introduction of compact discs made vinyl records obsolete. To the extent this caused higher unemployment among workers who had manufactured records, which type of unemployment was created?
    Structural unemployment
  2. What is the traditional definition of a recession according to the National Bureau of Economic Research?
    GDP falls for two consecutive quarters
  3. Which one of the following is NOT a sector in the Bureau of Economic Analysis' system of national accounts?
    The service sector
  4. The purpose of the Dan Ariely video "The High Price of Ownership" which examines how much Duke students value basketball tickets is to:
    provide evidence for sticky wages.
  5. A nonprofit hospital in Chicago would be classified into which sector in the Bureau of Economic Analysis' system of national accounts?
    The households and institutions sector
  6. The “insider-outsider” theory states that workers already employed with a firm can keep their wages artificially high by limiting the firm’s ability to hire new workers or the productivity of new workers. True/false
    True
  7. Suppose we notice that the equilibrium price and quantity of compact discs have both increased. A potential explanation for this is that the demand for CDs has increased. true/false
    True
  8. Suppose nominal GDP in an economy is $11 trillion and real GDP is $10 trillion. What would be the implicit price deflator?
    110
  9. Someone experiencing “frictional unemployment” is someone who …
    is temporarily between jobs.
  10. The implicit price deflator is obtained by …
    dividing nominal GDP by real GDP.
  11. The National Bureau of Economic Research defines a recession as a decline in the GDP for three consecutive quarters. True/false
    False
  12. Suppose a 50-year old, non-institutionalized civilian is not looking for a job, and is considered by the U.S. Bureau of Labor Statistics to be a “discouraged worker”. Which other BLS category would this person belong to?
    Not in the labor force
  13. Which one of the following statements is TRUE?
    Over the last few decades in the United States the percentage of workers working more than 50 hours per week and fewer than 30 hours per week have both increased.
  14. NBER stands for the National Business Economics Review. True/False
    False
  15. EXTRA CREDIT: According to the Classical labor market model, a minimum wage above the equilibrium wage will result in …
    an increase in unemployment
  16. Suppose that an individual making $100,000 per year pays $30,000 in total taxes while a person making $30,000 per year pays $5,000 in total taxes. This is an example of a progressive tax system. True\False
    True
  17. What role does springboarding play in the critical thinking process?
    It is a useful device for figuring out what to look for when searching for possible answers to an economic question.
  18. Gross domestic product is defined as the value of all final and intermediate goods newly produced in an economy in a given period of time.True/ false
    False
  19. According to the text, what is the difference between a closed economy and an open economy?
    A closed economy has no foreign sector while an open economy includes a foreign sector.
  20. Consumer durable goods are those goods that are expected to last longer than …
    3 years
  21. The U.S. Census Bureau is the government agency in charge of compiling the national accounts of the United States. True/ False
    False
  22. How would the U.S. Bureau of Labor Statistics classify a 15-year old individual working 10 hours per week at a restaurant?
    Not surveyed
  23. When the price of a good rises, the quantity demanded tends to decrease. This is an example of what type of relationship?
    Inverse
  24. Critical economic thinking:
    is thinking about your economic thinking while you're thinking in order to make your economic thinking better.
  25. A transfer of goods or services is referred to as …
    an in-kind transfer.
  26. How is the value-added approach to measure GDP calcuated?
    The difference between the selling price and the cost of intermediate goods
  27. In recent years the United States has been a net foreign borrower. True/ Fasle
    False
  28. Which one of the following is a normative statement?
    Reducing unemployment should be the main goal of the government.
  29. Which one of the following statements is FALSE?
    A constant dollar approach to calculating real GDP yields a unique estimate of the growth rate.
  30. Which one of the following statements is FALSE?
    Someone not currently working who has just entered the labor force after graduating college and is actively seeking his or her first job would not be classified as unemployed by the U. S. Bureau of Labor Statistics.
  31. The “sticky wage” theory states that wages may stay at above-equilibrium levels for an extended period of time, thus keeping unemployment high. True./False
    True
  32. Which one of the following statements is TRUE?
    Data on unemployment suggest that if there is a natural rate of unemployment, it has varied over time.
  33. What is represented by a Lorenz curve?
    v The distribution of income in a society
  34. Which one of the following will result in movement along the demand curve for clothing?
    Clothing prices decline because manufacturers shift to production in countries with lower wages.
  35. What is the main policy implication of applying the Classical model to the labor market?
    The government should limit regulations and social programs in order to increase the efficiency of the market.
  36. Suppose that the price of peanut butter increases. What would we expect to happen in the market for jelly (a complement for peanut butter)?
    The price and quantity sold will both decrease.
  37. Using data from the product approach, the largest contributor to the gross domestic product of the United States is the federal government. True / False
    False
  38. The most famous Classical economist was John Maynard Keynes.True/ False
    false
  39. Which one of the following is NOT a reason that markets produce efficient outcomes, according to the basic neoclassical model?
    Markets account for all negative and positive externalities.
  40. The normal boundary of the “macroeconomy” is …
    a nation.
  41. The buying and selling of assets on the expectation of profiting from price changes is known as …
    speculation
  42. Production points along a production possibilities frontier are considered efficient. True/ False
    True
  43. The opportunity cost of something is the value of the next best alternative. True/ False
    True
  44. The two ways distribution can occur is through exchange or transfer. True/ False
    True
  45. The lecture by Harvard philosopher Michael Sandel focuses on:
    the importance of non-market forms of decision making.
  46. Which one of the following statements about markets is FALSE?
    An advantage of markets is that they do not need money to operate smoothly.
  47. A transfer of goods or services is referred to as …
    an in-kind transfer.
  48. According to the text, a shortage occurs whenever a demand curve shifts but the supply curve stays the same. True/ False
    False
  49. Which one of the following statements is FALSE?
    Monetarists believe that the economy can be fine tuned by governments.

  50. In the above supply and demand diagram for wind turbines, the initial supply curve is S0, the initial demand curve is D0, and the initial equilibrium is E0. Then assume that an energy tax on fossil fuels increases the demand for electricity generated using wind turbines, and at the same time the government announces it will offer a tax break for wind turbine producers. Which point is most likely to be the new equilibrium for wind turbines?
    The new equilibrium will not occur at any of the above four points.
  51. Which one of the following is NOT a reason that markets produce efficient outcomes, according to the basic neoclassical model?
    Markets account for all negative and positive externalities.

  52. The question below refers to the following supply and demand diagram for wind turbines. In the above supply and demand diagram for wind turbines, the initial supply curve is S0, the initial demand curve is D0, and the initial equilibrium is E0. Then assume a technology is invented which decreases the production costs for wind turbines. Which point is most likely to be the new equilibrium for wind turbines?
    Point D
  53. A quantity adjustment by suppliers could lead to increased unemployment. True/ False
    True
  54. The Classical Period in economics occurred after the Great Depression. True/ False
    False
  55. The four essential economic activities are …
    production, consumption, distribution, and resource maintenance.
  56. Movement along a production possibilities frontier indicates a change in technology. True/ False
    False
  57. Suppose there is a decrease in the demand for hats. What would we expect to happen to the equilibrium price and quantity of hats?
    Price and quantity will both fall.
  58. The rise of oil prices in the 1970s is an example of a supply shock. True/ False
    True
  59. The economic activity of production would include the mailing of Social Security checks by the U.S. federal government.True/ Flase
    False
  60. The question below refers to the following diagram which illustrates the potential grades Miguel could get on his biology and economics tests based on how much time he devotes to studying each subject. Which one of the points on the above graph is unattainable by Miguel?
    Point E
  61. What is the standard way to organize your economic writing in order to communicate effectively?
    Introduction, Body, and Conclusion.
  62. The purpose of the Dan Ariely video that examines preferences for beer with and without balsamic vinegar is to illustrate:
    how consumer expectations affect well-being.
  63. What is the difference between factual statements and reasoned judgments?
    Factual statements are either true or false; reasoned judgments are neither true nor false.
  64. Monetarist economists argued that the government should primarily focus on …
    keeping the money supply steady.
  65. Which one of the following is an example of a flow?
    The amount of money you receive in salary each month
  66. The growth of global economic production has been accompanied by growth in total emissions of carbon dioxide. True/ False
    True
  67. Depreciation occurs whenever a stock is greater in quantity than a flow. True/ False
    False
  68. Which one of the following would NOT be classified as part of the public purpose sphere?
    A farmer cooperative selling milk
  69. A shift in a supply curve for a good occurs whenever the price of the good changes. True/ False
    False
  70. The United States has the lowest Gini ratio of any industrialized nation. True./ False
    False
  71. Which one of the following is an example of a transaction cost?
    A fee of $500 is paid to a lawyer for writing a business contract
  72. Suppose that an individual making $100,000 per year pays $20,000 in total taxes while a person making $30,000 per year pays $6,000 in total taxes. In this example, the tax system is …
    proportional.
  73. The question below refers to the following diagram which illustrates the potential grades Miguel could get on his biology and economics tests based on how much time he devotes to studying each subject. Considering the graph above, which one of the following statements is FALSE?
    Point D is more efficient than point A.
  74. The purpose of the Dan Ariely video "The Truth about Relativity" that examines how people feel about theiir salaires is to illustrate:
    that people's satisfaction with their job depends on how their salary compares to the salaries of their coworkers.
  75. What is the difference between a stock and a flow?
    A flow is measured over time while a stock is measured at a point in time.
  76. An example of a menu cost would be the cost of paying for optional equipment on a new automobile. True/ FalSE
    fALSE
  77. According to the text, the three major macroeconomic goals are …
    good living standards, stability and security, and sustainability.
  78. Which one of the following is an example of a menu cost?
    The cost of changing the prices of items on a store shelf.

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