ECON 2030 Chapter Notes - Chapter 24-29: Open Market Operation, Government Spending, Monetary Base

1.Since the minimum wage rate began it has typically stayed at about what percentage of the average manufacturing wage?

Select one: a. 75-80 % b. 40-50 % c. 20-30 % d. 10-20 %

2.Suppose there are 100 million in the labor force, and 6 million unemployed people.

During the next month, 200,000 people lose their jobs and 300,000 find jobs. The new total of employed is ________ and the new unemployment rate is ________.

Select one:

a. 100.1 million; 5.8 percent.

b. 93.9 million; 6.1 percent.

c. 94.1 million; 5.9 percent.

d. 100 million; 6.1 percent.

3.In a small country, the adult population equals 10,000. There are 3,000 people unemployed and 4,000 people are employed. The labor force participation rate equals

Select one:

a. 70 percent.

b. 40 percent.

c. 57 percent.

d. an undetermined amount given the lack of information.

4.The population of individuals at least 16 years of age can be broken into 3 groups. They are

Select one:

a. those working in the for-profit sector, those working in the nonprofit sector, and unemployed individuals.

b. the unemployed, discouraged workers, and retirees.

c. those employed full-time, those employed only part-time, and the unemployed.

d. None of these.

5.During the Great Depression,

Select one:

An a. most people who couldn't find work left the labor force, so the official unemployment rate remained low.

b. the U.S. unemployment rate reached its historical highest.

c. unemployment statistics were not collected.

d. the unemployment rate was not unusually high, but wage levels were low.

6.The term "market basket" means a

Select one:

a. collection of goods that changes every year and is defined by Congress.

b. collection of goods that can fit into an average shopping cart.

c. collection of goods that is used by a typical family.

d. collection of goods that are purchased during the holiday season.

7.A price index is the

Select one:

a. cost of a market basket of goods today.

b. cost of a market basket of goods and services a year ago is expressed as a percentage of the cost of the same market basket today.

c. year that is chosen as the point of reference for comparison of prices in other years.

d. cost of a market basket of goods and services today expressed as a percentage of the cost of the same market basket during a base year.

8.Which of the following does NOT cause a rightward shift in the supply curve?

Select one:

a. a reduction in resource costs

b. an increase in technology

c. a reduction in the expected future price of the good

d. a reduction in the price of the good

9.Which of the following is a possible outcome of setting a legal maximum rental rate below the market-clearing rental rate?

Select one:

a. a decrease in the quantity of rental housing demanded

b. an increase in the quantity of rental housing supply

c. a black market in rental housing

d. a surplus of rental housing

10.Rent controls primarily benefit

Select one:

a. people looking for rental units.

b. builders.

c. property owners.

d. people who already occupy rental units.

11.Of the following groups, which benefits most from a government price support program that establishes a floor price for an agricultural product that is higher than the product's market-clearing price?

Select one:

a. Consumers, who purchase more units of the product than they did before the price support program was implemented

b. Taxpayers, who no longer must provide funds to purchase surplus units of the product once the price support program is in place

c. The government, which receives subsidy payments from producers that are required to sell more of the product at a higher price under the government's program

d. Producers, who earn a higher price on the sale of each unit and also sell more units, thereby unambiguously earning higher revenues

Question 3

According to Joseph Schumpeter, the theory of creative destruction describes a process by which

Question 4

Which of the following countries had the highest GDP per capita in 2012?

Question 5

________ save a ________ of their income. This ________ capital in their economy and raises economic growth.

Question 6

The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.

A

Question 7

The U.S. economy has been more stable since 1950.

True

False

Question 8

When the economy reaches a trough in a business cycle, which of the following will occur?

Question 9

In a closed economy, what is the relationship between saving and investment?

Question 10

The per-worker production function shows the relationship between ________ per hour worked and ________ per hour worked, holding ________ constant.

Question 11

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Question 12

Which of the following is not a reason why the Industrial Revolution occurred when and where it did?

Question 13

Growth in real GDP per capita for the world economy was greatest during

Question 14

Which of the following is a normative statement about economic growth?

Question 15

The effect of a recession on a company like Whirlpool Corporation is such that

Question 16

For the recessions in the United States since the 1950s,

Question 17

You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?

Question 18

In comparison to a government that runs a balanced budget, when the government runs a budget deficit,

Question 19

If labor productivity growth slows down in a country, this means that the growth rate in ________ has declined.

Question 20

Policies to promote growth by increasing saving and investment work through