Macroeconomics Questions
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According to research by Rafael La Porta of Tuck School of Business at Dartmouth and Andrei Shleifer of Harvard University, in developing countries, the average firm in the informal sector, or underground economy, employs 4 workers as opposed to 126 workers employed by the average firm in the formal sector.Sources: Rafael La Porta and Andrei Shleifer, "Informality and Development," Journal of Economic Perspectives, Vol. 28, No. 3, Summer 2014, pp. 109-126.What is the informal sector, or underground economy?A.This is the part of the economy where production is heavily taxed by the government.B.This is the part of the economy characterized by the pollution and other negative externalities its production creates.C.The informal sector, or underground economy, is when production occurs in other countries.D.The informal sector is the sector of the economy where production is concealed from the government.
Which of the following demographic groups has a higher rate of unemployment than the unemployment rate for the total population?A.whitesB.college graduatesC.asiansD.high school dropouts
Relative to the household survey, which of the following is a strength of the establishment survey?A.The establishment survey provides better information on the number of persons self-employed than the household survey.B.The establishment survey is determined by actual payrolls, rather than by the unverified answers of the household survey.C.The establishment survey provides information on unemployment, which the household survey does not provide.D.All of the above.
Why would we expect firms in the informal sector to be so much smaller than firms in the formal sector?A.Workers in the informal sector earn higher wages than those in the formal sector.B.Firms in the informal sector rely more on machinery to produce their goods and services than those in the formal sector.C.Because these firms are operating illegally, they earn higher profits than firms operating legally, which allows them to remain small.D.Because firms in the informal sector are operating illegally, they have less capital than firms operating legally.
Gross domestic product is best defined asA.the total quantity of goods and services produced in a country during a period of time.B.the market value of all final goods and services produced in a country during a period of time, typically one year.C.the total value of all goods that can be found in a country.D.the amount of all incomes earned by all citizens of a country, including those living overseas.
How does the size of a country's GDP affect the quality of life of the country's people?A.When GDP is high, production from the underground economy, and therefore the crime rate, is high.B.There is an inverse relationship between GDP and quality of life.C.Generally, the more goods and services people have, the worse off they are.D.Generally, the more goods and services people have, the better off they are.
An article on bloomberg.com stated that "inventories gave GDP a small boost."Source: Katia Dmitrieva, "U.S. GDP Grows at 2.6% Pace as Business Spending Accelerates," bloomberg.com, February 28, 2019.For this result to occur, is it likely that inventories increased or decreased? Briefly explain.A.Increased, since inventories are part of a firm's investment, which is a component of GDP, inventories must have risen.B.Increased, because firms earned profits on their inventories, which would raise inventory investment.C.Decreased, because inventories represent goods that firms did not sell, indicating a loss to inventory investment.D.This cannot be determined since there is no direct relationship between inventory changes and GDP growth.
What is value added and how is it calculated?Value added refers toA.the additional market value a firm gives to a product and is calculated as the difference between the sale price and the price of intermediate goods.B.the additional market value a firm gives to a product and is calculated as the difference between the total production cost and the price of intermediate goods.C.the profit a firm receives for its product and is calculated as the difference between total revenue and total cost.D.the profit a firm receives for its product and is calculated as the difference between the sale price and the price of intermediate goods.
Why qualify the statement about GDP as a summary statistic by including the phrase "or seems to"?A.As a summary statistic, GDP places too much emphasis on the negative effects of crime, pollution, or other social problems.B.As a summary statistic, GDP overlooks some areas of production that take place in an economy.C.As a summary statistic, GDP tends to focus more on measuring individuals' well-being rather than measuring an economy's total production.D.As a summary statistic, GDP overstates production by including the value of goods produced illegally.
In an economy with rising prices, compared to the base year,A.nominal GDP is equal to real GDP in years after the base year.B.nominal GDP is larger than real GDP in years after the base year.C.nominal GDP is equal to real GDP in years before the base year.D.nominal GDP is larger than real GDP in years before the base year.
The difference between the price the firm sells a good for and the price the firm paid other firms for intermediate goods is called: A.fixed investment.B.producer surplus.C.profit.D.value added.
Suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton. Further, assume that all of the cotton is used in the production of shirts.Use the information in the following table to calculate Nominal Gross Domestic ProductLOADING... (Nominal GDP) for 2021.PRODUCTION AND PRICE STATISTICS FOR 2021ProductQuantityPriceShoes125$65.00Hamburgers1103.00Shirts6030.00Cotton2,200
Why might the unemployment rate continue to rise during the early stages of a recovery?A.Employment growth may be slow relative to the growth in the labor force.B.The number of discouraged workers may continue to increase.C.Some firms continue to operate well below their capacity even after a recession has ended.D.Because both (a) and (c) are true.
What happens when expercted rate of return equals or exceeds real interest rate
What is the most volatile component of total spending?
what causes most fluctuations in output and employment?
what happens to APC and APS when disposable income increases
Through what can an initial change in investment spending cause a magnified change in domestic output and income?
If your annual money income rises by 50% while the prices of things you buy rise by 100% then your...- Real income has fallen- Real income has risen- Money income has fallen- Real income is not affected
what does the size of the multiplier in the US estimate to