Macroeconomics Theory and Practice

BAMM 6101 Macroeconomics Theory and Practice 

______ Latin term that used in economics means all other non-price factors that affect the amount we consume or produce do not change.	Ceteris Paribus Correct
________ represent a cost to not only individuals but also the macro economy or reduce overall economic efficiency in that they represent an unnecessary cost of transforming resources into final goods and services.	Menu costs Correct
_________ is a very small increase of decrease in the quantity of some variable.	Marginal change Correct
_________ is the level of output at which the labor market is at its natural rate of unemployment.	Full Employment Output Correct
_________ represents a combination of percentage change and marginal analysis.	Elasticity Correct
__________ a variable that depends on the value of the independent variable(s) can be seen in the left side of the equation.	Dependent variable Correct
__________ is also referred to as a direct relationship. As the value of X increases, the value of Y increases.	Positive Correct
__________ is an advantage of a person who can produce a good or service with fewer resources than another person.	Absolute Correct
__________ is described as a fixed-weight price index (also referred to as a Laspeyres price index), which measures the cost of a fixed basket of goods relative to a base period	CPI or Consumer Price Index Correct
__________ is when many suppliers and many consumers engaged in trade without interference from government.	Competitive Free Market Correct
__________ Unemployment is associated with business cycles and, more particularly, with temporary downturns in the economy	Cynical Correct
___________  (Number Unemployed / Labor Force) *	Unemployment Rate Correct
___________ Labor Force / Civilian Non institutional Population *	Participation Rate Correct
___________ a legal requirement that maintains the market price above the equilibrium price.	Price Floor Correct
___________ as the price of a good or service increases the quantity you would be willing and able	Law of Supply Correct
___________ is a legal requirement that maintains the market price below the equilibrium price.	Price Ceiling Correct
___________ is a term used to denote a very high rate of inflation.	Hyperinflation Correct
___________ is also known as the Implicit GDP Deflator or Implicit Price	GDP Deflator Correct
___________ is nominal wage corrected for the average level of prices.	Real wage Correct
___________ is the amount of labor demanded by firms at a given real wage rate.	Labor Demand Curve Correct
___________ relates to the effect that a small or unit change one variable has on another variable.	Marginal analysis Correct
____________ a graph that indicates all possible combinations of two goods or services that can be produced within an economy given the full and efficient use of all available resources.	Production Possibilities curve Correct
____________ is when we specialize and both benefit after the exchange	Positive sum game Correct
_____________ unemployment arising from frictional, structural, and seasonal unemployment, further as described as the unemployment rate that coexists with macroeconomic stability.	Natural Rate of Unemployment Correct
______________ - average output per hour of labor (e.g., total real GDP divided by the total number of labor-hours worked)	Productivity Correct
______________ is a movement along a fixed supply curve in response to a change in the price of that good, ceteris paribus (everything else unchanged).	Change on Quantity Supplied Correct
______________ is the characteristic of money or currency where it can be used as a medium of exchange for any good or service.	General Purchasing Power Correct
__________________ - the market value of final goods and services (i.e., sold to final	Nominal Gross Domestic Product (GDP) Correct
_____________________- the market value of final goods and services produced by labor and property supplied by the residents of a nation during a specific period, usually  year.	Nominal Gross National Product (GNP) Correct
____________________the amount by which the value of a firm's finished products exceeds the value of goods and services the firm purchases	Value Added Correct
____________consists of transactions that are not documented for various reasons.	Underground economy Correct
___________, as more scarce resources are used to increase production of one good or service, production of another good or service falls by larger and larger amount.	Increase Opportunity Cost Correct
___________if a person can produce a good or service with lower opportunity cost than can another	Comparative advantage Correct
___________is the amount that the quantity demanded exceeds the quantity supplied when the market price is below the equilibrium price.	Shortage Correct
___________is the quantity of goods and services that can be purchased with a given amount of money; the value of money	Purchasing Power Correct
__________- percentage rate of increase in the price index per period.	Inflation Rate Correct
__________as the price of a good or services increases, the quantity you would be willing and able to purchase during some period of time declines.	Law of Demand Correct
__________as the shift of the supply curve in response to a change in one of the variables assumed to be held constant under the ceteris paribus assumption (e.g., technology), holding the good's price constant.	Change in Supply Correct
__________is the amount that the quantity supplied exceeds the quantity demanded when the market price is above the equilibrium price.	Surplus Correct
__________is the measure of the average level of prices for some specified bundle of goods and services, relative to the prices in a specified base year	Price Index Correct
__________is the price at which the quantity demanded is equal to the quantity supplied. Other things being unchanged, there is no tendency for this price to change.	Equilibrium Price Correct
A _______ is the opposite situation of a price ceiling.	Price floor Correct
A _______is a collection of suppliers and consumers engaged in trade.	Market Correct
A legal requirement that maintains the market price below the equilibrium price.	Price Ceiling Correct
A line showing X and Y pair is referred as ____________.	Curve Correct
A market is in _______ when the quantity demanded is equal to quantity supplied at the market price.	Equilibrium Correct
A market is in ______________ when the quantity demand is equal to quantity supplied at the market price.	Equilibrium Correct
A period of decline in total output, income, employment, and trade, usually lasting from six months to a year.	Recession Correct
A recession that is major both in scale and duration.	Depression Correct
A shift of the demand curve in response to a change in one of the variables assumed to be held constant under the ceteris paribus assumption (e.g., income), holding the good's price constant.	Change in Demand Correct
According to __________, that if more of the time is spent in one activity then you must invest your resources to develop specialized tools or machines to aid me in my task.	Smith Correct
Accurately describes historical outcomes, and It must make reasonable predictions about the results of future observations.	Good Economic Model Correct
An increase in income leads to a decrease in demand (the demand curve shifts to the left).	Inferior Good Correct
An increase in income leads to an increase in demand (the demand curve shifts to the right).	Normal Good Correct
Analysis of the behavior of an economy as a whole.	Macroeconomics Correct
Analysis of the behavior of individual decision-making units (individuals, households, firms).	Microeconomics Correct
Another problem with the unemployment rate as a measure of overall labor activity is that the employed may not be working as much as they would like	TRUE Correct
Cartesian coordinate system is not the usual graphical representation.	FALSE Correct
Ceteris paribus, means	Other things being equal Correct
Civilian Non institutional Population - persons  years of age and older who are not inmates of institutions	TRUE Correct
Common characteristics in each of the relationship of two variables is that the change in independent variable X produces a change in dependent variable Y and represented in a math equation.	TRUE Correct
Compute the opportunity cost , where  mobile phones is to  Simcards.	The correct answers are: _________ simcard., / Correct
Consumer Price Index (CPI) includes	Imports Correct
Consumer Price Index	Only goods and services purchased by households included Quantities fixed (the market basket) Imports (of consumer goods) included.
TRUE Correct
consumers) produced by a nation during a specific period, usually  year.	consumers) produced by a nation during a specific period, usually  year. Correct
Cost-Push Inflation - caused by an increase in the costs of production of goods and services.	TRUE Correct
Deflation	Decrease in average level of prices
TRUE Correct
Deflation Rate	Price Index Year  - Price Index Year  /Price Index Year  *
FALSE Correct
Demand-Pull Inflation - caused by an increase in aggregate demand for goods and services.	TRUE Correct
Economic growth is	The change in the physical output of an economy, typically measured as the change in Real GDP. Correct
GDP Deflator	Nominal (current-dollar) GDP /Real (constant-dollar) GDP *
TRUE Correct
GDP Deflator	Nominal GDP/Real GDP x
TRUE Correct
GDP Per Capita	Total GDP/Total Population Correct
Goods and services those are scarce. There is an opportunity cost involved in their use or consumption.	Economic Goods and Services Correct
Hyperinflation is generally caused by governments printing money to finance large fiscal deficits caused by wars, revolutions, the establishment of new states, or exorbitant social programs.	TRUE Correct
In Demand Curve Shifts, a change in any of these will cause the demand to curve shift to the right or left, when the demand curve is shifting to the right. The rightward shift is called ___________________.	Increase in demand Correct
Independent variable can be seen in the _______________ of the equation.	Right Correct
Intangible but useful activities that are valued by people.	Services Correct
Is the number of unemployed individuals divided by the total of those employed and unemployed total labor force.	Unemployment Rate Correct
Labor is a service that is supplied by individuals and demanded by firms.	TRUE Correct
Law of Demand Ceterus Paribus	Everything else unchanged Correct
Macroeconomics is analysis of the behavior of an economy as a nation.	TRUE Correct
Microeconomic demand and supply curves depend on differences in ________ prices	Relative Correct
Net Domestic Product (NDP)	C + In + G + NX
GDP - depreciation	TRUE Correct
One of the Macroeconomic objectives is to develop better laws and government policies to maximize welfare of the society.	TRUE Correct
Percent Change in (P x Q)	(Percent Change in P) + (Percent Change in Q)
TRUE Correct
Percent Change in (Q/L)	(Percent Change in Q) - (Percent Change in P).
FALSE Correct
Percentage decline in the average level of prices.	Deflation Rate Correct
Percentage increase in the average level of prices.	Inflation Rate Correct
Percentage of Change	ending value- starting value /starting value x .
TRUE Correct
Political Science is the study of mankind in the ordinary business of life.	FALSE Correct
Price Index	current-year total cost of market basket of goods and services / base-year total cost of market basket of goods and services
TRUE Correct
Production Costs	opportunity costs of resources required (e.g., cash costs) to change prices.
FALSE Correct
Quantity of goods and services that can be purchased with a given amount of money.	Purchasing Power Correct
Real GDP - value of total output corrected for any changes in prices. Also referred to as "constant-dollar" GDP.	TRUE Correct
Real GDP is reported quarterly by the Bureau of Economic Analysis	Real GDP is reported quarterly by the Bureau of Economic Analysis Correct
Recession is	A period of decline in total output, income, employment, and trade, usually lasting from six months to a year. Correct
Recurrent, systematic fluctuations in the level of business activity, often characterized by changes in growth rate of real GDP.	Business Cycle Correct
Structural Unemployment - dynamic labor force in a stable economy with imperfect information.	FALSE Correct
Tangible things that satisfy people's wants and desires.	Goods Correct
The _______ is a graphic representation of the market demand schedule and the Law of Demand	Demand curve Correct
The __________ is a graphic representation of the market supply schedule and the Law of Supply	Supply curve Correct
The fundamental method of exchange is ____________.	Barter Correct
The GDP Deflator is described as a variable-weight price index (also referred to as a Paasche price index)	TRUE Correct
The market interest rate that is paid by borrowers to lenders.	Nominal Interest Rate Correct
The market value of final goods and services (i.e., sold to final consumers) produced by a nation during a specific period, usually  year.	Nominal Gross Domestic Product (GDP) Correct
The market value of final goods and services produced by labor and property supplied by the residents of a nation during a specific period, usually  year.	Nominal Gross National Product (GNP) Correct
The point where the curve crosses the vertical axis is referred as ____________.	Intercept Correct
The production possibilities curve is often referred to as a ___________.	Frontier Correct
The test of a proposition or theory using actual observations or numbers is	Empirical Study Correct
The test of a proposition or theory using actual observations or numbers is called _______.	Empirical Study Correct
Things that are available in sufficient amounts to satisfy all possible needs. There is no opportunity cost involved in their use or consumption.	Free Goods Correct
Transfer Payment - a payment made for which no goods or services are provided in return. Transfer payments are excluded from _______.	GDP Correct
Understanding measures of Elasticity is critically important in Microeconomics, references to Elasticities are infrequent in Macroeconomics	TRUE Correct
Unemployment Rate (percent)	Unemployed/Total Labor Force *
TRUE Correct
We can represent a single person's decision about how many items to purchase over a year in a table called a _______.	Demand schedule Correct
What approach that measures total economic activity by adding the amount spent by allultimate or final consumers of products and service?	Expenditure approach Correct
What do you call the hours (not rendered) beyond government mandated  hour work week	Leisure time Correct
What is the value of total output (nominal GDP) corrected for any changes in prices.	Real GDP Correct
What kind of resources in which examples are petroleum, natural gas, coal, and nonfuelminerals extracted from the ground is included in GDP in the products produced from them	Non Renewable Natural Resources Correct
When many suppliers and many consumers (competitive) engaged in trade without interference from government (free).	Competitive Free Market Correct
When the amount that the quantity demanded exceeds the quantity supplied when the market price is below the equilibrium price.	Shortage Correct
When the amount that the quantity supplied exceeds the quantity demanded when the market price is above the equilibrium price	Surplus Correct
When the average level of prices declines, this is called _________.	Deflation Correct
When the average level of prices increases over time the economy is said to be experiencing _______________.	Inflation Correct
When the government increases money supply faster than the economy is growing you generally end up with deflation.	FALSE Correct
When the price of resources in the production process increases, firms try to pass on these increases to the product price this is called ________.	Pushed Prices Correct