Exam 5: Introduction to Macroeconomics

Which of the following correctly lists the sequence of stages in the business cycle?

Business cycles:

Unemployment tends to be highest during the _____ stage of the business cycle while there is a greater risk of high demand leading to inflation during the _____ stage of the business cycle.

(Table) According to the table, what is this country's GDP? Personal consumption expenditures \ 900 Personal taxes \ 180 Government expenditures \ 300 Exports \ 40 Imports \ 75 Interest income \ 60 Depreciation \ 50 Gross private domestic investment \ 200

A disadvantage of using per capita GDP to measure the standard of living in a country is that it does not accurately reflect the differences in wealth between rich citizens and poor citizens in the same country.

Whose analysis serves as the foundation of modern macroeconomics?

The circular flow diagram shows that the sum of the resource market and the product market must equal the total payments going to the business market.

For which of the following situations would the yield curve most likely predict that a recession will occur?

Econoland and Macroland are neighboring countries. Which of the following would be included in the GNP of Econoland but not in Econoland's GDP?

The informal economy in the United States is approximately 40% of GDP.

Joyce is an accountant. Sarah, her hair stylist, cuts and perms her hair in exchange for having her taxes done. This is an example of an economic transaction that is not included in the national income and product accounts.

Which component is the smallest part of U.S. GDP?

Karl's Keychain Company produces keychains that sell for $1 each. On January 1, 2015, the company had inventory of 8,000 keychains. During 2015, the company sold 900,000 keychains. At the end of the business year on December 31, 2015, the company's inventory of keychains was 9,000. What was the value of Karl's total production and inventory investment in 2015?

The phases of the business cycle vary in duration and intensity.

Gross private domestic investment, which consists of _____ and changes in private inventories, is an important determinant of _____.

Which of the following is NOT an investment in human capital?

One criticism of the National Bureau of Economic Research's process of dating business cycle turning points is that the methodology is not clearly known by the general public.

An advantage of using GDP per capita to measure the standard of living in a country is that it declines if economic growth results in deterioration of the environment.

John Maynard Keynes devised the framework for developing policies to avoid future severe macroeconomic downturns.

A(n) _____ in the business cycle usually means the economy is operating at its capacity.