ECON 104 FINAL EXAM QUESTIONS AND ANSWERS
Best describes personal disposable income - -Income less than personal income taxes
-Kara voluntarily quit her job as an insurance agent to return to school full-time to earn an
MBA degree. With degree in hand she is now searching for a position in management. Kara
presently is: - -Frictionally Unemployed
-Capital Stock - -The maximum number of shares authorized under the terms of a
corporation's articles of incorporation.
-The income of households or individuals after taxes is called - -Personal Disposable
Income
-Ways to calculate GDP: Expenditure Approach - --Personal Consumption (C) + Gross
Private Domestic Investment (Ig) + Spending (G)+ Net Exports (Xn= Exports-Imports
- C + Ig + G + Xn
-Net Exports - -Exports - Imports
-Most economists agree that the immediate cause of most business cycle variation is - -An
unexpected change in the level of total spending
-Inflation - -Prices on average are rising
-In comparing GDP data over a period of years, a difference between nominal and real GDP
may arise because - -The price level may change over time
-In the resource market - -Households sell resources to businesses
-Economic systems differ according to which two main characteristics? - -Who owns the
factors of production, and the methods used to coordinate economic activity
-GDP (Gross Domestic Product) - -Market value of all final goods and services produced
within the borders of a single country in a year
-Characteristics of a Market System - -- Freedom of Enterprise
- Competition in the product and resource market
- Private property
-According to the Bureau of Labor Statistics, to be officially unemployed a person must: - -
Be in the labor force
-A recession is defined as a period in which: - -Real domestic output falls
, -Real GDP refers to: - -GDP data that has been adjusted for changes in the price level
-If intermediate goods and services were included in GDP: - -GDP would be overstated
-NFFI (Not Foreign Factor Income) - -Measures US production abroad minus foreign
production in the US
-How will the market system accommodate change? - -Prices and profits will be signals
-How will the command system accommodate change? - -Not very well
-How will goods and services be produced in a market economy? - -Labor and Capital
-Labor - -Work, manual, or physical work
-Capital - -The wealth, either money or property owned by a company or producer
-How will goods and services be produced in a command economy? - -Government will
decide
-Distinguishing factor in the market system - -Wide-spread ownership of capital
-GDP excludes: - -The market value of unpaid work in the home
-Frictional Unemployment - -- Voluntary, in between jobs
- Historically 3%
-Structural Unemployment - -- Not voluntary, do not have skills necessary for
employment, long term
- Historically 2%
-Cyclical Unemployment - -- Unemployed because economy is weak
- Historically 0% when economy is strong
-Distinguishing feature in a command economy - -Central planning
-Firms are motivated to minimize production costs because: - -Competitive pressures in
the market will drive out higher-cost producers
-Real GDP is: - -The nominal value of all goods and services produced in the domestic
economy corrected for inflation
-GDP can be calculated by summing: - -Consumption, Government Spending, Investments,
and Net Exports
-Transfer payments include: - -- gifts
Best describes personal disposable income - -Income less than personal income taxes
-Kara voluntarily quit her job as an insurance agent to return to school full-time to earn an
MBA degree. With degree in hand she is now searching for a position in management. Kara
presently is: - -Frictionally Unemployed
-Capital Stock - -The maximum number of shares authorized under the terms of a
corporation's articles of incorporation.
-The income of households or individuals after taxes is called - -Personal Disposable
Income
-Ways to calculate GDP: Expenditure Approach - --Personal Consumption (C) + Gross
Private Domestic Investment (Ig) + Spending (G)+ Net Exports (Xn= Exports-Imports
- C + Ig + G + Xn
-Net Exports - -Exports - Imports
-Most economists agree that the immediate cause of most business cycle variation is - -An
unexpected change in the level of total spending
-Inflation - -Prices on average are rising
-In comparing GDP data over a period of years, a difference between nominal and real GDP
may arise because - -The price level may change over time
-In the resource market - -Households sell resources to businesses
-Economic systems differ according to which two main characteristics? - -Who owns the
factors of production, and the methods used to coordinate economic activity
-GDP (Gross Domestic Product) - -Market value of all final goods and services produced
within the borders of a single country in a year
-Characteristics of a Market System - -- Freedom of Enterprise
- Competition in the product and resource market
- Private property
-According to the Bureau of Labor Statistics, to be officially unemployed a person must: - -
Be in the labor force
-A recession is defined as a period in which: - -Real domestic output falls
, -Real GDP refers to: - -GDP data that has been adjusted for changes in the price level
-If intermediate goods and services were included in GDP: - -GDP would be overstated
-NFFI (Not Foreign Factor Income) - -Measures US production abroad minus foreign
production in the US
-How will the market system accommodate change? - -Prices and profits will be signals
-How will the command system accommodate change? - -Not very well
-How will goods and services be produced in a market economy? - -Labor and Capital
-Labor - -Work, manual, or physical work
-Capital - -The wealth, either money or property owned by a company or producer
-How will goods and services be produced in a command economy? - -Government will
decide
-Distinguishing factor in the market system - -Wide-spread ownership of capital
-GDP excludes: - -The market value of unpaid work in the home
-Frictional Unemployment - -- Voluntary, in between jobs
- Historically 3%
-Structural Unemployment - -- Not voluntary, do not have skills necessary for
employment, long term
- Historically 2%
-Cyclical Unemployment - -- Unemployed because economy is weak
- Historically 0% when economy is strong
-Distinguishing feature in a command economy - -Central planning
-Firms are motivated to minimize production costs because: - -Competitive pressures in
the market will drive out higher-cost producers
-Real GDP is: - -The nominal value of all goods and services produced in the domestic
economy corrected for inflation
-GDP can be calculated by summing: - -Consumption, Government Spending, Investments,
and Net Exports
-Transfer payments include: - -- gifts
