econ final (part 2)

An american citizen purchases a Toyota automobile that was produced entirely in Japan. She pays $50,000 at a local retailer in Orange County, How is it recorded in the U.S. national accounts?

GDP remains unchanged. Consumption increases by $50,000. Net exports decreases by $50,000.

The share of personal consumption expenditures in gross domestic product in the United States over the last decade is typically

Between 60% and 80%.

The CPI tends to overstate true changes in the cost of living for which of the following reasons?

I. The index does not take into account a change in quality.

II. Consumers substitute one good for another as prices change.

III. The CPI includes only domestically produced goods.

IV. Consumers often buy at discount rather than retail.

I, II, IV only.

Historical rates of return on Treasury bills and common stocks over the past 30 years show:

Common stocks had a lower average return and less risk than Treasuries.

Common stocks had a lower average return and more risk than Treasuries.

Common stocks had a higher average return and more risk than Treasuries.

Job losses in the manufacturing sector amounted to one million, yet the unemployment rate remained stable at 1%. This would be consistent with:

An even greater increase in the labor force

Which of the following best describes the cause-effect chain of an expansionary monetary policy?

An increase in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and output.

Which of the following policy options would simultaneously increase interest rates and decrease output?

The Federal Reserve Board sells bonds through open market operations.

The objective of an expansionary fiscal policy is to:

reduce the rate of unemployment.

An Increase in inflation expectations shifts the short-run Phillips curve:

upwards

According to standard economic theory, which of the following is true:

Tariffs raise the price of imported products. allowing domestic manufacturers to charge higher prices.

Select the closest values. For the period January-December 2024 4ha U.S. economy was characterized

a national unemployment rate at 4% and annual consumer price inflation at 3%.

Question 12

Select the closest values. For the period January-December 2024, the U.S. economy was characterized by (as a percent of GDP):

a trade balance of -3% and national (public sector) debt of 60%

nominal gdp

sum of all (price x quantity)

midpoint formula (percentage change)

(new-old)/((new+old)/2) x 100

inflation

too much money chasing too few goods

short run vs long run

s: prices and wages are sticky

l: economy returns to full employment output

unemployment

• frictional

• structural

• cyclical

  • natural rate = frictional+structural

strong dollar

more imports, fewer exports