In order to build a table, a furniture company buys $50 worth of wood from a lumber
company and $20 worth of hardware from a metal products firm. If the value added by
the furniture company is $200, what price would the table sell for according to the
value added approach to GDP?
a. $130
b. $150
c. $180
d. $200
e. $270
If actual output is greater than the full-employment level of output, we should expect
wages to increase over time.
Which of the following goods is likely to have the most price inelastic demand?
If the elasticity of demand is much greater than the elasticity of supply, a subsidy
awarded to demanders will
Figure 7-2 shows how much a firm could produce with various amounts of labor
holding capital and technology constant. What is the average product of labor when 20
units of labor are employed?
Comparing the median income of all white males to the median income of all black
males in order to determine the impact of job-market discrimination on earnings tends
to
If the interest rate increases due to an increase in government purchases, the rise in real
GDP will be greater than what would have occurred if the interest rate had remained
stable.
Open market sales of bonds by the Federal Reserve reduce the money supply and
a. reduce aggregate expenditures
b. increase real aggregate expenditures
c. are helpful in monetizing the federal debt
d. stimulate purchases of consumer durables
e. stimulate spending at many levels
In the long run,
The wage premium for the average college graduate (vs. the average high school
graduate) has gone up significantly in recent years.
The 2008-2009 recession began as oil prices increased, and then was followed by a
negative demand shock..
The existence of recessions highlights
a. the strengths of the Federal Reserve
b. the need for the “other things equal” assumption
c. our failure to consider differences between the short run and long run
d. how confusing the economy can become
e. the interdependence between production and income
If you divide nominal debt by nominal GDP and real debt by real GDP, you will get two
different answers.