Recent Question

What effect would a higher savings rate have on the recession 1. "Under present circumstances there is such a thing as a 'free lunch'. In effect, all of the ingredients of that lunch are already there - the people who want to work, the factories and equipment standing idle, and the raw materials not being used. It is just a question of injecting a little spending power to prevent the free lunch from going to waste." What would happen if t ...

Other / Other 07 May 2016

Which of the following will be added to GDP as conventionally calculated 1. A reduction in inventory is a) not considered in the national income accounts b) entered as positive investment in the national accounts c) entered as negative investment in the national accounts d) entered as a depreciation item in the national accounts 2. Which of the following is counted as investment in national income accounting? a) building a n ...

Other / Other 07 May 2016

The reduction in the unemployment rate which is projected to take place 1. "In fairness, the strong female job growth occurred partly because so many more women were available to work. The female participation rate rose to 55 percent from just 45 percent a decade earlier." The female participation rate is a) one minus the male participation rate b) the fraction of the labor force that is female c) the number of females employed expres ...

Other / Other 07 May 2016

What is meant by "statistical invisibility" 1. "Almost all of the fourth quarter increase in GDP wound up as unsold inventory sitting on shelves." If it doesn't get sold, how could it get counted into GDP? a) it is added when measuring GDP, as an element of investment demand b) it is added when measuring GDP, as an element of consumption demand c) it is subtracted when measuring GDP, as an element of investment demand 2 d) it is ...

Other / Other 07 May 2016

A forest worker who is out of work because of low demand 1. The unemployment rate fell despite 190,000 fewer jobs. This could be because of a) fewer teenagers looking for jobs b) an increase in structural unemployment c) more women entering the labour market d) elderly coming out of retirement to work in the service sector 2. A forest worker who is out of work because of low demand for lumber is said to be a) cyclically unemploy ...

Other / Other 07 May 2016

Because pollution is a byproduct of many production processes . If the typical market basket of goods and services cost $400 in 1995, and the price index (base year 1992) for 1995 is 120, then if this same typical bundle cost $420 in 1996, the price index in 1996 would be a) 120 or below b) between 120 and 125 c) 125 d) above 125 2. "The economists who set up GDP also established a number of rather arbitrary conventions to distinguish ...

Other / Other 07 May 2016

Requiring a balanced budget would be destabilizing 1. "When the news of Wednesday's numbers on GDP was made public, stocks and bonds immediately rose and the U.S. dollar strengthened. Then, when analysis of the numbers came in, the markets went into reverse. The reason was that the greater part of 16 the improvement in the quarter - $33.7 billion out of a total GDP advance of $39.2 billion - came from additions to business inventories." ...

Other / Other 07 May 2016

The unemployment rate could increase despite the number of jobs remaining steady 1. “Federal government changes to the employment insurance program have caused the Atlantic region to suffer from two conflicting problems simultaneously – high unemployment and a labor shortage.” This paradoxical situation could come about because the employment hours required for benefit eligibility were ________ and unemployment benefits ...

Other / Other 07 May 2016

As a result of this policy the budget deficit will become Consider an economy in which the current level of income is $600b, "the" multiplier is 4, the marginal tax rate is 20%, the current budget deficit is $30b. 1. To increase income to $650b we require an increase in government spending of less than $10b b) between $10b and $15b c) between $15b and $20b d) over $20b 2. As a result of this policy the budget deficit will beco ...

Other / Other 07 May 2016

The Commerce department announced that it is shifting from 1987 to 1992 "The Commerce department announced that it is shifting from 1987 to 1992 as the base year for calculating the nation's real GDP and price index." 1. In the new official figures, compared to the old official figures, the 1987 number for real GDP is a) smaller b) unchanged c) larger d) not enough information to tell 2. In the new official figures, compared to the ...

Other / Other 07 May 2016