7 True or False.docx

1、7 True or FalseChapter217 True or False1) When IBM, an American firm, produces computer chips in another country, this production is not included in U.S. GDP because the production did not take place in the United States.Answer: TRUETopic: Gross Domestic ProductSkill: ConceptualAACSB: Reflective Thi

2、nking2) The circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services.Answer: FALSETopic: Circular FlowSkill: ConceptualAACSB: Reflective Thinking3) The circular flow diagram shows only the aggreg

3、ate expenditures measure of GDP.Answer: FALSETopic: Circular Flow, Aggregate ExpendituresSkill: ConceptualAACSB: Reflective Thinking4) The circular flow shows that aggregate spending is than aggregate income because people save.Answer: FALSETopic: Expenditure Equals IncomeSkill: ConceptualAACSB: Ref

4、lective Thinking5) When gross investment is greater than depreciation, then the nations capital stock increased.Answer: TRUETopic: Capital and InvestmentSkill: AnalyticalAACSB: Reflective Thinking6) Net investment equals gross investment minus depreciation.Answer: TRUETopic: Net InvestmentSkill: Rec

5、ognitionAACSB: Reflective Thinking7) If depreciation exceeds gross investment, net investment is negative.Answer: TRUETopic: Net InvestmentSkill: ConceptualAACSB: Reflective Thinking8) The expenditure approach to measuring GDP includes firms spending on wages.Answer: FALSETopic: Expenditure Approach

6、Skill: RecognitionAACSB: Reflective Thinking9) Intermediate goods and services are one of the largest components of the expenditure approach to measuring GDP.Answer: FALSETopic: Expenditure ApproachSkill: RecognitionAACSB: Reflective Thinking10) To calculate GDP using the expenditure approach, in pa

7、rt it is necessary to add exports and subtract imports.Answer: TRUETopic: Expenditure Approach, Net ExportsSkill: RecognitionAACSB: Reflective Thinking11) To calculate GDP when using the income approach, you must add indirect business taxes and depreciation.Answer: TRUETopic: Income ApproachSkill: C

8、onceptualAACSB: Reflective Thinking12) The largest component of income is proprietors income.Answer: FALSETopic: Income Approach, Compensation of EmployeesSkill: RecognitionAACSB: Reflective Thinking13) A productivity growth slowdown can be shown as year-to-year fluctuations of real GDP around poten

9、tial GDP.Answer: FALSETopic: Productivity Growth SlowdownSkill: ConceptualAACSB: Reflective Thinking14) Real GDP fluctuates from year to year but is always below potential GDP.Answer: FALSETopic: Real and Potential GDPSkill: RecognitionAACSB: Reflective Thinking15) A business cycle is the pattern of

10、 short-run upward and downward movements in production and jobs.Answer: TRUETopic: Business CycleSkill: RecognitionAACSB: Reflective Thinking16) Phases and turning points of the business cycle are expansion, peak, recession and trough.Answer: TRUETopic: Business CycleSkill: RecognitionAACSB: Reflect

11、ive Thinking17) The business cycle progresses from an expansion to a peak to a recession and then to a trough.Answer: TRUETopic: Business CycleSkill: RecognitionAACSB: Reflective Thinking18) A recession occurs when real GDP decreases for at least 6 months.Answer: TRUETopic: Business CycleSkill: Reco

12、gnitionAACSB: Reflective Thinking19) An expansion ends when the economy hits a trough and then enters a recession.Answer: FALSETopic: Business CycleSkill: RecognitionAACSB: Reflective Thinking20) To measure economic welfare, one needs only to measure real GDP.Answer: FALSETopic: Economic WelfareSkil

13、l: ConceptualAACSB: Reflective Thinking21) The omission of household production causes actual economic production to be underestimated.Answer: TRUETopic: GDP and Household ProductionSkill: ConceptualAACSB: Reflective Thinking22) Household production is not measured in the GDP.Answer: TRUETopic: Hous

14、ehold ProductionSkill: RecognitionAACSB: Reflective Thinking23) All economic activity in the underground economy represents the production of illegal goods and services.Answer: FALSETopic: GDP and Underground Economic ActivitySkill: RecognitionAACSB: Reflective Thinking24) The underground economy me

15、ans that GDP will overstate the actual level of economic welfare.Answer: FALSETopic: GDP and Underground Economic ActivitySkill: ConceptualAACSB: Reflective Thinking25) If a measure of real GDP could include the value of leisure time, measured real GDP would increase.Answer: TRUETopic: GDP and Leisu

16、re TimeSkill: ConceptualAACSB: Reflective Thinking26) The fact that prices for similar goods differ across nations complicates comparisons of real GDP across countries.Answer: TRUETopic: GDP and Purchasing Power Parity PricesSkill: ConceptualAACSB: Reflective ThinkingChapter227 True or False1) The w

17、orking-age population is divided between those people in the labor force and those people unemployed.Answer: FALSETopic: Population SurveySkill: RecognitionAACSB: Reflective Thinking2) One way to be considered unemployed is to be without a job and looking for work.Answer: TRUETopic: Population Surve

18、ySkill: RecognitionAACSB: Reflective Thinking3) The labor force is the sum of the working-age population and the number of unemployed people.Answer: FALSETopic: Population SurveySkill: ConceptualAACSB: Reflective Thinking4) The unemployment rate equals (the number of people unemployed)/(the populati

19、on) 100.Answer: FALSETopic: Unemployment RateSkill: RecognitionAACSB: Reflective Thinking5) The unemployment rate measures the percentage of the working-age population who cant find a job.Answer: FALSETopic: Unemployment RateSkill: ConceptualAACSB: Reflective Thinking6) The unemployment rate measure

20、s the percentage of people in the labor force who cant find a job.Answer: TRUETopic: Unemployment RateSkill: ConceptualAACSB: Reflective Thinking7) Aggregate hours has an upward trend over the last 30 years.Answer: TRUETopic: Aggregate HoursSkill: RecognitionAACSB: Reflective Thinking8) If aggregate

21、 hours worked grows more slowly than the number of people employed then people are working fewer hours on average.Answer: TRUETopic: Aggregate HoursSkill: ConceptualAACSB: Reflective Thinking9) The number of job leavers varies quite a bit over business cycle.Answer: FALSETopic: The Sources of Unempl

22、oymentSkill: ConceptualAACSB: Reflective Thinking10) The duration of unemployment is long when the unemployment rate is low.Answer: FALSETopic: Duration of UnemploymentSkill: ConceptualAACSB: Reflective Thinking11) Teenage unemployment is high because teenagers are more likely to leave their jobs an

23、d more likely to lose their jobs.Answer: TRUETopic: Demographics of UnemploymentSkill: RecognitionAACSB: Reflective Thinking12) Unlike cyclical unemployment, both frictional and structural unemployment rise during recessions and fall during expansions.Answer: FALSETopic: Types of UnemploymentSkill:

24、ConceptualAACSB: Reflective Thinking13) Frictional, structural and cyclical unemployment are three classifications of unemployment.Answer: TRUETopic: Types of UnemploymentSkill: RecognitionAACSB: Reflective Thinking14) If a worker is temporarily laid off because the economy is in a recession, fricti

25、onal unemployment increases.Answer: FALSETopic: Frictional UnemploymentSkill: ConceptualAACSB: Reflective Thinking15) Structural unemployment usually lasts longer than frictional unemployment.Answer: TRUETopic: Structural UnemploymentSkill: ConceptualAACSB: Reflective Thinking16) When the economy is

26、 at full employment the unemployment rate equals the natural unemployment rate.Answer: TRUETopic: Full EmploymentSkill: RecognitionAACSB: Reflective Thinking17) The absence of cyclical unemployment means the economy is at the natural unemployment rate.Answer: TRUETopic: Natural Unemployment RateSkil

27、l: ConceptualAACSB: Reflective Thinking18) The natural unemployment rate increased significantly during the 1980s and the 1990s.Answer: FALSETopic: Explaining Employment and Wage RatesSkill: RecognitionAACSB: Reflective Thinking19) The CPI is the average price of all goods and services produced with

28、in the economy.Answer: FALSETopic: Consumer Price IndexSkill: RecognitionAACSB: Reflective Thinking20) The commodity substitution bias is that consumers substitute high-quality goods for low-quality goods.Answer: FALSETopic: Commodity Substitution BiasSkill: RecognitionAACSB: Reflective ThinkingChap

29、ter23True or False1) Economists are interested in long-term economic growth because growth increases real GDP per person and improves our standard of living.Answer: TRUETopic: Economic GrowthSkill: RecognitionAACSB: Reflective Thinking2) Over the last 100 years, real GDP per person in the United Sta

30、tes has grown at an average rate of approximately 2 percent per year.Answer: TRUETopic: Growth in the U.S. EconomySkill: RecognitionAACSB: Reflective Thinking3) The United States experienced a slowdown in economic growth during which of the following time periods?A) 1973 1983B) 1960sC) late 1990sD)

31、1920sAnswer: ATopic: Growth in the U.S. EconomySkill: RecognitionAACSB: Reflective Thinking4) The United States had the largest of real GDP per person until the 1990s when the Japans real GDP per person overtook and then exceeded that in the United States.Answer: FALSETopic: Real GDP Growth in the World EconomySkill: RecognitionAACSB: Reflective Thinking5) Because the United States is a developed economy, every other country is catching up to the level of