Economics Exam 2

5 Written Questions

1. (Rightward shifts)
   1. Lower cost
   2. possitive Government policy
   3.Economic Growth
   4. Favorable weather
   
   Decrease(leftward shift)
   1. Higher costs
   2. negative Government policy
   Unfavorable weather, natural disaster
2. a price-level increase due to a negative supply shock or increases in input prices.
3. the unemployment that results from workers not having the skills to obtain long-term employment.
   Ex- computer programmer looses his job and remains unemployed regardless of opening jobs for programmers because his skills are no longer up to date with technology.
4. the measure of economic performance based on the value of all final goods and services produced within a country during a given period.
5. most unstable category is investments

5 Matching Questions

1. (Frictional Unemployment)-
2. Stocks
3. Labor Force
4. Nominal Interest Rate
5. Economic Growth

1. a the number of people aged 16 and over who are available for employment
2. b the unemployment that results from workers searching for suitable jobs and firms looking for suitable workers.
   Ex- graduate from college and spend two weeks looking for a job
3. c the reported interest rate that is not adjusted for inflation
4. d An upward trend in the real per capita output of goods and services. improvements in and greater stocks of land, labor, capital, and entrepreneurial activity will shift the production possibilities curve outward
5. e ...

5 Multiple Choice Questions

1. longer-lived consumer goods, such as automobiles, refrigerator, washing machine usually last more than 3 years.
   1. rule of 70
   2. Bonds
   3. Nondurable goods
   4. Durable goods
2. (1) Maintaining employment of human resources at relatively high levels meaning that jobs are relatively plentiful and financial suffering from lack of work and income is relatively uncommon
   
   (2) Maintaining prices at a relatively stable level so that consumers and producers can make better decisions.
   
   (3) Achieving a high rate of economic growth, meaning a growth in output per person over time.
   1. Recessionary Gap
   2. Economic Growth
   3. Macroeconomic Goals (3)
   4. Common Stock
3. residual claimants of corporate resources who receive a proportion of profits based upon the ration of shares held
   1. Supply Shocks
   2. Common Stock
   3. Labor Force
   4. Stocks
4. the output gap that occurs when the actual output is greater than the potential output
   1. Inflation
   2. Recessionary Gap
   3. Inflationary Gap
   4. Deflation
5. whenever the unemployment rate is greater than normal, such as during a recession. "unemployment due to short term cyclical fluctuations in the economy".
   1. (Frictional Unemployment)-
   2. (Cyclical Unemployment)-
   3. (Structural Unemployment-
   4. Unemployment Rate

5 True/False Questions

1. Business Cycle → an obligation issued by the corporation that promises the holder to receive fixed annual interest payments and payment of the principal upon maturity.

   True        False

2. Unexpected inflation/ Hyperinflation → Extremely high rates of inflation for sustained periods of time.

   True        False

3. Supply Shocks → ...

   True        False

4. rule of 70 → shows how long it will take a nation to double its output at various growth rates. if you take a nation's growth rate and divide it into 70, you will have the approximate time it will take to double the income level.

   True        False

5. Preferred stock → a stock that pays fixed, regular dividend payments despite the profits of the corporation.

   True        False