The three statistics that are the main focus for those measuring macroeconomic health are?
real GDP, inflation, and unemployment.
The two topics of primary concern in macroeconomics are?
short-run fluctuations in output and employment, and long-run economic growth.
Which of the following statements is most accurate about advanced economies?
Economies experience a positive growth trend over the long run, but experience significant variability in the short run.
Real GDP measures the?
value of final goods and services produced within the borders of a country, corrected for price changes.
Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. This year Harry's again produced 10,000 large pepperoni pizzas (identical to last year's pizzas), but sold them for $12 each. Based on this information we can conclude that Harry's production of large pepperoni pizzas this year:
increased nominal GDP by $20,000, but left real GDP unchanged.
Unemployment describes the condition where?
a person cannot get a job, but is willing to work and is actively seeking work.
Why are economists concerned about inflation?
Inflation lowers the standard of living for people whose income does not increase as fast as the price level.
Which of the following countries would economists say definitively is achieving modern economic growth?
Nigeria experiences a 2.7 percent increase in real GDP per person.
Which of the following is an example of a demand shock?
Consumers become worried about job loss and buy fewer goods and 0 services than expected.
Which of the following is an example of a supply shock?
A dramatic increase in energy prices increases production costs for firms in the economy.
Refer to the above figures. Which figure(s) represent a situation where prices are flexible?
Refer to the above figures. Which figure(s) represent a situation where negative demand shocks can result in a recession?
Refer to the above figures. Which of the following events would most likely result in higher unemployment?
A shift from D2 to D1 in Figure B.
Refer to the above figures. Which of the following events would most likely result in inflation?
A shift from D2 to D3 in Figure A.
Which of the following results from firms holding inventories?
Firms can maintain production levels and adjust inventories in response to demand shocks.
Which of the following best explains why prices tend to be inflexible even when demand changes?
Firms may be reluctant to change prices for fear of setting off a price war or losing customers to rivals.
Refer to the above figures. As the economy moves from the very short run to the longer run, we would expect?
the representation of the economy to move from Figure B to Figure A.
Many economists believe that the widespread use of computerized inventory control systems?
has reduced severity in the business cycle.
Which of the following is an example of economic investment?
Nike buys a new machine that increases shoe production.