Average labor productivity is defined as
A) per-capital real GDP divided by employment.
B) nominal GDP divided by employment.
C) per-capita nominal GDP divided by employment.
D) real GDP divided by employment.
Question 2If N is the working-age population, Q is the labor force, and U is the number of unemployed, then the unemployment rate is measured as
A) U/N
B) U/Q
C) U/(N-Q)
D) Q/N
Question 3The after-tax income received by the household sector is known as ________.
A) disposable income
B) retained earnings
C) net national product per capita
D) Gross Domestic Product
Question 4If disposable income falls, consumption expenditure falls ________.
A) by an amount that depends on the real interest rate
B) so that planned expenditure remains constant
C) by an amount smaller than the decrease in disposable income
D) all of the above
E) none of the above
Question 5What do economists mean when they characterize households and firms as forward looking?
What will be an ideal response?
Question 6A decline in the output gap causes the demand for real balances
A) to rise and the interest rate to fall.
B) to fall and the interest rate to rise.
C) and the interest rate to fall.
D) and the interest rate to rise.
Question 7In the second half of the twentieth century, the U.S. inflation rate was at its highest in the period from
A) 1960 to the early 1970s.
B) the mid-1970s to the early 1980s.
C) the mid-1980s to the early 1990s.
D) 1990-2000.
Question 8In a put options contract, the
A) seller has the obligation to receive the instrument at a specified time.
B) buyer has the obligation to deliver the instrument at a specified time.
C) buyer has the obligation to receive the instrument at a specified time.
D) seller has the obligation to deliver the instrument at a specified time.
Question 9If the Fed sells securities worth 10 million to a commercial bank, the Fed's balance sheet will show
A) an increase in securities held of 10 million and an increase in bank reserves of 10 million.
B) an increase in securities held of 10 million and a decrease in bank reserves of 10 million.
C) a decrease in securities held of 10 million and an increase in bank reserves of 10 million.
D) a decrease in securities held of 10 million and a decrease in bank reserves of 10 million.
Question 10An increase in the nominal interest rate increases the quantity of credit card services because
A) bank profits go up.
B) of intertemporal substitution.
C) the opportunity cost of making transactions with money has risen.
D) the substitution effect is greater than the income effect.
Question 11Gross income net of taxes is known as ________.
A) Gross Domestic Product, or GDP
B) disposable income
C) Gross Domestic Product per capita
D) retained earnings
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