Economics Study Material: GDP, Inflation, Demographics, and Trade, Lecture notes of Economics

Download Economics Study Material: GDP, Inflation, Demographics, and Trade and more Lecture notes Economics in PDF only on Docsity! Chapter 8 TEST Name______________________________________ Date________ TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 1) The prices on a set of about 300 goods and services are used to determine the GDP. 1) _______ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 2) Which of the following would MOST likely be included in the "market basket" of goods used to construct the consumer price index? 2) _______ A) luxury vacations B) medical care C) jewels D) boats TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 3) Many retirees rely on Social Security payments for at least part of their living expenses. 3) _______ 4) To save for your retirement, you need to start making large investments early on in your work career. 4) _______ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 5) Economics is often defined as the study of ________. 5) _______ A) interactions B) policies C) commercialization D) choices 6) A demographer would likely be LEAST interested in looking at which of the following about a group of people? 6) _______ A) race B) level of education C) hobbies D) gender MATCHING. Choose the item in column 2 that best matches each item in column 1. Decide whether each of the following is a macroeconomic or microeconomic issue. 7) a country increasing the number of its exported goods A) macroeconomic 7) _______ B) microeconomic 8) a manufacturing company decreasing its work force due to a drop in demand for its products 8) _______ 9) a high school student planning for her college education 9) _______ 10) the federal government creating new tax exemptions 10) ______ (continued Next Pg) 11) a newlywed couple deciding what kind of home they can buy 11) ______ 12) a state government raising the personal income tax rate 12) ______ 13) a shop owner deciding to increase her prices by 5% 13) ______ 14) a law firm choosing a health insurance plan to offer its employees 14) ______ Determine whether each of the following is best described as an example of inflation, recession, the business cycle, or the global economy. 15) countries depending on goods and services produced by other countries A) business cycle 15) ______ B) recession 16) growth in the CPI 16) ______ C) inflation 17) outsourcing jobs to locations with lower wages 17) ______ D) global economy 18) goods and services becoming more expensive 18) ______ 19) an alternating series of peaks and troughs 19) ______ 20) fewer goods and services being sold 20) ______ 21) when the GDP declines 21) ______ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 22) The ________ is the system in which individuals, businesses, and governments interact. 22) ______ A) macroeconomy B) economy C) demography D) microeconomy TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 23) Jobs in health care and other areas that serve older people are likely to grow in number in the coming years. 23) ______ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 43) Which of the following should you LEAST expect to happen as a result of the Baby Boomers retiring within the next 20 years? 43) ______ A) Your future Social Security benefits may decrease. B) Your FICA taxes may increase. C) You may have to be responsible for funding most or all of your own retirement. D) You may not have to save as much for your own retirement. SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 44) Explain the meaning of the statement "The world is shrinking." 44) _____________ TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 45) It is almost impossible to not be affected by the globalized nature of today's economy. 45) ______ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 46) Which of the following is designed to indicate whether prices are going up or down and by how much? 46) ______ A) the macroeconomic scale B) the business cycle C) the consumer price index D) the gross domestic product SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 47) How might the upcoming retirement of the Baby Boomers affect you in both positive and negative ways? 47) _____________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 48) A severe recession is also known as a(n) ________. 48) ______ A) business cycle B) depression C) inflation D) deflation SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 49) Katya decided that she could not afford the $48,000 it would cost her to attend college and get her four-year degree. Instead, she entered the full-time work force four years earlier than her peers who went to college. During those four years, she earned a total of $90,000. However, without a college degree, Katya made an average of $10,000 less than she could have with a degree every year for the 40 additional years of her career. What was the long-term financial cost of Katya deciding to not attend college? 49) _____________ TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 50) It is generally a good idea to place all of your savings and investments in assets that tend to increase in value by more than the rate of inflation. 50) ______ 51) The level of economic interaction among the countries of the world has remained the same for generations. 51) ______ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 52) GDP stands for ________. 52) ______ A) general domestic product B) gross debt product C) general debt product D) gross domestic product TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 53) When the GDP is higher from one year to the next, it means that businesses and individuals have sold fewer goods and services and that the economy is shrinking. 53) ______ 54) Inflation only occurs occasionally in our economy. 54) ______ 55) In about 25 years, there will be more workers paying into the Social Security system for every worker drawing money from the system than there are today. 55) ______ 56) Only a minority of the products sold in the United States are made solely in the United States. 56) ______ 57) As a study of economics shows, the choices and actions of others typically have only a small effect on any given individual. 57) ______ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 58) Economics is broken down into the categories of ________. 58) ______ A) recession and recovery B) recession and depression C) macroeconomics and microeconomics D) macroeconomics, microeconomics, and demographics 59) By definition, during a time of ________, twenty dollars will not buy as much as it had the previous year. 59) ______ A) expansion B) depression C) inflation D) recession 60) In the business cycle, the lowest point of a recession is called the ________ and the highest point of recovery is called the ________. 60) ______ A) dip; boom B) peak; trough C) trough; peak D) boom; dip 61) The "graying of America" refers to which of the following? 61) ______ A) There are more retirees than people who are currently working. B) The Baby Boomers are the fastest growing demographic group. C) Workers are retiring at a significantly older age than workers of previous generations did. D) The number of older people is increasing at a faster rate than that of other age groups. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 62) Economics includes the study of the decisions of businesses and governments. 62) ______ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 63) Inflation ________ the value of your money. 63) ______ A) increases B) stabilizes C) reduces D) maintains 64) Which of the following jobs is MOST likely to be outsourced to workers in another country? 64) ______ A) technical support B) health care provider C) plumber D) electrician TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 65) As Baby Boomers begin to retire, it will for the first time be wise for workers to save for their retirement above and beyond what they can expect from Social Security. 65) ______ SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 66) The We-Make-It factory in the United States pays its 250 workers an average of $21 per hour, including benefits. The average number of work hours per employee in a year is 1,924. The owners of the factory are considering relocating overseas to a country where they can pay workers an average of $6 per hour, including benefits, to achieve the same production levels. Assuming that the company would hire the same number of workers for the same number of hours in a new location, how much could We-Make-It save in wages alone in the first year by moving to the proposed overseas location? 66) _____________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 67) Which of the following is NOT a demographic trend that will affect the United States in the coming years? 67) ______ A) the shrinking number of retirees B) the growing population of Hispanic-Americans C) the retirement of members of the Baby Boom D) the entry of members of Generation Y into the workforce SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 68) The GDP of the United States in 1993 was 6,657.4 billion dollars. It was 8,304.3 billion dollars in 1997. By what percent did the GDP increase between 1993 and 1997? 68) _____________