JTCC Macro Test #1

Final goods and services refers to

• goods and services that are unsold and therefore added to inventories.

• goods and services whose value has been adjusted for changes in the price level.

• goods and services purchased by ultimate users, rather than for resale or further processing.

• the excess of U.S. exports over U.S. imports.

For economists, the word "utility"...

• versatility and flexibility.

• rationality.

• pleasure or satisfaction.

• purposefulness.

There will be a surplus of a product when

• price is below the equilibrium level.

• the supply curve is downward sloping and the demand curve is upward sloping.

• the demand and supply curves fail to intersect.

• consumers want to buy less than producers offer for sale.

The French term "laissez-faire" means

• "there is no free lunch."

• "let it be."

• "circular flow."

• "public ownership."

Scarcity

• persists only because countries have failed to achieve continuous full employment.

• persists because economic wants exceed available resources.

• has been solved in all industrialized nations.

• has been eliminated in affluent societies such as the United States and Canada.

Real GDP is preferred to nominal GDP as a measure of economic performance because

• nominal GDP uses current prices and thus may over or understate true changes in output.

• nominal GDP only includes goods and excludes services.

• nominal GDP is not adjusted for population changes.

• real GDP accounts for changes in the quality of goods and services produced.

Gross domestic product (GDP) measures and reports output

• as an index number.

• in percentage terms.

• in dollar amounts and percentage growth.

• in quantities of physical units (for example, pounds, gallons, and bushels)

Labor productivity is measured by

• the ratio of capital to labor.

• real output per worker-hour.

• real output per capita.

• the ratio of worker-hours to real GDP.

eBay, Amazon, and other Internet shopping sites provide "seller ratings" done by previous buyers, in order to help deal with the problem of

• externalities.

• moral hazard.

• public goods.

• adverse selection.

Which of the following is used to compare the average standard of living across countries?

• purchasing power parity

• GDP per person

• nominal GDP

• real GDP