1317 Which of the following is considered investment spending in macroeconomics GM builds a new plant to manufacture automobiles True Answer Correct Ryan Jones buys some GM stock Incorrect Ryan Jones buys some GM bonds Incorrect Ryan Jones buys some GM stock and bonds Incorrect 1318 The natural rate of unemployment is the rate of unemployment that exists during recessions Incorrect equal to the sum of frictional and cyclical unemployment Incorrect equal to the sum of frictional and structural unemployment True Answer Correct cyclical unemployment less frictional unemployment Incorrect Which of the following do economists view as investment spending stocks Incorrect bonds Incorrect spending on physical capital True Answer Correct mutual fund investing Incorrect The rate of unemployment that exists when the economy is at full employment is zero Incorrect the natural rate of unemployment True Answer Correct the structural rate of unemployment Incorrect less than full employment rate of unemployment Incorrect Investment spending refers to buying stocks Incorrect buying newly issued shares of stock Incorrect adding to physical capital True Answer Correct adding to one s retirement account Incorrect 1319 1320 1321 1322 1323 The deviations in the actual rate of unemployment away from the natural rate of unemployment is called seasonal Incorrect frictional Incorrect cyclical True Answer Correct structural Incorrect Which of the following is considered to be investing in a physical asset purchasing shares of stock in IBM Incorrect selling shares of stock in IBM Incorrect buying a bond issued by IBM Incorrect buying a new factory that produces IBM handheld devices True Answer Correct 1324 Cyclical unemployment is characterized as unemployment that occurs when people are between jobs Incorrect a lack of good matches between available jobs and the skills people have Incorrect the normal unemployment around which the actual unemployment rate fluctuates Incorrect the deviation in the actual rate of unemployment away from the natural rate True Answer Correct 1325 Which of the following is an example of investment spending The owner of a Domino s Pizza store has employed two students to deliver pizzas Incorrect The manager of a local Domino s Pizza store has taken some cash to the bank to make a deposit Incorrect A local Domino s Pizza store has purchased a new pizza oven True Answer Correct The owner of the Domino s Pizza store has used some of her salary to buy shares of stock in the Domino s corporation Incorrect Deviations from the natural rate of unemployment are known as 1326 1327 1328 1329 1330 frictional unemployment Incorrect structural unemployment Incorrect random unemployment Incorrect cyclical unemployment True Answer Correct Which of the following is an advantage to the recipient country of foreign investment Foreigners are content to receive lower profits and interest rates than are domestic investors Incorrect Foreigners don t expect to receive profits and interest as often as do domestic investors Incorrect Domestic firms with foreign investors are exempt from domestic income taxes on a portion of their net income Incorrect Foreign companies often bring new technology to the recipient country and this increases productivity True Answer Correct Which of the following equations describes the calculation of the natural unemployment rate Natural unemployment frictional unemployment structural unemployment True Answer Correct Natural unemployment cyclical unemployment structural unemployment Incorrect Natural unemployment frictional unemployment cyclical unemployment Incorrect Natural unemployment frictional unemployment structural unemployment cyclical unemployment Incorrect Physical capital is purchased through investment spending which in turn is mostly financed out of taxes Incorrect domestic and foreign savings True Answer Correct import tariffs Incorrect consumption expenditure Incorrect Which of the following is an example of someone who is cyclically unemployed an autoworker who is laid off because of a decline in sales caused by a recession True Answer Correct a geologist who is permanently laid off from an oil company due to a new technological advance Incorrect a worker at a fast food restaurant who quits work and attends college Incorrect a real estate agent who leaves a job in Texas and searches for a similar higher paying job in California Incorrect 1331 Private savings is equal to income after taxes minus consumption True Answer Correct taxes minus government spending on goods and services Incorrect the total amount of savings accounts plus stocks plus bonds owned by households Incorrect income plus investment Incorrect 1332 Unemployment is at its natural level if there is no 1333 1334 unemployment Incorrect frictional unemployment Incorrect structural employment Incorrect cyclical unemployment True Answer Correct Scenario Closed Economy S I GDP is 12 trillion this year in a closed economy Consumption is 8 trillion and government spending is 2 trillion Taxes are 0 5 trillion Reference Ref 25 1 Scenario Closed Economy S I How much is private saving 4 trillion Incorrect 2 5 trillion Incorrect 3 5 trillion True Answer Correct 0 5 trillion Incorrect The sum of the frictional and structural rates of unemployment is called the cyclical rate of unemployment Incorrect cyclical rate of employment Incorrect natural rate of unemployment True Answer Correct 1335 1336 1337 natural rate of employment Incorrect Scenario Closed Economy S I GDP is 12 trillion this year in a closed economy Consumption is 8 trillion and government spending is 2 trillion Taxes are 0 5 trillion Reference Ref 25 1 Scenario Closed Economy S I What is the government budget balance a surplus of 1 5 trillion Incorrect a deficit of 1 5 trillion True Answer Correct a surplus of 0 5 trillion Incorrect a deficit of 0 5 trillion Incorrect Cyclical unemployment rises during a recession True Answer Correct falls during a recession Incorrect rises during an expansion Incorrect is a part of natural unemployment Incorrect Scenario Closed Economy S I GDP is 12 trillion this year in a closed economy Consumption is 8 trillion and government spending is 2 trillion Taxes are 0 5 trillion Reference Ref 25 1 Scenario Closed Economy S I How much is national saving 3 5 trillion Incorrect 3 trillion Incorrect 2 5 trillion Incorrect 2 trillion True Answer Correct 1338 The natural rate of unemployment is composed of frictional
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