ECON202 EXAM 1 - Assignment Essays

question

The measure of GDP that has NOT been adjusted for changes in prices is called:

answer

nominal GPD

question

Using the national spending approach to measuring GDP, the social security checks the government sends retirees each month get included in GDP as part of:

answer

nothing; they are not included as part of GDP.

question

The factor income approach to calculating GDP states that GDP is equal to:

answer

wages + rent + interest + profit.

question

What makes a bigger contribution to GDP, 12 million cars sold at $28,000 each or 20 million computers sold at $1,000 each?

answer

12 million cars

question

If GDP was $10 billion in 2010 and $11 billion in 2011 and the population grew 5% between 2010 and 2011, the growth rate of GDP per capita between 2010 and 2011 was:

answer

question

How often is GDP reported for the U.S. economy?

answer

quarterly

question

For an industrialized country experiencing a 3% growth rate in real GDP, what is the most likely reason that real GDP per capita is decreasing?

answer

The country's population is growing faster than the growth of real GDP.

question

Services involve production that provides:

answer

a benefit without the production of a tangible physical product.

question

Using the national spending approach to measuring GDP, if Tyler buys 50 shares of Apple stock, it is included in GDP as part of:

answer

nothing; it is not included as part of GDP

question

Which of the following is considered investment according to the national spending approach?

answer

spending $1,000 on a new piece of farming equipment

question

Which of the following is NOT considered a government purchase?

answer

unemployment checks

question

(Table: Data from Europia) Based on the data in the table, what is GDP in the economy of Europia?

answer

$13,800

question

In the national spending approach, investment spending involves the acquisition of which of the following?

answer

capital goods

question

The most likely influence of the Internet on the rate of frictional unemployment has been to:

answer

lower it

question

Which doctrine indicates that an employee may quit and an employer may fire an employee at any time for any reason?

answer

employment-at-will

question

The labor force participation rate is highest among those:

answer

between 25 and 54 years of age.

question

Since 1950, the female labor force participation rate in the United States:

answer

has risen

question

The labor force participation rate responds to:

answer

incentives to work

question

If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's labor force is:

answer

110 million

question

Most economists expect labor force participation rates in the United States to:

answer

decrease over time

question

When workers lose their jobs and become officially unemployed, the labor force participation rate:

answer

remains constant

question

The short-term unemployment caused by the ordinary difficulties of matching employee to employer is called:

answer

frictional unemployment

question

(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in the year 2005?

answer

2.9%

question

Which of the following is a concern among economists regarding the aging of the U.S. population?

answer

Since older people are less likely to work, an aging population will lead to a decreased labor force participation rate in the United States and lower tax revenues

question

(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in the year 1995?

answer

question

An investment of $1,000 in the bank at an annual interest rate of 4% at the same time that prices rise by 2.5% generates a real return of:

answer

1.5%

question

Volatile hyperinflation causes financial intermediation to:

answer

break down

question

(Table: Consumer Price Index) Refer to the CPI values in the table for the years 2005 to 2010. What was the approximate inflation rate over the period 2009 to 2010?

answer

1.68%

question

(Table: Inflation in Poland) This table shows actual inflation data for different periods in Poland. Which year was hyperinflationary?

answer

1990

question

(Table: Consumer Price Index) Refer to the CPI values in the table for the years 2005 to 2010. In which year was the inflation rate the highest?

answer

2008

question

Which answer best explains why prices of some popular goods have fallen over time?

answer

Technological advances have reduced production costs.

question

What do we call an increase in the average level of prices in an economy?

answer

inflation

question

An assumption of the quantity theory of money is that real GDP growth:

answer

remains relatively constant

question

Between 1960 and 1990, Argentina's money supply grew at approximately 80%. According to the quantity theory of money, inflation rates in Argentina should have been approximately _____ during this period.

answer

80%

question

The quantity theory of money:

answer

describes the general relationship between money, velocity, real output, and prices.

question

According to the quantity theory, what causes inflation in the long run?

answer

money supply growth

question

According to the quantity theory of money, if money supply is $1,000 million, the overall price level is 200, and real GDP is 50 million, then the velocity of money is equal to:

answer

question

A good is not rivalrous if:

answer

two or more people can consume it at the same time.

question

If the production function in a country is Y = K1/2, the investment rate equals 0.25, and the depreciation rate is 0.05, then the steady-state level of output is equal to:

answer

5 units

question

Which statement about the effects of patents is TRUE?

answer

Patents increase the incentive to research and develop new products but also increase monopoly power once the products are created.

question

Which statement is NOT true?

answer

The smaller the market, the greater the incentive to research and develop new ideas.

question

Diminishing returns to tractors indicates that:

answer

having more tractors leads to more output, but at a decreasing rate.

question

In the Solow model, if a country's saving rate (γ) increased from 10% to 12% and it was operating at its steady state before the change, we would expect to see:

answer

an increase in both the capital stock and output.

question

If we hold ideas, education, and labor constant in the Solow model, then output (GDP) is a function of:

answer

physical capital only.

question

Diminishing returns to capital implies that _____ diminishes as more capital is added.

answer

the marginal product of capital

question

Based on the nature of China's growth in recent years, it is likely that its growth rate will _____ in coming years.

answer

decrease

question

Among countries with similar Solow steady states, poorer countries tend to grow _____ rich countries.

answer

faster than

question

Consider the production function Y = 2 sqrt K. The level of technology in this economy is represented by the value:

answer

question

As a city rebuilds after a hurricane destroys most of its physical capital, we would expect growth in this locale to be:

answer

higher than average in the short run, but return to normal levels in the long run.

1 of 49

question

The measure of GDP that has NOT been adjusted for changes in prices is called:

answer

nominal GPD

question

Using the national spending approach to measuring GDP, the social security checks the government sends retirees each month get included in GDP as part of:

answer

nothing; they are not included as part of GDP.

question

The factor income approach to calculating GDP states that GDP is equal to:

answer

wages + rent + interest + profit.

question

What makes a bigger contribution to GDP, 12 million cars sold at $28,000 each or 20 million computers sold at $1,000 each?

answer

12 million cars

question

If GDP was $10 billion in 2010 and $11 billion in 2011 and the population grew 5% between 2010 and 2011, the growth rate of GDP per capita between 2010 and 2011 was:

answer

question

How often is GDP reported for the U.S. economy?

answer

quarterly

question

For an industrialized country experiencing a 3% growth rate in real GDP, what is the most likely reason that real GDP per capita is decreasing?

answer

The country's population is growing faster than the growth of real GDP.

question

Services involve production that provides:

answer

a benefit without the production of a tangible physical product.

question

Using the national spending approach to measuring GDP, if Tyler buys 50 shares of Apple stock, it is included in GDP as part of:

answer

nothing; it is not included as part of GDP

question

Which of the following is considered investment according to the national spending approach?

answer

spending $1,000 on a new piece of farming equipment

question

Which of the following is NOT considered a government purchase?

answer

unemployment checks

question

(Table: Data from Europia) Based on the data in the table, what is GDP in the economy of Europia?

answer

$13,800

question

In the national spending approach, investment spending involves the acquisition of which of the following?

answer

capital goods

question

The most likely influence of the Internet on the rate of frictional unemployment has been to:

answer

lower it

question

Which doctrine indicates that an employee may quit and an employer may fire an employee at any time for any reason?

answer

employment-at-will

question

The labor force participation rate is highest among those:

answer

between 25 and 54 years of age.

question

Since 1950, the female labor force participation rate in the United States:

answer

has risen

question

The labor force participation rate responds to:

answer

incentives to work

question

If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's labor force is:

answer

110 million

question

Most economists expect labor force participation rates in the United States to:

answer

decrease over time

question

When workers lose their jobs and become officially unemployed, the labor force participation rate:

answer

remains constant

question

The short-term unemployment caused by the ordinary difficulties of matching employee to employer is called:

answer

frictional unemployment

question

(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in the year 2005?

answer

2.9%

question

Which of the following is a concern among economists regarding the aging of the U.S. population?

answer

Since older people are less likely to work, an aging population will lead to a decreased labor force participation rate in the United States and lower tax revenues

question

(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in the year 1995?

answer

question

An investment of $1,000 in the bank at an annual interest rate of 4% at the same time that prices rise by 2.5% generates a real return of:

answer

1.5%

question

Volatile hyperinflation causes financial intermediation to:

answer

break down

question

(Table: Consumer Price Index) Refer to the CPI values in the table for the years 2005 to 2010. What was the approximate inflation rate over the period 2009 to 2010?

answer

1.68%

question

(Table: Inflation in Poland) This table shows actual inflation data for different periods in Poland. Which year was hyperinflationary?

answer

1990

question

(Table: Consumer Price Index) Refer to the CPI values in the table for the years 2005 to 2010. In which year was the inflation rate the highest?

answer

2008

question

Which answer best explains why prices of some popular goods have fallen over time?

answer

Technological advances have reduced production costs.

question

What do we call an increase in the average level of prices in an economy?

answer

inflation

question

An assumption of the quantity theory of money is that real GDP growth:

answer

remains relatively constant

question

answer

80%

question

The quantity theory of money:

answer

describes the general relationship between money, velocity, real output, and prices.

question

According to the quantity theory, what causes inflation in the long run?

answer

money supply growth

question

According to the quantity theory of money, if money supply is $1,000 million, the overall price level is 200, and real GDP is 50 million, then the velocity of money is equal to:

answer

question

A good is not rivalrous if:

answer

two or more people can consume it at the same time.

question

If the production function in a country is Y = K1/2, the investment rate equals 0.25, and the depreciation rate is 0.05, then the steady-state level of output is equal to:

answer

5 units

question

Which statement about the effects of patents is TRUE?

answer

Patents increase the incentive to research and develop new products but also increase monopoly power once the products are created.

question

Which statement is NOT true?

answer

The smaller the market, the greater the incentive to research and develop new ideas.

question

Diminishing returns to tractors indicates that:

answer

having more tractors leads to more output, but at a decreasing rate.

question

In the Solow model, if a country's saving rate (γ) increased from 10% to 12% and it was operating at its steady state before the change, we would expect to see:

answer

an increase in both the capital stock and output.

question

If we hold ideas, education, and labor constant in the Solow model, then output (GDP) is a function of:

answer

physical capital only.

question

Diminishing returns to capital implies that _____ diminishes as more capital is added.

answer

the marginal product of capital

question

Based on the nature of China's growth in recent years, it is likely that its growth rate will _____ in coming years.

answer

decrease

question

Among countries with similar Solow steady states, poorer countries tend to grow _____ rich countries.

answer

faster than

question

Consider the production function Y = 2 sqrt K. The level of technology in this economy is represented by the value:

answer

question

As a city rebuilds after a hurricane destroys most of its physical capital, we would expect growth in this locale to be:

answer

higher than average in the short run, but return to normal levels in the long run.

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