question
26. Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.
a.nominal GDP is $22,000 real GDP is $21,000, and the GDP deflator is 95.45.
b.nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 104.77.
c.nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45.
d.nominal GDP is $21,00, real GDP is $22,000, and the GDP deflator is 104.77.
a.nominal GDP is $22,000 real GDP is $21,000, and the GDP deflator is 95.45.
b.nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 104.77.
c.nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45.
d.nominal GDP is $21,00, real GDP is $22,000, and the GDP deflator is 104.77.
answer
c.nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45.
question
40. Which of the following is not correct?
a.The consumer price index gives economists a way of turning dollar figures into meaningful measures of purchasing power.
b.The consumer price index is used to monitor changes in the cost of living over time.
c.The consumer price index is used by economists to measure the inflation rate.
d.The consumer price index is used to measure the quantity of goods and services that the economy is producing.
a.The consumer price index gives economists a way of turning dollar figures into meaningful measures of purchasing power.
b.The consumer price index is used to monitor changes in the cost of living over time.
c.The consumer price index is used by economists to measure the inflation rate.
d.The consumer price index is used to measure the quantity of goods and services that the economy is producing.
answer
d.The consumer price index is used to measure the quantity of goods and services that the economy is producing.
question
41. The inflation rate is defined as the
a.price level in an economy.
b.change in the price level from one period to the next.
c.percentage change in the price level from the previous period.
d.price level minus the price level from the previous period.
a.price level in an economy.
b.change in the price level from one period to the next.
c.percentage change in the price level from the previous period.
d.price level minus the price level from the previous period.
answer
c.percentage change in the price level from the previous period.
question
n the CPI, goods and services are weighted according to
a.how long a market has existed for each good or service.
b.the extent to which each good or service is regarded by the government as a necessity
.c.how much consumers buy of each good or service.
d.the number of firms that produce and sell each good or service.
a.how long a market has existed for each good or service.
b.the extent to which each good or service is regarded by the government as a necessity
.c.how much consumers buy of each good or service.
d.the number of firms that produce and sell each good or service.
answer
c.how much consumers buy of each good or service.
question
In the calculation of the CPI, books are given greater weight than magazines if
a.consumers buy more books than magazines.
b.the price of books is higher than the price of magazines.
c.it costs more to produce books than it costs to produce magazines.
d.books are more readily available than magazines to the typical consumer.
a.consumers buy more books than magazines.
b.the price of books is higher than the price of magazines.
c.it costs more to produce books than it costs to produce magazines.
d.books are more readily available than magazines to the typical consumer.
answer
a.consumers buy more books than magazines.
question
44. In calculating the CPI, a fixed basket of goods and services is used. The quantities of the goods and services in the fixed basket are determined by
a.surveying consumers.
b.surveying sellers of the goods and services.
c.working backward from the rate of inflation to arrive at imputed values for those quantities.
d.arbitrary choices made by federal government employees.
a.surveying consumers.
b.surveying sellers of the goods and services.
c.working backward from the rate of inflation to arrive at imputed values for those quantities.
d.arbitrary choices made by federal government employees.
answer
a.surveying consumers.
question
45. Between October 2001 and October 2002, the CPI in Canada rose from 116.5 to 119.8 and the CPI in Mexico rose from 93.2 to 102.3. What were the inflation rates for Canada and Mexico over this one-year period?
a.2.8 percent for Canada and 9.1 percent for Mexico
b.2.8 percent for Canada and 9.8 percent for Mexico
c.3.3 percent for Canada and 9.1 percent for Mexico
d.3.3 percent for Canada and 9.8 percent for Mexico
a.2.8 percent for Canada and 9.1 percent for Mexico
b.2.8 percent for Canada and 9.8 percent for Mexico
c.3.3 percent for Canada and 9.1 percent for Mexico
d.3.3 percent for Canada and 9.8 percent for Mexico
answer
b.2.8 percent for Canada and 9.8 percent for Mexico
question
The price index was 150 in the first year, 160 in the second year, and 175 in the third year. The inflation rate was about
a.6.25 percent between the first and second years, and 8.6 percent between the second and third years.
b.6.7 percent between the first and second years, and 9.4 percent between the second and third years.
c.10 percent between the first and second years, and 15 percent between the second and third years.
d.60 percent between the first and second years, and 75 percent between the second and third years.
a.6.25 percent between the first and second years, and 8.6 percent between the second and third years.
b.6.7 percent between the first and second years, and 9.4 percent between the second and third years.
c.10 percent between the first and second years, and 15 percent between the second and third years.
d.60 percent between the first and second years, and 75 percent between the second and third years.
answer
b.6.7 percent between the first and second years, and 9.4 percent between the second and third years.
question
Which of the following changes in the price index produces the greatest rate of inflation: 80 to 100, 100 to 120, or 150 to 170?
a.80 to 100
b.100 to 120
c.150 to 170
d.All of these changes produce the same rate of inflation.
a.80 to 100
b.100 to 120
c.150 to 170
d.All of these changes produce the same rate of inflation.
answer
a.80 to 100
question
In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010. A bottle of cologne cost $30 in 2009 and $40 in 2010. Using 2009 as the base year, which of the following statements is correct?
a.For the typical consumer, the number of dollars spent on razors is equal to the number of dollars spent on cologne in each of the two years
.b.The consumer price index is 310 in 2010.
c.The rate of inflation is 29.17% in 2010.
d.None of the above is correct.
a.For the typical consumer, the number of dollars spent on razors is equal to the number of dollars spent on cologne in each of the two years
.b.The consumer price index is 310 in 2010.
c.The rate of inflation is 29.17% in 2010.
d.None of the above is correct.
answer
c.The rate of inflation is 29.17% in 2010.
question
53. One problem with the consumer price index stems from the fact that, over time, consumers tend to buy larger quantities of goods that have become relatively less expensive and smaller quantities of goods that have become relatively more expensive. This problem is called
a.price-change neglect.
b.unmeasured quality change.
c.substitution bias.
d.relative bias.
a.price-change neglect.
b.unmeasured quality change.
c.substitution bias.
d.relative bias.
answer
c.substitution bias.
question
Suppose that the prices of dairy products have risen relatively less than prices in general over the last several years. To which problem in the construction of the CPI is this situation most relevant?a.substitution bias
b.introduction of new goods
c.unmeasured quality change
d.income bias
b.introduction of new goods
c.unmeasured quality change
d.income bias
answer
a.substitution bias
question
Suppose prices of personal computers fall significantly and consumers respond by buying more personal computers. The consumer price index
a.reflects this price decrease accurately.
b.understates this price decrease due to the substitution bias.
c.overstates this price decrease due to the income bias.
d.overstates this price decrease due to the substitution bias.
a.reflects this price decrease accurately.
b.understates this price decrease due to the substitution bias.
c.overstates this price decrease due to the income bias.
d.overstates this price decrease due to the substitution bias.
answer
b.understates this price decrease due to the substitution bias.
question
56. The introduction of a new good
a.increases the cost of maintaining the same level of economic well-being.
b.decreases the cost of maintaining the same level of economic well-being.
c.has no impact on the cost of maintaining the same level of economic well-being.
d.may increase or decrease the cost of maintaining the same level of economic well-being, depending on how expensive the new good is.
a.increases the cost of maintaining the same level of economic well-being.
b.decreases the cost of maintaining the same level of economic well-being.
c.has no impact on the cost of maintaining the same level of economic well-being.
d.may increase or decrease the cost of maintaining the same level of economic well-being, depending on how expensive the new good is.
answer
b.decreases the cost of maintaining the same level of economic well-being.
question
57. Because the CPI is based on a fixed basket of goods, the introduction of new goods and services in the economy causes the CPI to overestimate the cost of living. This is so because
a.new goods and services are always of higher quality than existing goods and services.
b.new goods and services cost less than existing goods and services.
c.new goods and services cost more than existing goods and services.
d.when a new good is introduced, it gives consumers greater choice, thus reducing the amount they must spend to maintain their standard of living.
a.new goods and services are always of higher quality than existing goods and services.
b.new goods and services cost less than existing goods and services.
c.new goods and services cost more than existing goods and services.
d.when a new good is introduced, it gives consumers greater choice, thus reducing the amount they must spend to maintain their standard of living.
answer
d.when a new good is introduced, it gives consumers greater choice, thus reducing the amount they must spend to maintain their standard of living.
question
58. If the quality of a good improves while its price remains the same, then the value of a dollar
a.rises and the cost of living increases.
b.rises and the cost of living decreases
.c.falls and the cost of living increases.
d.falls and the cost of living decreases.
a.rises and the cost of living increases.
b.rises and the cost of living decreases
.c.falls and the cost of living increases.
d.falls and the cost of living decreases.
answer
b.rises and the cost of living decreases
question
59. When the quality of a good deteriorates while its price remains the same, the purchasing power of the dollar
a.increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
b.increases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
c.decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
d.decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
a.increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
b.increases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
c.decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
d.decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
answer
d.decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
question
60. Which of the following is the most accurate statement about the effects of quality change on the CPI?
a.Even though the BLS adjusts the prices of products in the CPI basket when the quality of the products change, changes in quality are still a problem because quality is so hard to measure.
b.Because the BLS adjusts the prices of products in the CPI basket when the quality of the products change, changes in quality are no longer a problem for the CPI.
c.The BLS does not adjust the CPI for quality changes.
d.Most economists believe that changes in the quality of goods included in the CPI basket do not bias the CPI as a measure of the cost of living.
a.Even though the BLS adjusts the prices of products in the CPI basket when the quality of the products change, changes in quality are still a problem because quality is so hard to measure.
b.Because the BLS adjusts the prices of products in the CPI basket when the quality of the products change, changes in quality are no longer a problem for the CPI.
c.The BLS does not adjust the CPI for quality changes.
d.Most economists believe that changes in the quality of goods included in the CPI basket do not bias the CPI as a measure of the cost of living.
answer
a.Even though the BLS adjusts the prices of products in the CPI basket when the quality of the products change, changes in quality are still a problem because quality is so hard to measure.
question
61. Which of these events would cause the consumer price index to overstate the increase in the cost of living?
a.Car makers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price.
b.Energy prices decrease, and consumers respond by buying more gas and electricity.
c.A new good is introduced that renders cellular telephones inferior and obsolete.
d.All of the above are correct.
a.Car makers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price.
b.Energy prices decrease, and consumers respond by buying more gas and electricity.
c.A new good is introduced that renders cellular telephones inferior and obsolete.
d.All of the above are correct.
answer
d.All of the above are correct.
question
An important difference between the GDP deflator and the consumer price index is that
a.the GDP deflator reflects the prices of goods and services bought by producers, whereas the consumer price index reflects the prices of goods and services bought by consumers.
b.the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by consumers.
c.the GDP deflator reflects the prices of all final goods and services produced by a nation's citizens, whereas the consumer price index reflects the prices of all final goods and services bought by consumers.
d.the GDP deflator reflects the prices of all final goods and services bought by producers and consumers, whereas the consumer price index reflects the prices of all final goods and services bought by consumers.
a.the GDP deflator reflects the prices of goods and services bought by producers, whereas the consumer price index reflects the prices of goods and services bought by consumers.
b.the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by consumers.
c.the GDP deflator reflects the prices of all final goods and services produced by a nation's citizens, whereas the consumer price index reflects the prices of all final goods and services bought by consumers.
d.the GDP deflator reflects the prices of all final goods and services bought by producers and consumers, whereas the consumer price index reflects the prices of all final goods and services bought by consumers.
answer
b.the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by consumers.
question
63. The CPI differs from the GDP deflator in that
a.the CPI is a price index, while the GDP deflator is an inflation index.
b.substitution bias is not a problem with the CPI, but it is a problem with the GDP deflator.
c.increases in the prices of foreign produced goods that are sold to U.S. consumers show up in the CPI but not in the GDP deflator.
d.increases in the prices of domestically produced goods that are sold to the U.S. government show up in the CPI but not in the GDP deflator.
a.the CPI is a price index, while the GDP deflator is an inflation index.
b.substitution bias is not a problem with the CPI, but it is a problem with the GDP deflator.
c.increases in the prices of foreign produced goods that are sold to U.S. consumers show up in the CPI but not in the GDP deflator.
d.increases in the prices of domestically produced goods that are sold to the U.S. government show up in the CPI but not in the GDP deflator.
answer
c.increases in the prices of foreign produced goods that are sold to U.S. consumers show up in the CPI but not in the GDP deflator.
question
64. An increase in the price of dairy products produced domestically will be reflected in
a.both the GDP deflator and the consumer price index.
b.neither the GDP deflator nor the consumer price index.
c.the GDP deflator but not in the consumer price index.
d.the consumer price index but not in the GDP deflator.
a.both the GDP deflator and the consumer price index.
b.neither the GDP deflator nor the consumer price index.
c.the GDP deflator but not in the consumer price index.
d.the consumer price index but not in the GDP deflator.
answer
a.both the GDP deflator and the consumer price index
question
If the price of Italian shoes imported into the United States increases, then
a.both the GDP deflator and the consumer price index will increase.
b.neither the GDP deflator nor the consumer price index will increase.
c.the GDP deflator will increase, but the consumer price index will not increase.
d.the consumer price index will increase, but the GDP deflator will not increase.
a.both the GDP deflator and the consumer price index will increase.
b.neither the GDP deflator nor the consumer price index will increase.
c.the GDP deflator will increase, but the consumer price index will not increase.
d.the consumer price index will increase, but the GDP deflator will not increase.
answer
d.the consumer price index will increase, but the GDP deflator will not increase.
question
66. One of the differences between the GDP deflator and the consumer price index is
a.the GDP deflator includes income earned by American citizens working in foreign countries and the consumer price index is based solely on purchases made in the U.S.
b.the consumer price index basket of goods is updated constantly by the Bureau of Labor Statistics whereas the GDP deflator is updated only occasionally.
c.the consumer price index includes items not included in the GDP deflator such as airplanes purchased by the Air Force.
d.the GDP deflator reflects prices for all goods and services produced domestically and the consumer price index reflects prices for some goods and services bought by consumers.
a.the GDP deflator includes income earned by American citizens working in foreign countries and the consumer price index is based solely on purchases made in the U.S.
b.the consumer price index basket of goods is updated constantly by the Bureau of Labor Statistics whereas the GDP deflator is updated only occasionally.
c.the consumer price index includes items not included in the GDP deflator such as airplanes purchased by the Air Force.
d.the GDP deflator reflects prices for all goods and services produced domestically and the consumer price index reflects prices for some goods and services bought by consumers.
answer
d.the GDP deflator reflects prices for all goods and services produced domestically and the consumer price index reflects prices for some goods and services bought by consumers.
question
Babe Ruth's 1931 salary was $80,000. Government statistics show a consumer price index of 15.2 for 1931 and 214.5 for 2009. Ruth's 1931 salary was equivalent to a 2009 salary of about
a.$5,874.
b.$822,566.
c.$1,128,947.
d.$13,560,020.
a.$5,874.
b.$822,566.
c.$1,128,947.
d.$13,560,020.
answer
c.$1,128,947.
question
If the CPI was 95 in 1955 and is 475 today, then $100 today purchases the same amount of goods and services as
a.$4.75 purchased in 1955.
b.$20.00 purchased in 1955.
c.$95.00 purchased in 1955.
d.$500 purchased in 1955.
a.$4.75 purchased in 1955.
b.$20.00 purchased in 1955.
c.$95.00 purchased in 1955.
d.$500 purchased in 1955.
answer
b.$20.00 purchased in 1955.
question
If the CPI was 108.00 in 1942 and is 336.96 today, then $10 in 1942 purchased the same amount of goods and services as
a.$2.57 purchases today.
b.$28.89 purchases today.
c.$31.20 purchases today.
d.$38.89 purchases today.
a.$2.57 purchases today.
b.$28.89 purchases today.
c.$31.20 purchases today.
d.$38.89 purchases today.
answer
c.$31.20 purchases today.
question
In 1969, Malcolm bought a Pontiac Firebird for $2,500. If the price index was 36.7 in 1969 and the price index was 180 in 2009, then what is the price of the Firebird in 2009 dollars?
a.$509.72
b.$6,866.49
c.$9,761.58
d.$12,261.58
a.$509.72
b.$6,866.49
c.$9,761.58
d.$12,261.58
answer
d.$12,261.58
question
Which of the following is not correct?
a.If the inflation rate exceeds the nominal interest rate, then the purchasing power of an interest-earning deposit falls over time.
b.If there is deflation, then the purchasing power of an interest-earning deposit rises by more than the nominal interest rate over time.
c.The higher the rate of inflation, the smaller the increase in the purchasing power of an interest-earning deposit.
d.The purchasing power of an interest-earning deposit can increase or decrease over time, but it cannot stay the same.
a.If the inflation rate exceeds the nominal interest rate, then the purchasing power of an interest-earning deposit falls over time.
b.If there is deflation, then the purchasing power of an interest-earning deposit rises by more than the nominal interest rate over time.
c.The higher the rate of inflation, the smaller the increase in the purchasing power of an interest-earning deposit.
d.The purchasing power of an interest-earning deposit can increase or decrease over time, but it cannot stay the same.
answer
d.The purchasing power of an interest-earning deposit can increase or decrease over time, but it cannot stay the same.
question
Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate?
a.The real interest rate is the nominal interest rate times the rate of inflation.
b.The real interest rate is the nominal interest rate minus the rate of inflation.
c.The real interest rate is the nominal interest rate plus the rate of inflation.
d.The real interest rate is the nominal interest rate divided by the rate of inflation.
a.The real interest rate is the nominal interest rate times the rate of inflation.
b.The real interest rate is the nominal interest rate minus the rate of inflation.
c.The real interest rate is the nominal interest rate plus the rate of inflation.
d.The real interest rate is the nominal interest rate divided by the rate of inflation.
answer
b.The real interest rate is the nominal interest rate minus the rate of inflation.
question
75. Which of the following statements about real and nominal interest rates is correct?
a.When the nominal interest rate is rising, the real interest rate is necessarily rising; when the nominal interest rate is falling, the real interest rate is necessarily falling.
b.If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent.
c.An increase in the real interest rate is necessarily accompanied by either an increase in the nominal interest rate, an increase in the inflation rate, or both.
d.When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate.
a.When the nominal interest rate is rising, the real interest rate is necessarily rising; when the nominal interest rate is falling, the real interest rate is necessarily falling.
b.If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent.
c.An increase in the real interest rate is necessarily accompanied by either an increase in the nominal interest rate, an increase in the inflation rate, or both.
d.When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate.
answer
D. When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate.
question
76. If the nominal interest rate is 8 percent and the rate of inflation is 3 percent, then the real interest rate is
a.-5 percent.
b.1.67 percent.
c.5 percent.
d.11 percent.
a.-5 percent.
b.1.67 percent.
c.5 percent.
d.11 percent.
answer
c.5 percent.
question
77. Corey deposits $1,000 in a savings account that pays an annual interest rate of 5 percent. Over the course of a year, the inflation rate is 1.7 percent. At the end of the year, Corey has
a.$17 more in his account, and his purchasing power has increased by $10.
b.$30 more in his account, and his purchasing power has increased by $50.
c.$40 more in his account, and his purchasing power has increased by $33.
d.$50 more in his account, and his purchasing power has increased by $33.
a.$17 more in his account, and his purchasing power has increased by $10.
b.$30 more in his account, and his purchasing power has increased by $50.
c.$40 more in his account, and his purchasing power has increased by $33.
d.$50 more in his account, and his purchasing power has increased by $33.
answer
d.$50 more in his account, and his purchasing power has increased by $33.
question
78. The consumer price index was 200 in 2008 and 190 in 2009. The nominal interest rate during this period was 4.5 percent. What was the real interest rate during this period?
a.- 0.75 percent
b.- 0.5 percent
c.9.5 percent
d.9.75 percent
a.- 0.75 percent
b.- 0.5 percent
c.9.5 percent
d.9.75 percent
answer
c.9.5 percent
question
Which of the following statements is true?
a.Productivity is calculated as hours worked divided by output produced.
b.Americans have a higher standard of living than Indonesians because American workers are more productive than Indonesian workers.
c.Both A and B are correct.
d.None of the above are correct.
a.Productivity is calculated as hours worked divided by output produced.
b.Americans have a higher standard of living than Indonesians because American workers are more productive than Indonesian workers.
c.Both A and B are correct.
d.None of the above are correct.
answer
b.Americans have a higher standard of living than Indonesians
question
Which of the following is not correct?
a.Countries that have had higher output growth per person have typically done so without higher productivity growth
.b.A country's standard of living and its productivity are closely related.
c.Productivity refers to output produced per hour of work.d.Increases in productivity can be used to increase output or leisure.
a.Countries that have had higher output growth per person have typically done so without higher productivity growth
.b.A country's standard of living and its productivity are closely related.
c.Productivity refers to output produced per hour of work.d.Increases in productivity can be used to increase output or leisure.
answer
a.Countries that have had higher output growth per person have typically done so without higher productivity growth
question
Over the last ten years productivity grew more slowly in Upland than in Lowland and the population and total hours worked remained the same in both countries. It follows that
a.real GDP per person must be lower in Upland than in Lowland
.b.real GDP per person grew more slowly in Upland than in Lowland.
c.the standard of living must be higher in Upland than in Lowland.
d.All of the above are correct.
a.real GDP per person must be lower in Upland than in Lowland
.b.real GDP per person grew more slowly in Upland than in Lowland.
c.the standard of living must be higher in Upland than in Lowland.
d.All of the above are correct.
answer
b.real GDP per person grew more slowly in Upland than in Lowland
question
82. The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?a.the owner's knowledge of how to prepare vegetarian entrees
b.the money in the owner's account at the bank from which she borrowed money
c.the tables and chairs in the restaurant
d.the fresh fruits, vegetables, and grains the restaurant uses to prepare its meals
b.the money in the owner's account at the bank from which she borrowed money
c.the tables and chairs in the restaurant
d.the fresh fruits, vegetables, and grains the restaurant uses to prepare its meals
answer
c.the tables and chairs in the restaurant
question
83. Which of the following would not be considered physical capital?a.a new factory building
b.a computer used to help Mercury Delivery Service keep track of its orders
c.on-the-job training
d.a desk used in an accountant's office
b.a computer used to help Mercury Delivery Service keep track of its orders
c.on-the-job training
d.a desk used in an accountant's office
answer
c.on-the-job training
question
84. Which of the following is considered human capital? Knowledge acquired from
a.early childhood education programs
b.job training
c.on-the-job experience
d.All of the above are correct.
a.early childhood education programs
b.job training
c.on-the-job experience
d.All of the above are correct.
answer
d.All of the above are correct.
question
Which of the following is human capital?
a.a student loan
b.understanding how to use a company's accounting software
c.training videos for new corporate employees
d.All of the above are correct.
a.a student loan
b.understanding how to use a company's accounting software
c.training videos for new corporate employees
d.All of the above are correct.
answer
b.understanding how to use a company's accounting software
question
Which of the following is considered human capital?
a.the comfortable chair in your dorm room where you read economics texts
b.the amount you get paid each week to work at the library
c.the things you have learned this semester
d.any capital goods that require a human to be present to operate
a.the comfortable chair in your dorm room where you read economics texts
b.the amount you get paid each week to work at the library
c.the things you have learned this semester
d.any capital goods that require a human to be present to operate
answer
c.the things you have learned this semester
question
87. Which of the following best illustrates the human capital of a survivor stranded on an island?
a.the fishing poles she has produced
b.the invention of a better fishing lure
c.the fresh fruit and fish on and around the island
d.her previous training in a survival course
a.the fishing poles she has produced
b.the invention of a better fishing lure
c.the fresh fruit and fish on and around the island
d.her previous training in a survival course
answer
d.her previous training in a survival course
question
88. Which of the following statements is correct?
a.By definition, all natural resources are nonrenewable.
b.Market prices give us reason to believe that natural resources are a limit to economic growth.
c.An economy must be blessed with ample quantities of natural resources if it is to be a highly productive economy.
d.Differences in natural resources can explain some of the differences in standards of living around the world.
a.By definition, all natural resources are nonrenewable.
b.Market prices give us reason to believe that natural resources are a limit to economic growth.
c.An economy must be blessed with ample quantities of natural resources if it is to be a highly productive economy.
d.Differences in natural resources can explain some of the differences in standards of living around the world.
answer
d.Differences in natural resources can explain some of the differences in standards of living around the world.
question
The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called
a.physical capital.
b.natural resources.
c.human capital.
d.technological knowledge.
a.physical capital.
b.natural resources.
c.human capital.
d.technological knowledge.
answer
b.natural resources.
question
90. Despite its status as one of the richest countries in the world, Japan
a.has a very low level of productivity.
b.has few natural resources.
c.has very little human capital.
d.engages in a relatively small amount of international trade.
a.has a very low level of productivity.
b.has few natural resources.
c.has very little human capital.
d.engages in a relatively small amount of international trade.
answer
b.has few natural resources.
question
Technological knowledge refers to
a.human capital.
b.available information on how to produce things.
c.resources expended transmitting society's understanding to the labor force.
d.All of the above are technological knowledge.
a.human capital.
b.available information on how to produce things.
c.resources expended transmitting society's understanding to the labor force.
d.All of the above are technological knowledge.
answer
b.available information on how to produce things.
question
2. Human capital is
a.the same thing as technological knowledge.
b.the same thing as labor.
c.the tools and equipment operated by humans.
d.knowledge and skills that workers have acquired.
a.the same thing as technological knowledge.
b.the same thing as labor.
c.the tools and equipment operated by humans.
d.knowledge and skills that workers have acquired.
answer
d.knowledge and skills that workers have acquired.
question
Ryan plans on going to go to study engineering. What he learns about existing information increases
a.both technological knowledge and human capital.
b.technological knowledge but not human capital.
c.human capital but not technological knowledge
.d.neither technological knowledge nor human capital.
a.both technological knowledge and human capital.
b.technological knowledge but not human capital.
c.human capital but not technological knowledge
.d.neither technological knowledge nor human capital.
answer
c.human capital but not technological knowledge
question
94. Which of the following statements about inputs is correct?
a.A forest is an example of a natural resource; it is also an example of a renewable resource.
b.There is no distinction between human capital and technological knowledge.
c.Human capital is a non-produced factor of production.
d.Physical capital is a non-produced factor of production.
a.A forest is an example of a natural resource; it is also an example of a renewable resource.
b.There is no distinction between human capital and technological knowledge.
c.Human capital is a non-produced factor of production.
d.Physical capital is a non-produced factor of production.
answer
a.A forest is an example of a natural resource; it is also an example of a renewable resource.
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