Chapter 11 + 12 Homework

Which of the following pairs of terms refer to the same thing? - "technological knowledge" and "human capital" - "standard of living" and "human capital" - "capital" and "physical capital" - "standard of living" and "productivity"

"capital" and "physical capital"

Henri earned a salary of $50,000 in 2001 and $70,000 in 2006. The consumer price index was 177 in 2001 and 265.5 in 2006. Henri's 2006 salary in 2001 dollars is - $105,000.00. - $35,000.00 - $61,950.00 - $46,666.67.

$46,666.67.

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $77; in 2013, the basket's cost was $82; and in 2014, the basket's cost was $90. The value of the CPI in 2014 was - 116.9 and the inflation rate was 16.9%. - 109.8 and the inflation rate was 9.8%. - 109.8 and the inflation rate was 16.9%. - 116.9 and the inflation rate was 9.8%.

116.9 and the inflation rate was 9.8%.

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million. The year before, real GDP was 500.0 billion and the population was 2.0 million. What was the growth rate of real GDP per person during the year? - 2% - 4% - 12% - 10%

2%

If the nominal interest rate is 8 percent and the rate of inflation is 3 percent, then the real interest rate is - 5% - -5% - 11% - 1.67%

5%

Which of the following is an example of the "brain drain?" - A country's most highly educated workers emigrate to rich countries. - A country steals patented technology from another country. - The population of a country grows so fast that the educational system can't keep up. - A country has such a poor educational system that human capital falls over time.

A country's most highly educated workers emigrate to rich countries.

All else equal, which of the following would tend to cause real GDP per person to rise? - strengthening of property rights. - an increase in investment in human capital - All of the above are correct. - a change from inward-oriented policies to outward-oriented policies

All of the above are correct.

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries? - life expectancy - All of the above. - housing - healthcare

All of the above.

Which of the following correctly ranks the three countries, from highest to lowest, for percentage of college-age children in school? - United Kingdom, Mexico, Mali. - United Kingdom, Mali, Mexico. - Mali, Mexico, United Kingdom. - Mexico, Mali, United Kingdom.

United Kingdom, Mexico, Mali.

Which of the following statements about real and nominal interest rates is correct? - If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent. - 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. - 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. - When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate.

When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate.

The level of real GDP person - differs widely across countries, but the growth rate of real GDP per person is similar across countries. - and the growth rate of real GDP per person are similar across countries. - is very similar across countries, but the growth rate of real GDP per person differs widely across countries. - and the growth rate of real GDP per person vary widely across countries.

and the growth rate of real GDP per person vary widely across countries.

When looking at a graph of nominal and real interest rates you notice the graph for nominal rates and the graph for real rates cross each other many times. From this you conclude - GDP was always increasing for the time frame represented on the graph. - the economy never experienced a recession in the time frame represented on the graph. - consumer prices were always rising in the time frame represented on the graph. - consumer prices sometimes rose and sometimes fell in the time frame represented on the graph.

consumer prices sometimes rose and sometimes fell in the time frame represented on the graph.

Other things the same, when an economy increases its saving rate - consumption falls now and production falls later. - consumption falls now and production rises later. - consumption and production rise now. - consumption rises now and production rises later

consumption and production rise now.

Other things the same, an increase in population growth - decreases capital per worker. Further, there is some evidence that a higher population growth rate may decrease the pace of technological progress. - decreases capital per worker. However, there is some evidence that a higher population growth rate may increase the pace of technological progress. - increases capital per worker. Further, there is some evidence that a higher population growth rate may increase the pace of technological progress. - increases capital per worker. However, there is some evidence that a higher population growth rate may decrease the pace of technological progress.

decreases capital per worker. However, there is some evidence that a higher population growth rate may increase the pace of technological progress.

Two countries are the same, except one is poorer. Assuming the traditional assumption about the production function is made there are - diminishing returns to capital so the poor country grows faster. - increasing returns to capital so the poor country grows slower. - increasing returns to capital so the poor country grows faster. - diminishing returns to capital so the poor country grows slower.

diminishing returns to capital so the poor country grows faster.

One of the widely acknowledged problems with using the consumer price index as a measure of the cost of living is that the CPI - fails to measure all changes in the quality of goods. - All of the above are correct. - displays a housing bias. - accounts for changes in prices of some goods, but prices of certain goods are assumed to remain constant.

fails to measure all changes in the quality of goods.

When the consumer price index rises, the typical family - has to spend more dollars to maintain the same standard of living - can offset the effects of rising prices by saving more - can spend fewer dollars to maintain the same standard of living - finds that its standard of living is not affected

has to spend more dollars to maintain the same standard of living

Every unit of good x that is produced in the United States is exported to other countries. An increase in the price of good x shows up - in the consumer price index and in the GDP deflator. - in neither the consumer price index nor in the GDP deflator. - in the GDP deflator, but not in the consumer price index. - in the consumer price index, but not in the GDP deflator.

in the GDP deflator, but not in the consumer price index.

If there are diminishing returns to capital, then - increases in the capital stock eventually decrease output. - increases in the capital stock increase output by ever smaller amounts. - capital produces fewer goods as it ages. - old ideas are not as useful as new ones.

increases in the capital stock increase output by ever smaller amounts.

The economy's inflation rate is the - change in the price level from the previous period - price level in the current period - change in the gross domestic product from the previous period - percentage change in the price level from the previous period

percentage change in the price level from the previous period

Which of the following statements is correct? - the CPI can be used to compare dollar figures from different points in time - the GDP deflator better reflects the goods an services bought by consumers than does the CPI - compared to the consumer price index (CPI), the GDP deflator is the more common gauge of inflation - the percentage change in the CPI is a measure of the inflation rate, but the percentage change in the GDP deflator is not a measure of the inflation rate

the CPI can be used to compare dollar figures from different points in time.

What basket of goods and services is used to construct the CPI - only food, clothing, transportation, entertainment, and education - a random sample of all goods and services produced in the economy - the lease expensive and the most expensive goods and services in each major category of consumer expenditures - the goods and services that are typically bought by consumers as determined by government surveys

the goods and services that are typically bought by consumers as determined by government surveys

Suppose prices of personal computers fall significantly and consumers respond by buying more personal computers. The consumer price index - understates this price decrease due to the substitution bias. - overstates this price decrease due to the income bias. - overstates this price decrease due to the substitution bias. - reflects this price decrease accurately.

understates this price decrease due to the substitution bias.

​Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor country to catch up? - The poor country has a health epidemic such as the Zika virus - ​All of the above - ​The poor country imposes heavy tariffs to protect infant industries - ​The poor country has many corrupt officials

​All of the above