Chapter 20 Global Economics

Suppose that in Southlandia, frictional unemployment is 2%, structural unemployment is 3%, and cyclical unemployment is 4%. What is the natural rate of unemployment in Southlandia? a) 2% b) 3% c) 5% d) 9%

5%

What is a converging economy? A converging economy has the capability to catch up with higher‑income economies in terms of technology by investing in human and physical capital. A converging economy is incapable of catching up to high‑income economies due to low levels of technology and human capital. A converging economy describes the downward spiral of all higher‑income economies to the state of lower‑income economies. A converging economy has surpassed other high‑income economies in terms of technology by investing in human and physical capital.

A converging economy has the capability to catch up with higher‑income economies in terms of technology by investing in human and physical capital.

Which of these items was not a characteristic of the Great Depression?

Business spending doubled,

Which is not cited in the textbook as a rationale for the antigrowth argument? Economic growth has come at the expense of creating a high‑stress lifestyle for workers. Economic growth has not eliminated social issues such as poverty. Economic growth can cause environmental problems. Economic growth is not sustainable given the planet's finite amount of resources. Economic growth in developed nations limits the growth of developing countries.

Economic growth in developed nations limits the growth of developing countries.

Which statement best describes the antigrowth argument? Economic growth is no longer relevant in developed countries. Economic growth may not be desirable or sustainable. Economic growth is no longer possible in developed countries. Economic growth has improved working conditions.

Economic growth may not be desirable or sustainable.

Which choice best characterizes the debate over employment insurance? Employment insurance decreases the unemployment rate experienced in the economy. It is difficult to determine whether the economy would be better or worse off without employment insurance. Employment insurance increases the unemployment rate experienced in the economy. The economy would be better off without employment insurance. Employment insurance decreases the unemployment rate experienced in the economy. The economy would be worse off without employment insurance. Employment insurance increases the unemployment rate experienced in the economy. It is difficult to determine whether the economy would be better or worse off without employment insurance.

Employment insurance increases the unemployment rate experienced in the economy. It is difficult to determine whether the economy would be better or worse off without employment insurance.

Prior to ___________ most economists believed that the economy ____________ Had government officials known at the time of the event what is known now about the macroeconomy, what course of action might the government have taken? a. opposed the use of economic policy B. gone into debt in order to increase government spending C. left the economy alone to adjust on its own D. reduced government spending

Great Depression, would adjust quickly to any changes in market conditions. gone into debt in order to increase government spending

Which of these items was not a characteristic of the Great Recession?

Gross domestic product (GDP) increased.

Which statement regarding economic growth is supported by the histories of the listed countries? Most countries will experience slow and steady economic growth over several decades. Once a country begins to develop economic growth, it will continue to do so. Only capitalist nations experience rapid growth. Growth is not guaranteed, even when a country has experienced it in the past.

Growth is not guaranteed, even when a country has experienced it in the past.

Which of the statements best describes the idea of economic convergence? Wages for all workers worldwide will eventually converge to equal levels. Lower GDP per capita countries will catch up with higher GDP per capita countries. The salaries of men and women will one day be equal. In a supply and demand diagram, the preferences of producers and consumers converge on the equilibrium point.

Lower GDP per capita countries will catch up with higher GDP per capita countries.

In 2000, a small country has real GDP of $20,000 and a population of 150. By 2010, real GDP has grown to $30,000, and improved nutrition has allowed the population to increase to 220. Which statement must be true for this nation? A. The standard of living is higher in 2010 than it was in 2000. B. The high rate of population growth has caused the standard of living to fall. C. In another 10 years, there will not be enough capital equipment for workers to use. D. The productivity of labor in this nation has remained constant.

The standard of living is higher in 2010 than it was in 2000.

Before the Great Depression of the 1930s, the prevailing belief was that the federal government should maintain

an annually balanced budget.

Productivity can increase with improved resource allocation. Which of the options is not a source of improved resource allocation?

an increase in protectionist policies, such as tariffs on imported goods

How does the rule of law affect growth? The rule of law

contributes positively to growth because people can feel secure in their possessions and can rely on others' promises.

The natural rate of unemployment equals structural unemployment minus cyclical unemployment. frictional unemployment plus structural unemployment. frictional unemployment plus underemployed workers. frictional unemployment plus cyclical unemployment. cyclical unemployment plus structural unemployment.

frictional unemployment plus structural unemployment.

How frequently is the survey that determines unemployment released? yearly monthly quarterly weekly

monthly

As the nation's leading expert in economics, you have been asked to present a series of economic policies you believe would be helpful to the nation. Because of budget constraints, the legislature also wants you to rank your suggestions. Which policy would be last on your list of policy proposals? a. strict population control measures B. research and development funding C. improvement of the educational system D. reduction of trade barriers

strict population control measures

Who reports the official U.S. unemployment rate? the U.S. Federal Reserve the U.S. Bureau of Labor Statistics unemployment collection offices the U.S. Treasury Department

the U.S. Bureau of Labor Statistics

The labor force is comprised of the number of people who are counted as employed and unemployed along with discouraged workers. the number of people who are counted as full‑time employees. the number of people who are counted as employed and unemployed. the number of people who are counted as either full‑time or part‑time workers.

the number of people who are counted as employed and unemployed.