ECON HW Q's

Another term used to describe negative inflation is: A. counter inflation B. deflation C. hyperinflation D. GDP deflator

b

If the number of employed persons in a country equals 24 million, the number of unemployed persons equals 8 million, and the number of persons over age 16 in the population equals 40 million, the unemployment rate equals: A. 32% B. 25% C. 20% D. 8%

b

In 1990, the GDP of Canada was $680 billion as measured in Canadian dollars, and the exchange rate was that $1 Canadian was worth 85 U.S. cents. In 2000, the GDP of Canada was $1000 billion as measured in Canadian dollars, and the exchange rate was that $1 Canadian was worth 69 U.S. cents. By what percentage did the GDP of Canada increase from 1990 to 2000 in Canadian dollars? A. 19.4% B. 47% C. 68% D. 147%

b

Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking. What would happen to the unemployment rate? A. It would increase. B. It would fall. C. It would not change. D. It would change, but the effect cannot be predicted.

b

The __________________ is the nominal interest rate minus the rate of inflation. A. real GDP B. real interest rate C. nominally adjusted D. annualized interest rate

b

The definition of market equilibrium states that at the _______________, the quantity of labor demanded by employers will equal the quantity supplied. A. efficiency wage B. equilibrium wage C. sticky wage D. natural rate of unemployment

b

What distinguishes the real value of a statistic from the nominal value of a statistic? A. timing of announcement B. adjusting for inflation C. adjusting for GDP deflator D. real interest rate

b

_________________ refers to the total number of units that are purchased at that price. A. quantity B. quantity demanded C. supply D. market quantity

b

___________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s. A. GDP per capita B. The Industrial Revolution C. The living standard D. Investment and inventions

b

The law of ____ explains why people and societies rarely make all-or-nothing choices. A. consumption B. marginal analysis C. diminishing marginal utility D. utility

c

The nominal value of any economic statistic refers to the number that is actually announced at that time, while the ________________ refers to the statistic after it has been adjusted for inflation. A. empirical value B. adjusted value C. real value D. net value

c

When society has a higher level of capital per person, it is called ______________. A. physical capital B. human capital C. capital deepening D. technological gains

c

When we want to measure wage inflation in the labor market, we use the: A. Consumer Price Index B. Product Price Index C. Employment Cost Index D. Employment Price Index

c

Whenever there is a shortage at a particular price, the quantity sold at that price will equal: A. the quantity demanded at that price. B. the quantity supplied minus the quantity demanded. C. the quantity supplied at that price. D. (quantity demanded plus quantity supplied)/2.

c

Which of the following are most likely classified by economists as consumer durable goods? A. food, clothing B. drugs, toys, magazines, books C. automobiles, furniture D. stocks, bonds

c

Which of the following factors contribute to economic growth? A. an increase in the average wage rate paid to workers B. an increase in the standard of living C. a decrease in the productivity of labor D. an increase in the proportion of the population that is college educated

d

The "law of supply" functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied. a.price demand supply quantity

A

An analyst needs to adjust the nominal GDP for the years 2000 and 2010 into real terms to conclude his comparison analysis. The nominal GDP in 2000 was $672 billion and $1,690 billion for 2010; the real interest rate was 6.79% in 2000 and 3.71% in 2010; the 2000 deflator was 24 and 51 in 2010. What is the real gain? A. 18.34% B. 38.58% C. 151.48% D. 70.61%

a

As the _____________ complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right. A. technology B. low-skill labor C. market D. lower wage

a

Assuming a country's economy maintains an 8% rate of growth; young adults starting at age 20 would see the average standard of living in their country more than double by the time they had reached age __________. A. 30 B. 40 C. 50 D. 60

a

During the deep recessions of the early 1980s and of 2007-2009, unemployment reached roughly A. 10% B. 20% C. 30% D. 40%

a

Karen chooses to go to university fulltime rather than to work. Karen: A. is not part of the labor force. B. is part of the labor force and what economists call a discouraged worker. C. is part of the labor force, but not actively seeking work. D. is considered employed.

a

One of the reasons that a rise in the price of a fixed basket of goods over time tends to overstate the rise in a consumer's true cost of living, is: A. substitution bias B. attribution bias C. complimentary bias D. preference bias

a

The most commonly cited measure of inflation in the United States is: A. the Consumer Price Index (CPI). B. the Deflationary Price Index (DPI) C. the Cumulative Price Index (CPI) D. the Inflationary Price Index (IPI)

a

Two factors that complicate the calculation of the inflation rate are: A. substitution and quality/new product bias B. preferential bias C. complimentary product bias D. consumer behavior bias

a

When a price, wage, or interest rate is adjusted automatically with inflation, it is said to be __________. A. indexed B. COLAed C. nominally adjusted D. semi-indexed

a

A lender demands an interest rate in part to compensate for any expected ___________, so that the money that is repaid in the future will have at least as much buying power as the money that was originally loaned. A. risk premium B. inflation C. compound interest D. opportunity costs

b

Craigburg has a working age population of 20 million. Of those, 11 million are employed and 1million are unemployed. The unemployment rate is ________ and the participation rate is __________. A. 5%; 55%. B. 8.3%; 60%. C. 8.3%; 55%. D. 5%; 60%.

b

If the unemployment rate is 6 percent and the number of persons unemployed is 6 million, then the number of people employed is equal to: A. 100 million B. 94 million C. 106 million D. 6 million

b

Inflation can be calculated in terms of how the overall cost of ___________________ changes over time. A. all goods B. the basket of goods C. all goods and services D. all services

b

Many states do have ____________, which impose an upper limit on the interest rate that lenders can charge. A. price ceiling laws B. usury laws C. price floor laws D. minimum interest rate

b

The U.S. unemployment rate moves up and down as the economy moves in and out of recessions. But over time, the unemployment rate seems to return to a range of ____________. A. 2%-4% B. 4%-6% C. 6%-8% D. 8%-10%

b

The development of a nationwide computerized job bank listing of all job openings would be most likely to reduce: A. natural unemployment. B. frictional unemployment. C. seasonal unemployment. D. cyclical unemployment.

b

The labor force consists of: A. discouraged workers, employed workers, plus those actively seeking work. B. all adults who are working or actively seeking work. C. all adults who are able to work. D. all adults who are working, plus those not working.

b

The rise in unemployment that occurs because of a recession is known as cyclical unemployment, because it is closely tied to the ______________. A. natural rate of unemployment B. business cycle C. supply curve D. labor supply

b

The term "ceteris paribus" means that: A. everything is variable. B. all variables except those specified are constant. C. no one knows which variables will change and which will remain constant. D. what is true for the individual is not necessarily true for the whole.

b

The value of what is produced per worker, or per hour worked, is called ____________. A. economic growth B. human capital C. productivity D. GDP per capita

b

To achieve a high standard of living, a nation should: A. increase the tax deduction for child dependents. B. promote economic growth. C. use less capital and more labor in the production process. D. increase welfare payments to the poor.

b

Which of the following is NOT an example of one of the major categories in the overall CPI? A. apparel and accessories B. entertainment C. recreation D. transportation and insurance

b

Which of the following is correct? A. An increase in the quantity of labor always leads to economic growth. B. Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital. C. A decrease in the productivity of labor leads to economic growth. D. Third World countries are rich in human capital.

b

Which of the following would reduce the supply of microcomputers? A. a technological improvement that lowers the cost of producing the computers B. higher wage rates for the workers that assemble the computers C. a reduction in the price of computer chips used to produce the computers D. a reduction in the price of computers.

b

_________ are now the largest single component of the supply side of GDP, representing over half of GDP. A. Durable goods B. Services C. Nondurable goods D. Structures

b

_________ is calculated by taking _________ and then subtracting the value of how much physical capital is worn out, or reduced in value because of aging, over the course of a year. A. GNP; NNP B. NNP; GNP C. GDP; NNP D. NNP; GDP

b

A country will roughly double its GDP in twenty years if its annual growth rate is: A. 12 percent. B. 7.5 percent. C. 3.5 percent. D. 2.5 percent.

c

An economy's rate of productivity growth is closely linked to the growth rate of its ______________, although the two aren't identical. A. GNP B. output C. GDP per capita D. technology

c

Improvements in the productivity of labor will tend to: A. decrease wages. B. decrease the supply of labor. C. increase wages. D. increase the supply of labor.

c

In the early 1990's extremely high inflation rates of 2500% were common in Russia. During that time, we can say that as a result of those inflation rates, Russia was experiencing ___________________. A. perpetual inflation B. ultra inflation C. hypo inflation D. hyperinflation

c

The unemployment rate in a town in which 65,400 persons are employed and 11,000 are unemployed equals: A. 20.2% B. 16.8% C. 14.4% D. 11%

c

What name is given to the index based on the prices of exported or imported merchandise? A. U.S. Producer Trade Index B. International Trade Index C. International Price Index D. U.S. Producer Price Index

c

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right. A. prices rise B. equilibrium is achieved C. costs of production fall D. there is a population increase

c

Which of the government policies below is most unlikely to encourage per capita economic growth? A. high taxes on companies that spend a lot on capital formation B. the use of tax revenues for investment and capital formation C. special subsidies for capital-intensive forms of production D. promotion of education and training programs for workers

c

__________ implies that pressure for price increases reaches across _______________ markets, not just one. A. inflation; all B. deflation; most C. inflation; most D. deflation; all

c

A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle are: A. trough, expansion, recession, peak B. contraction, recession, expansion, boom C. expansion, trough, recession, peak D. expansion, peak, recession, trough

d

An economics professor is discussing a measure of inflation over time based on a basket of goods comprised of all the components of GDP. Which measure is it? A. Consumer Price Index B. GDP Price Index C. Consumer GDP D. GDP Deflator

d

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect: A. Andy's demand for pizza to increase. B. Andy's demand for pizza to decrease. C. Andy's quantity of pizza demanded to decrease. D. Andy's demand for beer to increase.

d

Cyclical unemployment arises when: A. the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply. B. labor unions strike for higher wages. C. the business cycle enters an expansionary phase. D. business activity in the macroeconomy declines.

d

Economists typically measure economic growth by tracking: A. the employment rate. B. the unemployment rate. C. averaged GDP growth D. real GDP per capita.

d

Frictional unemployment is: A. unemployment that is due to the friction of competing ideological systems. B. unemployment caused by lack of training and education. C. unemployment caused by automation in the workplace. D. unemployment that is due to normal turnover in the labor market.

d

Gomer loses his job as a road construction worker and cannot find another position with equivalent pay and benefits. As a result, he is still checking the want ads and reporting to the unemployment office on a weekly basis. He is considered to be: A. laid off. B. underemployed C. out of the labor force. D. unemployed

d

If the price index moves from 107 to 110, the rate of inflation is: A. 3% B. 30% C. 28% D. 2.8%

d

Most real-world choices are not about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good. A. utility B. opportunity cost C. benefit analysis D. marginal analysis

d

Other things being equal, a __________ supply of workers tends to __________ real wages. A. smaller; not change B. larger; increase C. smaller; decrease D. larger; decrease

d

The GDP deflator is a price index that includes the following components of GDP: A. Consumption B. Consumption plus Investment but not Exports C. Consumption, Investment plus Exports minus Imports D. Consumption, Investment, Government plus Exports minus Imports

d

The effects of inflation are seen in: A. goods and services only B. wages and income levels only C. services and wages only D. goods, services, wages and income levels

d

The nature of demand indicates that as the price of a good increases: A. suppliers wish to sell less of it. B. more of it is produced. C. more of it is desired. D. buyers desire to purchase less of it.

d

The opportunity cost of an action: A. can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action. B. can be determined by adding up the bills incurred as a result of the action. C. can be objectively determined only by economists. D. is a subjective valuation that can be determined only by the individual who chooses the action.

d

When Anders took out his first two-year membership with Maxima Gym in 2004, the fee was $540.00. He renewed his membership three times; in 2006 for $580.00, in 2008, for $600.00, and again in 2010, for $630.00. What is the overall rate of inflation for Anders' gym membership? A. 8.6% B. 5.4% C. 7.87% D. 16.66%

d

When quantity demanded decreases in response to a change in price: A. the demand curve shifts to the right. B. the demand curve shifts to the left. C. there is a movement down along the demand curve. D. there is a movement up along the demand curve.

d

Which of the following is not counted as a part of GDP? A. the purchase of 100 shares of AT&T stock by your grandfather. B. the purchase of a snow plough by the city of Minneapolis. C. the unsold additions to inventory at an appliances store D. the purchase of a loaf of bread by a consumer

d

_______________, which can be approximated by the growth of gross domestic product, ultimately determines the prevailing standard of living in a country. A. Trade balance B. Inflation C. Education D. Economic growth

d

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of: A. the supply curve. B. the demand curve, as consumers try to economize because of the shortage. C. both the supply and demand curves. D. the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.

a

According to the law of supply: A. there is a direct relationship between price and the quantity supplied. B. there is an inverse relationship between price and the quantity supplied. C. there is a direct relationship between price and quantity demanded. D. there is an inverse relationship between price and quantity demanded

a

Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market." A. The statement is correct. B. The statement would be correct if "quantity of wheat demanded" were substituted for "quantity of wheat supplied." C. The statement is incorrect because it confuses a change in quantity supplied with a change in supply. D. The statement would be correct if it read that a "decrease in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."

a

Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine: A. the equilibrium price will fall and the equilibrium quantity will fall. B. both the equilibrium price and quantity will rise. C. the equilibrium price will rise and the equilibrium quantity will decrease. D. the equilibrium price will rise, while the change to equilibrium quantity is indeterminate.

a

Marginal thinking is best demonstrated by: A. choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time. B. deciding to never purchase a coat made with animal skins or furs C. acquiring the information relevant to a choice before making that choice D. measuring all of the costs of a meal against all of the benefits when deciding whether to order a second milkshake

a

On April 1, 2009, in the middle of a recession, the government of the province of Ontario, Canada increased the provincial minimum wage from $8.75 to $9.50. What will the likely effect of this policy be? A. Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate. B. Low income workers will be better able to survive the recession at the new, higher wage rate. C. More people will be hired at the higher wage rate offsetting the effects of the recession. D. The higher wage will increase the supply of labor offsetting the effects of the recession.

a

Reginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered: A. out of the labor force. B. unemployed C. employed in the underground economy. D. underemployed

a

The ___________ is the only price where quantity demanded is equal to quantity supplied. A. equilibrium price B. horizontal axis intercept C. vertical axis intercept D. market price

a

The choice on a production possibilities set that is socially preferred, or the choice on an individual's budget constraint that is personally preferred, will display ___________. A. allocative efficiency B. the production possibilities frontier C. trade-offs D. scarcity

a

The marginal benefit of a slice of pizza is the: A. total amount that a consumer is willing to pay for a whole pizza, divided by the number of slices B. difference between the value of the slice to the consumer and the price of the slice. C. maximum amount that a consumer is willing to pay for the slice. D. price of the slice of pizza

a

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the budget constraint, sometimes also called the _______________, a diagram which shows what choices are possible. A. opportunity set B. consumption choice C. time value of money D. risk premium

a

The opportunity cost of attending university is likely to include all except which of the following? A. the cost of haircuts received during the school term B. the income you forgo in order to attend classes C. tuition fees D. the cost of required textbooks

a

The type of unemployment that occurs because of a recession is called: A. cyclical unemployment. B. the natural rate of unemployment. C. seasonal unemployment. D. frictional unemployment.

a

Which of the following statements is true? A. GDP includes spending on recreation and travel, but it does not cover leisure time. B. GDP does not include production that is exchanged in the market, but it does cover production that is not exchanged in the market. C. GDP does not include newly produced goods and services, but counts the buying and selling of previously existing assets D. GDP includes production that is not exchanged in the market

a

A change in price of a good or service typically causes ___________________________ for that specific good or service. A. a new equilibrium price B. a change along the supply curve C. the supply curve to shift D. a decreased demand

b

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: A. no change; only the supply curve for beef is likely to be affected. B. a shift of the demand curve for beef to the left. C. a movement down along the demand curve for beef to the right. D. a shift of the demand curve for beef to the right.

b

Are markets always in equilibrium? A. No, they never "settle down" into a stable price and quantity. B. No, but if there is no outside interference, they tend to move toward equilibrium. C. Yes, because very few things tend to alter supply and demand. D. Yes, they are always at the equilibrium point, or very close to it.

b

But nearly all supply curves share a basic similarity: they slope _______________. A. down from left to right B. up from left to right C. up from right to left D. down from right to left

b

GDP does not directly include: A. the value of goods produced domestically and sold abroad. B. the value of intermediate goods sold during a period. C. the value of services rendered during a period. D. the value of final goods and services produced, but not sold, during a period.

b

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is: A. nothing, because he enjoys playing basketball more than studying. B. the increase in skill he obtains from playing basketball for that hour. C. the benefit to his grades from studying for an hour D. nothing, because he had a free pass into the sports complex to play basketball.

b

Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then: A. exports exceed imports by $50 billion. B. imports exceed exports by $50 billion. C. imports exceed exports by $150 billion. D. exports exceed imports by $150 billion.

b

If a firm faces ________________________, while the prices for the output the firm produces remain unchanged, a firm's profits will increase. A. higher demand B. lower costs of production C. equilibrium D. a shift in demand

b

If imports exceed exports, as in recent years, then __________ exists. A. a trade surplus B. a trade deficit C. a trade imbalance D. trade disequilibrium

b

If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ___________________ A. excess supply B. excess demand C. ceteris paribus D. a price ceiling

b

In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income. A. budget constraint B. opportunity set C. utility D. production possibilities frontier

b

In macroeconomics, the connection from inputs to outputs for the entire economy is called ____________. A. a production function B. an aggregate production function C. human capital D. physical capital

b

In order to avoid double counting, statisticians just count the __________________. A. final inventories B. final goods and services C. intermediate goods and services D. durable goods and nondurable goods

b

Philosophers draw a distinction between ___________________, which describe the world as it is, and normative statements, which describe how the world should be. A. negative statements B. positive statements C. tradeoffs D. utilitarianism

b

The ____________ is the quantity where quantity demanded and quantity supplied are equal at a certain price. A. quantity demanded B. equilibrium quantity C. demand schedule D. supply schedule

b

The demand curve for a typical good has a(n): A. negative slope because some consumers switch to other goods as the price rises. B. negative slope because consumer incomes fall as the price of the good rises. C. negative slope because the good has less "snob appeal" as its price falls. D. inverse slope because as the price goes up, the good has more profitability.

b

The gap between exports and imports in a nation's economy is called the ___________. A. trade surplus B. trade balance C. trade deficit D. trade inventory

b

The leader of a federal political party made the following campaign promise: "My administration will increase national defense without requiring sacrifices elsewhere in the economy." The promise can be kept if: A. the economy moves along the production possibilities in the direction of a greater quantity of defense. B. the economy moves from a point inside the production possibilities curve toward a point on the production possibilities curve. C. the production possibilities frontier shifts outward due to an improvement in technology. D. either b) or c) occurs, but not as a result of a).

b

The lesson of __________ is to forget about the money that is irretrievably gone and instead to focus on the marginal costs and benefits of future options. A. marginal utility B. sunk costs C. marginal analysis D. budget constraints

b

The supply curve of textbooks (which are produced using paper made from trees) will shift to the left in response to: A. a decline in college tuition. B. a sharp increase in the demand for and construction of wood-frame homes. C. an increase in the supply of lumberjacks. D. an end to government regulations that limit timber harvesting in national forests.

b

The unemployment rate measures: A. the number of people unemployed divided by the number of people employed. B. unemployed workers as a percentage of the labor force. C. unemployed workers as a percentage of the population age over-sixteen. D. unemployed workers as a percentage of the population.

b

Which of the following would most likely shift the production possibilities curve inward? A. an increase in the number of hours factories are in use B. a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time C. an increase in the production of capital goods D. technological progress

b

A nation's prosperity is sometimes measured in terms of ___________. A. GNP B. GDP C. GDP per capita D. economic output

c

A straightforward example of a _______________, often used for simplicity, is the interest rate. A. price ceiling B. financial investment C. rate of return D. price floor

c

Attending college is a case where the ________________ exceeds the monetary cost. A. budget constraint B. marginal analysis C. opportunity cost D. marginal utility

c

Consumption in the United States is about ____________ of GDP, and it moves relatively little over time. A. 10% B. 33% C. 68% D. 90%

c

Country Alpha and Country Beta initially have the same real GDP per capita. Country Alpha experiences no economic growth, while Country Beta grows at a sustained rate of 5 percent. In 14 years, Country Alpha's GDP will be approximately _________ that of Country Beta. A. one-fourth B. one-half C. double D. triple

c

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________. A. income gap B. market equilibrium C. law of demand D. price model

c

If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages __________. A. will stay the same B. will decrease C. will increase D. may increase, decrease or stay the same depending on the relative slopes.

c

If the demand for software engineers __________ slower than does supply, then wages of software engineers will __________. A. increases; remain constant B. increases, rise C. increases; fall D. decreases; fall

c

If the unemployment rate is 8 percent, then this means: A. 8 percent of the population is unemployed B. 8 percent of the population age over sixteen is unemployed. C. 8 percent of the labor force is unemployed. D. the number of unemployed persons equals 8 percent of the employed persons.

c

India has a GDP of 23,000 billion Indian rupees, and a population of 1.1 billion. The exchange rate is 50 rupees per U.S. dollar. Calculate the GDP per capita of India as measured in U.S. dollars. A. $20.90 B. $20,909 C. $418 D. $4.18

c

Over the long run, ____________ per hour is the most important determinant of the average wage level in any economy. A. demand B. dollars C. productivity D. supply

c

Since the late 1950s, economists have performed "growth accounting" studies in the United States. These have determined that ________________ is typically the most important contributor to U.S. economic growth. A. human capital B. physical capital C. technology D. a market orientation

c

The difference between nominal GDP and real GDP is: A. nominal GDP measures actual productivity B. nominal GDP adjusts for inflation C. real GDP adjusts for inflation D. real GDP excludes imports and exports

c

The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases. A. quantity demanded, price B. quantity supplied, quantity demanded C. price, quantity demanded D. price, quantity supplied

c

When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________. A. the quantity demanded of financial capital at any given interest rate will remain unchanged. B. the quantity demanded of financial capital at any given interest rate will shift to the left. C. the quantity demanded of financial capital at any given interest rate will shift to the right. D. the quantity demanded of financial capital at any given interest rate will achieve equilibrium.

c

Which of the following is unlikely to affect the rate of economic growth? A. the quality of available resources B. the quantity of available resources C. the level of government spending D. technological change

c

Which of the following will not result in a leftward shift of the market demand curve for labor? A. a decrease in labor productivity B. a decrease in demand for the firm's product C. an increase in the wage rate D. a decrease in the firm's product price

c

A nation can achieve higher economic growth if: A. more resources are allocated to consumption goods. B. taxes are imposed on investment in capital. C. the productivity of labor declines. D. it devotes more resources to research and development.

d

GDP is: A. the sum of all currency and coins in circulation. B. the value of all final goods and services produced by a government. C. the value of all final good and services produced anywhere in the world by a nation's firms. D. the value of all final goods and services produced domestically.

d

In 1980 Denmark had a GDP of $70 billion (measured in U.S. dollars) and a population of 5.1million. In 2000, Denmark had a GDP of $160 billion (measured in U.S. dollars) and a population of 5.3 million. By what percentage did Denmark's GDP per capita rise between 1980 and 2000? A. 45.4% B. 219% C. 128% D. 120%

d

Increased investment alone will guarantee economic growth. A. This is a true statement, because growth occurs only with savings. B. This is a true statement, because money is the only resource needed for growth. C. This is a false statement, because an economy must rely on capital injections from abroad. D. This is a false statement, because economic growth hinges on the quality and type of investment as well as the human capital and improvements in technology.

d

Investment in human capital: A. is of minor importance to economic growth. B. can be acquired through on-the-job training. C. is an important source of economic growth. D. is characterized by both b) and c).

d

Scarcity exists because of: A. the market mechanism. B. specialization and division of labor C. the allocation of goods by prices D. unlimited wants and limited resources

d

Which of the following results in a rightward shift of the market demand curve for labor? A. a decrease in labor productivity B. a decrease in the firm's product price C. an increase in the wage rate D. an increase in demand for the firm's product

d