ECON Test #2

In​ general, the subsistence level​ ____________. A. is unique in each environment. B. does not apply in developed​ countries, such as the United​ States, that have high per capita incomes. C. is identical across all environments. D. declines as a country becomes wealthier.

A

Which factor is the most important contributor to growth in the United​ States? A. Number of hours worked per capita. B. Human capital ​(H​). C. Physical capital ​(K​). D. Technology ​(A​).

A (tech)

Using the concepts discussed in the​ chapter, which of the following is a reason that an economy experiences economic growth with a simultaneous increase in​ unemployment? A. Technological​ improvement, resulting in labor substituting for capital. B. An increase in government​ spending, resulting in a decrease in savings decisions of households. C. An increase in the marginal product of​ labor, resulting in a loss of labor productivity. D. Technological​ improvement, resulting in capital substituting for labor.

D

real GDP

y

agregate production function

y=f(k,h)

A​ country's gross domestic product would exceed its gross nationalnational product when the​ ____________. A. production of foreign​-owned factors operating in the domestic economy exceeds the production of domestically​-owned factors operating abroad. B. production of domestically​-owned factors operating abroad exceeds the production of foreign-owned factors operating in the domestic economy. C. amount of the national debt owed to foreigners is less than the amount of foreign debt owed to residents of the domestic economy. D. ​country's residents own more assets abroad than foreigners own in the domestic economy.

a

The national income accounting identity associated with the​ expenditure-based accounting method is represented by​ ___________. A. Y=C+I+G+X−M. B. C=Y+I+G+M−X. C. Y=X−M+I+G. D. Y=C+I+G+M−X. E. Y=C+I+G+X.

a

When government statisticians gather and analyze data on the purchases of goods and services produced in the domestic​ economy, they are measuring GDP using the​ ____________. A. expenditure​-based accounting method. B. production​-based accounting method. C. circular​ flow-based accounting method. D. income​-based accounting method.

a

Which of the following are not included in GDP but probably should​ be? ​(Check all that apply​.) A. home production B. transactions in the underground economy C. the value of externality D. the value of leisure

abcd

What policies can be used to raise real GDP in a​ country? ​(Check all that apply​.) A. Improve efficiency in the allocation of resources. B. Increase technology. C. Lower income per worker. D. Raise physical and human capital. E. Reduce the amount of investment spending in​ R&D.

abd

What are the two components of​ technology? ​(Check only two​.) A. The knowledge of how to produce new products. B. The need for more workers to produce more complex goods. C. A more efficient means of production. D. The enablement of globalization and the ability to use​ low-cost workers.

ac

To generate estimates of gross domestic product​ (GDP), the Bureau of Economic Analysis must aggregate a variety of data​ sources, such as expenditure surveys. Which of the following are likely to be problems while estimating​ GDP? ​(Select all that​ apply). A. Measuring physical depreciation of capital B. Measuring net exports C. Measuring consumption by households D. Measuring​ black-market production

ad

If the level of aggregate expenditure was​ $16.8 trillion in​ 2013, the level of aggregate income in the economy during 2013 was​ ___________. A. less than​ $16.8 trillion because the United States imports more than it exports. B. also​ $16.8 trillion because of the identity between aggregate expenditure and income. C. more than​ $16.8 trillion because transfers​ (entitlements) allow income to exceed aggregate expenditure. D. less than​ $16.8 trillion because taxes will reduce income below aggregate expenditure.

b

In its quarterly​ estimates, the Bureau of Economic Analysis uses both​ expenditures-based and​ income-based accounting; to differentiate between the​ two, it refers to the​ expenditures-based estimate as GDP and the​ income-based estimate as GDI. Which of the following shows the expected relationship between GDP and​ GDI? A. GDP is twice of GDI. B. GDP is equal to GDI. C. GDP is half of GDI.

b

Which of the following pieces of information are needed for national income​ accounting? ​(Select all that​ apply). A. The government would need information on the quantities produced and sold in an underground economy. B. The government would need information on all​ sales, including the size of all inventories in every company. C. The government would need information on both quantities produced and market​ prices, for every good produced in an economy. D. The government would need information on the spillover cost of an economic activity on society.

bc

Which of the following will be considered a final good in the calculation of U.S.​ GDP? ​(Check all that apply​.) A. Processors manufactured in California for Apple's new range of laptops. B. Defense equipmentDefense equipment purchased by the federal government C. Canned foodsCanned foods purchased by a grocery store. D. Foot massagesFoot massages at spasspas in California.

bd

A​ firm's value added refers to the dollar value of​ ____________. A. a​ firm's total sales revenue. B. the intermediate products a firm buys from other producers. C. a​ firm's sales revenue minus the​ firm's profits. D. a​ firm's sales revenue minus the​ firm's purchases of intermediate products from other firms.

d

What is the key difference between the Consumer Price Index​ (CPI) and the GDP​ deflator? A. The formulas used to construct the indexes bear little resemblance to each other. B. The GDP deflator includes​ imports, while the CPI only includes domestically produced goods and services. C. The CPI is broader in coverage than is the GDP deflator. D. The two indexes measure price changes for different​ "baskets" of products.

d

When government statisticians gather and analyze data on the income of various agents in the domestic​ economy, they are measuring GDP using the​ ____________. A. expenditure​-based accounting method. B. production​-based accounting method. C. circular​ flow-based accounting method. D. income​-based accounting method.

d

physical capital stock of the nation

k

GDP at purchasing power parity​ (PPP) takes into account variations in

living costs

GDP per capita in PPP is the most useful for comparing

living standards

The​ nation's ports are examples of __________________ ​, which contributes to economic growth.

physical capital

any good, including machines and buildings

physical capital

The effect of foreign investments on the poverty rate will depend on the

redistribution of income among the poor segments of society

Which factors explain economic growth in the United States over the past few​ decades? ​(Check all that apply.​) A. Physical capital ​(K​). B. An increase in the saving rate ​(S​). C. Human capital ​(H​). D. Technology ​(A​).

KHA

Holding all other factors​ constant, the Law of Diminishing Marginal Product states that​ ____________. A. the marginal contribution of labor decreases as the quantity of labor used in production increases. B. the marginal contribution of labor increases as the quantity of labor used in production increases. C. the aggregate contribution of labor increases as the quantity of capital used in production increases. D. the marginal contribution of labor increases as the quantity of capital used in production increases

A

The Human Development Index measures​ ____________. A. living standards across various countries. B. the amount of ethnic welfare and disease in​ third-world countries. C. the relative lifespan and education in​ third-world countries. D. how fairly income is distributed across countries.

A

The saving rate in an economy is defined as the​ ____________. A. fraction of total income that households save. B. fraction of total income that households invest. C. level of total income that households save. D. rate of private saving minus the rate of government​ spending, G.

A

When technology​ improves, holding all else​ constant, an economy can produce​ ___________. A. more output with the same number of​ inputs, and GDP will increase. B. more output but at a higher​ cost, and GDP will remain constant. C. as much output as it wants as long as its human capital increases at the same time. D. This cannot be​ determined, as the amount of output produced depends more on having a large physical capital stock.

A

Which of the following countries will be better off in the long​ run? A. Country A with ​$1 comma 0001,000 annual GDP per capita and a 66 percent annual growth rate. B. Country B with ​$5 comma 0005,000 annual GDP per capita and a 22 percent annual growth rate. C. Country C with ​$40 comma 00040,000 annual GDP per capita and a 11 percent annual growth rate. D. Country D with ​$60 comma 00060,000 annual GDP per capita and a 0.10.1 percent annual growth rate.

A

Factors that help households decide whether to consume or save their income are​ ___________. ​(Check all that apply.​) A. expectations about taxes. B. the interest rate. C. expectations of future income growth. D. expectations of the​ nation's investment needs.

ABC

An example of​ catch-up growth is​ ____________. A. Kenya, which has managed to maintain a steady growth rate over the last 50 years. B. South​ Korea, which by 1970 had become poorer relative to the United​ States, but over the last 40 years grew faster than the United​ States, closing the gap that had opened up previously. C. the change France made in 2008 by eliminating the​ 35-hour work​ week, which allowed workers to put in more hours and therefore earn more. D. when you move your money from a bank account earning 2 percent simple interest to one that earns 2 percent compounded interest.

B

Before​ 1800, a pattern developed showing that increases in aggregate income led to an expanding​ population, which in turn reduced income per capita and put downward pressure on the population. This pattern is known as the​ ___________. A. demographic transition. B. Malthusian cycle. C. fertility cycle. D. poverty cycle.

B

Does an increase in GDP per capita of a nation imply that all its citizens have become​ richer? A. ​Yes, because an increase in the average income per capita means that purchasing power parity​ (PPP) has also​ increased, making all citizens richer. B. ​No, because the average income per capita of a nation is not the same as the income of each individual in that nation. C. ​Yes, but only if the average is above the poverty level of​ $1.25 per day. D. ​No, because the average income per capita does not give as good a measure as the purchasing power parity​ (PPP) of the average citizen in a nation.

B

Factors of production are the​ ____________. A. resources needed to produce new technology. B. inputs used to produce other goods and services in an economy. C. inputs that are used to redistribute income and thus reduce inequality. D. items needed to reduce income inequality

B

Given that saving can be thought of as future​ consumption, which of the following would not increase the saving​ rate? A. An expected increase in interest rates B. Expected growth in personal income C. Expected college expenses D. An expected increase in taxes

B

Given the information​ above, which of the following is likely to happen as a result of this demographic​ shift? A. The purchasing power of workers will increase. B. Income per capita will decline with a decrease in the workforce and its productivity. C. The income inequality in society will decrease.

B

Household saving decisions impact investment in the economy by having​ ___________. A. very little impact on​ investment, as banks are primarily involved with investment. B. a direct impact on​ investment, as saving is correlated with investment. C. a direct impact on​ investment, as saving is inversely correlated with investment. D. no impact on investment in the economy.

B

Imagine every technology company in the United States suddenly made their code open source. Which of the following outcomes is likely to occur in this​ scenario? A. It would cause the developing countries to experience exponential growth in the short run. B. It would not necessarily boost economic growth immediately in developing countries because the technologies of foreign economies may not be immediately useful. C. It would boost the gross domestic product of developing countries because the​ open-sourced code would be available​ off-the-shelf and could directly reach consumers. D. It would cause the developing countries to experience​ catch-up growth in the short run.

B

In the book​ "Dead Aid," economist Dambisa Moyo argues that humanitarian​ aid-provision of food or medicine to poor​ families, for​ example-is an ineffective tool for promoting growth in the developing world.​ Instead, she argues in favor of foreign aid policies that​ encourage/subsidize foreign investments in the businesses of developing countries. Which of the following will be the​ short-term and​ long-term effects of foreign investments on aggregate​ growth? A. In the short​ run, the productivity of workers and the GDP per capita of an economy will​ increase, while in the long​ run, there will be a decline in the GDP per capita. B. In the short​ run, the productivity of workers and the GDP per capita of an economy will​ increase, while in the long​ run, the effect on the GDP per capita of the economy will depend on the productivity enhancing investment. C. In the short​ run, the productivity of workers and the GDP per capita of an economy will​ decrease, while in the long​ run, the impact of foreign investment will be ambiguous. D. In the short​ run, the productivity of workers and the GDP per capita of an economy will​ increase, while in the long​ run, the effect on the GDP per capita of the economy will not depend on the productivity enhancing investment.

B

Suppose that country A has higher real income per capita than country B. Explain why this does not imply that most citizens of country A have higher real income than most citizens of country B. A. The higher per capita income in country A could be the result of most citizens there having unearned income. B. A high degree of income inequality in country A may result in most of its citizens having incomes below the average income of country C. Most citizens in country B may be​ employed, while the majority of those in country A may not work. D. All of the above are plausible.

B

Suppose you are comparing the income per capita in the United States and Ghana. You try two approaches. In the first​ approach, you convert the Ghana values into U.S. dollars using the current exchange rate between the U.S. dollar and the Ghanaian cedi. In the second​ approach, you also convert both values to U.S. dollars using the purchasing power​ parity-adjusted exchange rate. Which approach is likely to give you a more accurate picture of the living standards in both​ countries? A. The first​ approach, because the United States is the​ world's leader and the dollar is the global reserve currency. B. The second​ approach, because it takes into account the relative costs for each country. C. The second​ approach, because​ it's the total dollars that matter. D. The first​ approach, because​ it's the total dollars that matter.

B

Sustained growth is the​ ____________. A. type of growth that occurs when growth is compounded on the rate of growth in the prior period of measurement. B. process where GDP per capita grows at a positive and relatively steady rate for long periods of time. C. pattern of growth that occurs when workers in relatively poorer nations work extra hours so that their GDP per capita catches up with more advanced nations. D. process by which relatively poorer nations increase their incomes by taking advantage of the knowledge and technologies already invented in other technologically advanced nations.

B

All of the following are factors in determining the subsistence level of an economy except​ ____________. A. shelter. B. calories. C. air. D. clothing.

C

Exponential growth is the​ ____________. A. growth rate that grows at an exponential rate greater than one​ (that is, g Superscript ngn​, where n​ > 1). B. rate differential between growth in a baseline period and growth in the current period. C. process by which new growth builds on past​ growth, leading to a​ (roughly) constant growth rate. D. process by which the growth rate in the economy increases each year by a​ (roughly) constant rate.

C

If you were trying to improve macroeconomic growth and lower poverty rates in the developing​ world, which of the following would you encourage the U.S. government to​ fund? A. A program that aims at improving growth in the urban areas of society. B. A program that aims at stabilizing the aggregate growth rate of an economy in the long run. C. A mix of​ well-targeted programs that improves the productivity and provides financial aid to poor segments of the population.

C

In a closed economy without government​ spending, all income must be​ ____________. A. ​invested; therefore, GDP is equal to the sum of aggregate saving and investment. B. ​consumed; therefore, GDP is equal to the sum of aggregate consumption and investment. C. consumed or​ saved; therefore, GDP is equal to the sum of aggregate consumption and investment. D. consumed or​ saved; therefore, GDP is equal to the sum of aggregate saving and investment.

C

In the second half of the twentieth​ century, Japan experienced exceptional growth. According to World Bank​ data, in​ 1985, Japan's GDP was​ $3.67 trillion, and its annual growth rate was 6.33 percent. The GDP in this problem is in constant 2010 dollars. Assuming an exponential annual growth rate of 6.33​ percent, Japan's projected GDP in 2010 was ​$17.0217.02 trillion.​ (Round your answers to two decimal​ places.) In​ fact, Japan's 2010 GDP was​ $5.7 trillion. Which of the following reasons could explain any discrepancy between this number and your answer to the previous​ part? A. The discrepancy might have occurred because of the paradox of thrift.​ Japan's initial​ post-war growth may have been​ low, but it increased in later years. B. The discrepancy might have occurred because of the increasing marginal propensity to save.​ Japan's initial savings were high​ post-war, but it reduced in later years. C. The discrepancy might have occurred because of the​ catch-up effect.​ Japan's initial​ post-war growth may have been​ high, but it declined in later years. D. The discrepancy might have occurred because of the sudden decrease in population.​ Japan's population decreased​ post-war, but it increased in later years.

C

The Industrial Revolution affected economic growth​ ____________. A. because better drugs and basic sanitation improvements allowed workers to improve their knowledge base and increase efficiency and​ productivity, increasing the marginal product of labor and therefore overall economic growth. B. through the demographic​ transition, whereby families sustained lower fertility rates and broke the Malthusian cycle that kept per capita income close to subsistence levels. C. because technological​ changes, such as new machinery and new methods of​ production, became more systematic and​ pervasive, underpinning economic growth. D. by replacing the agricultural underpinnings of most economies with an urban​ one, which allowed children to go to school more easily and therefore increased human capital.

C

The Industrial Revolution had a positive impact on living standards​ __________. A. by eliminating the impact of diminishing marginal returns at most levels of​ production, shifting the production curve upward. B. because as capital​ depreciated, it needed to be​ replaced, which created an increase in​ production, shifting the production curve upward. C. because of the introduction of new capital and technology that shifted the production curve upward. D. with the transition from agriculture to​ industry, which allowed people to rely less on child​ labor, it created incentives for smaller families and thus increased per capita income and living standards.

C

The aggregate production function describes the relationship between the​ ____________. A. amount of discrimination and the level of income inequality. B. level of income inequality and the national fairness index. C. aggregate GDP of a nation and its factors of production. D. gender pay gap and the growth of GDP per capita.

C

The subsistence level is the​ ___________. A. maximum level of saving that keeps consumption at the optimal rate. B. rate at which an economy grows that keeps income per capita stable. C. minimum level of income per person that is generally necessary for an individual to survive. D. minimum level of the saving rate that is necessary to maintain the current level of physical capital.

C

There was no sustained growth in living standards prior to the Industrial Revolution because​ __________. A. with income below the subsistence​ level, as was common prior to the Industrial​ Revolution, people​ starved, which prohibited growth. B. with output increasing at a decreasing​ rate, the level of per capita output will start to​ decrease, leading to a decrease in living standards. C. with output increasing at a decreasing​ rate, it is not possible to increase living​ standards, especially as the population continues to grow. D. the transition from agriculture and rural areas toward industry and city areas did not occur until after the Industrial​ Revolution, and it was only this urbanization that allowed increases in living standards.

C

Using the concepts discussed​ above, which of the following statements is true of​ inequality? A. Inequality is likely to decrease in an economy if the technological improvement allows capital to substitute for labor. B. Inequality is likely to be unaffected in an economy as technological improvement historically benefits everyone equally. C. Inequality is likely to increase in an economy if the jobs lost due to technological improvement are​ low-skilled jobs.

C

Why was there no sustained economic growth before modern​ times, that​ is, before​ 1800? ​(Check all that apply.​) A. There were no national income or product accounts and so there was no way to accurately measure the economy. B. People could not easily survive in the subsistence level. C. The pace of technological change was much slower than in modern times. D. Increases in aggregate income were offset by increases in​ population, keeping per capita income low.

CD

According to U.S. census​ projections, the percentage of U.S. citizens over the age of 65 will increase from​ 14.9% in 2015 to​ 22.1% in​ 2050, due, in​ part, to both prolonged life expectancy and declining fertility rates. Given the information​ above, which of the following will likely be an effect of such a demographic​ shift? A. The marginal propensity to consume will increase because income per capita will decrease. B. The marginal propensity to save will increase because income per capita will decrease. C. The productivity of labor will decrease because the workers may be more qualified overall. D. The productivity of labor will decrease because workers become less productive as the workforce ages

D

An example of sustained growth is​ ____________. A. Kenya, which has managed to maintain a steady growth rate over the last 50 years. B. the Democratic Republic of​ Congo, which despite a negative growth rate at​ times, has shown mainly steady growth. C. the steady increase in the saving rate in countries such as China and the United Kingdom. D. the United​ States, which demonstrated sustained growth between 1820 and 2007.

D

Economists Andrew McAfee and Erik Brynjolfsson have written about​ "The Great​ Decoupling"-the divergence between productivity growth and employment. Since the​ mid-1990s, labor productivity and GDP have continued to​ increase, while employment and wages have remained stagnant. Using the concepts discussed in the​ chapter, which of the following reasons would explain an increase in productivity and GDP at a given level of​ employment? A. Population growth. B. An decrease in the physical capital stock. C. An increase in the marginal propensity to save. D. Technological improvement.

D

Holding all else​ equal, will increasing the efficiency units of labor lead to sustained​ growth? Why? A. Yes, although it will lead to sustained growth only if individuals learn the correct skills as determined by the type of physical capital available. B. Probably, because although there is diminishing marginal product of​ labor, there are not diminishing returns to education or skills attainment. C. No, because with diminishing marginal product of physical​ capital, there is a limit to the amount of work an individual can do. D. Not​ likely, because each individual has a finite life and there is a limit to the number of years of schooling that an individual can obtain.

D

Households play a role in physical capital accumulation because​ ____________. A. households provide the human capital that produces the physical capital. B. the interest rate on investment is determined by households. C. the population growth rate determines the number of efficiency units of labor and therefore output. D. it is households that determine their level of consumption and therefore the rate of saving.

D

Increasingly, independent programmers are making their code​ "open source." The statistical programming language​ ?R,? for​ example, is completely free and​ open; anyone can submit a new package of specialized functions. Which of the following would explain the impact of open source technology on growth in developing​ countries? A. ​Open-source technology makes​ productivity-enhancing tools unavailable to a major section of the​ population, thereby reducing growth in developing countries around the world. B. ​Open-source technology increases the income of​ low-skilled workers, which results in an increase in economic growth in developing countries. C. ​Open-source technology lowers the efficiency of​ high-skilled employees, which results in a decrease in growth in developing countries around the world. D. ​Open-source technology makes​ productivity-enhancing tools available to a broader group of​ people, thereby increasing growth in developing countries around the world.

D

Physical capital accumulation is driven by​ ____________. A. the marginal product of capital. B. the growth rate of GDP. C. government purchases. D. investment.

D

Productivity is​ ____________. A. an indicator of how hard workers apply themselves to their tasks. B. the value of profit divided by the number of production workers. C. a measure of the speed with which inputs can be transformed into products. D. the value of output that a worker generates for each hour of work.

D

Productivity varies across countries because​ ___________. A. the quantity of physical capital that workers can access varies greatly across countries. B. the level of technology differs across countries. C. human capital per worker varies substantially from country to country. D. all of the above. E. A and B only.

D

The Malthusian cycle​ ___________. A. has its roots in the demographic transition​ post-1800. B. was common between the time of the Industrial Revolution and the Great Depression. C. primarily impacted economies during the Great Depression. D. was common prior to the Industrial Revolution.

D

The correlation between this index and real income per capita in a country is​ ____________. A. a positive association is apparent but only for​ high-income economies. B. the correlation between this index and real income per capita is weakly negative. C. no discernable association exists between this index and income per capita. D. countries with higher real income per capita tend to have higher levels of this index.

D

​Catch-up growth is the​ ____________. A. type of growth that occurs when growth is compounded on the rate of growth in the prior period of measurement. B. pattern of growth that occurs when workers in relatively poorer nations work extra hours so that their GDP per capita catches up with more advanced nations. C. process where GDP per capita grows at a positive and relatively steady rate for long periods of time. D. process by which relatively poorer nations increase their incomes by taking advantage of the knowledge and technologies already invented in other technologically advanced nations.

D

A​ country's gross national product would exceed its gross domestic product when the​ ____________. A. production of domestically-owned factors operating abroad exceeds the production of foreign​-owned factors operating in the United States B. production of foreign-owned factors operating in the United States exceeds the production of domestically-owned factors operating abroad. C. amount of the national debt owed to foreigners is less than the amount of foreign debt owed to residents of the domestic economy. D. ​country's residents own more assets abroad than foreigners own in the domestic economy.

a

National income accounting is​ ____________. A. a system of accounts designed to measure aggregate economic activity in a country. B. a system used by tax accountants to calculate the tax liabilities of transnational corporations. C. an accounting system used by businesses to calculate their profits during a given production period. D. used by international organizations such as the World Bank to determine individual country assessments​ (fees).

a

Which one of the sets of terms given below would correctly complete the following definition of​ GDP? "Gross Domestic Product is the​ ____ value of the​ ____ goods and services produced​ _____ of a country during a particular period of​ time." A. ​market; final; within the borders. B. ​intrinsic; final; within the borders. C. ​market; final; by the resources. D. ​social; final and​ component; by the resources.

a

Productivity varies across countries because of differences in​ ____________. ​(Check all that apply​.) A. technology. B. physical capital. C. human capital. D. GDP. E. income.

abc

The diagram shows​ ____________. ​(Check all that apply​.) A. the aggregate production​ function, holding total efficiency units of labor constant. B. both the capital stock and the marginal product of labor rise accordingly when there is lower income inequality. C. both the increasing relationship between capital and output and the law of diminishing marginal product. D. the higher the capital​ stock, then the lower the likely amount of GDP per capita.

ac

Using the​ information, which of the following factors is responsible for the discrepancy between GDP and​ GDI? A. Depreciation of capital is accounted for in GDP but not in GDI. B. Net exports are accounted for in GDP but not in GDI. C. Underground economies are accounted for in GDP but not in GDI.

b

When government statisticians gather and analyze data on the value added by the firms in the domestic​ economy, they are measuring GDP using the​ ____________. A. expenditure​-based accounting method. B. production​-based accounting method. C. circular​ flow-based accounting method. D. income​-based accounting method.

b

Which of the following news stories​ (all published in early​ 2014) would typically be studied in​ macroeconomics? ​(Select all that apply​.) A. ​"5 Reasons Why Apple is Looking Like the Next​ Sony" B. ​"We Believe Inflation Should Rule Monetary​ Policy." C. ​"Which Collegelong dash—and Which Majorlong dash—Will Make You​ Richest." D. ​"Expectations High for March​ Employment." E. ​"What If Economic Growth Is No Longer​ Possible?"

bde

Which one of the following is not in the circular flow diagram as one of the three systems of GDP​ measurement? A. Income is shown as a flow from the firm sector to the household sector. B. Production is shown as a flow from the firm sector to the household sector. C. Taxes are shown as a flow from the private sector to the public sector. D. Expenditure is shown as a flow from the household sector to the firm sector.

c

​Production-based accounting is used to estimate GDP by​ ____________. A. summing each​ firm's value added to the production process. B. adding up the incomes received by all the resources that contributed to production. C. computing for each firm the difference between sales revenue and the purchase of intermediate​ products, then summing this difference across all firms. D. all of the above. E. A and C only.

e

Items are classified as final goods only if they are the _______________ in a chain of production.

end product

Sam​ Walton, the founder of​ Walmart, is an example of the power of __________________ ​, which creates economic growth.

entrepreneurship

relationship between variables

f

efficiency units of labor used in production

h

Your university or college is an example of ____________________ ​, which contributes to economic growth

human capital

each person's stock of skills to produce output or economic value

human capital

During a​ recession, the unemployment rate ____________ and aggregate growth ________________. If population remains constant but aggregate income​ falls, income per capita will __________________.

rises, decreases, decrease

New developments that enable natural gas and oil fracking are examples of ____________________ ​, which contribute to economic growth.

technology

the ability to use labor and capital more efficiently

technology

PPP attempts to work out how much currency will be needed to buy ____________ quantity of goods and services in different countries.

the same