Eco final

Diminishing returns to physical capital implies that, when the human capital per worker and the state of technology remain fixed,each successive increase in physical capital leads to___ __productivity.

A smaller

Which item would not be included in this years GDP?

the purchase of your neighbor's house, which was built in 1994

If the exchange rate is ¥200 per U.S. Dollar, the U.S. price level is 129, and the Japanese price level is 600, then the real exchange rate is:

¥40

Examples of fiscal policy do NOT include:

reducing the interest rate by increasing the money supply.

An example of an intermediate good is:

steel purchased by the aircraft manufacturers

Assume the United States imposes a new tariff on wines imported from France. Who benefits from this action?

U.S. winemakers

An inflammatory gap will be eliminated because there is _____ pressure on wages,shifting the_____.

Upward; short-run aggregate supply curve to the left

What a country accumulates capital so that the quantity of capital per person increases, what do you expect to happen to wages?

Wages would rise because workers would become more productive.

What would likely happen if the amount of capital per worker grew?

Wages would rise because workers would become more productive.

A survey reveals that on a small island 40 people have jobs, 10 people are not working but are looking for jobs, and 30 people are neither working nor looking for work. The unemployment rate on the island is:

20%

Suppose that a panel of economists predicts that a nations real GDP per capita will double in approximately 20 years. According to the rule of 70, what must be the predicted annual growth rate of tea GDP? RULE OF 70 ( 70/20=3.5)

3.5%

Which statement about GDP is false?

GDP can be calculated by summing government spending and tax revenues

The aggregate production function does NOT depend on:

The amount of natiral resources.

Consider the market for iPads. What happens if a fantastic new alternative tablet is devolved by Samsung and, at the same time, a boat carrying a large shipment of iPads is attached by pirates and sunk?

The change in price is indeterminate and quantity decreases.

Consider the market for corn. What happens if there is an increased demand for corn tortillas and, at the same time, a new corn seed becomes available that dramatically increases the yield per acre?

The change in price is indeterminate;quantity increases

Money is neutral in____ since it cannot alter______.

The long run; real aggregate output

Suppose that supply increases and demand decreases. What is the most likely effect of price and quantity?

The price will decrease, but quantity may increase, decrease, or stay the same.

Real per capita GDP is:

real GDP divided by the population

If a country has a population of 1,000 people, an area of 100 square miles, and GDP of $5 million, then its GDP per capita is: ( 1,000/5,000,000)=

$5,000

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is____%.

10 % - FIND FORMULA

Raising taxes shifts the____curve to the____.

Aggregate demand; left

If the pound sterling appreciates against the dollar:

British exports have become more expensive but the price of U.S. exports to Britain has fallen.

If the economy is at potential output and the fee decreases the money supply so that actual output is less than potential output,eventually nominal wages will___ and short-run aggregated supply will.

Decrease; increase

Suppose the economy is operating in long-run equilibrium and a positive demand shock hits. We expect a short-run increase in real GDP and the price level and long-run____ in real GDP and____the price level.

Decrease; increase

A decrease in demand and a decrease in supply will lead to a(n)___ in equilibrium quantity and a(n) ____ in equilibrium price.

Decrease; indeterminate change

Other things equal,rising interest rates lead to a ____in investment spending and a ____in_____ spending.

Fall;fall;consumer

For a given technology and given labor force, labor productivity will be___ when the capital stock is—-

Higher;larger

The economy is in a recession. The desired Fiscal policy is a(n):

Increase government purchases of goods and services.

The value of a euro goes from US$1.25 to US$1.50. In the United States, exports will_____and imports will_____.

Increase, decrease

If the U.S. dollar appreciates in value relative to foreign currencies in other countries, then U.S. imports will ____ and exports will____.

Increase; decrease

If supply is upward sloping, an increase in demand, all other things unchanged, will result in a(n)_____ in equilibrium price and a(n)_____equilibrium quantity.

Increase; increase

If the economy is in equilibrium at Y 1 in panel (a) and government spending increases, the result will likely be:

Inflation

Countries that trade on the basis of comparative Advantage have___- than countries that do not.

More goods and services available to them.

Purchases of imported products are:

Not a part of the GDP calculation

In an economy whose aggregate real output is growing fast than the total population:

Real GDP per capita is rising.

An increase in capital stock would:

cause a movement to the right along a stationary production function.

Gross domestic product is defined as:

consumer spending + government purchases of goods and services + investment spending + exports - imports.

When a currency depreciates, the prices of its exports to other countries will:

decrease

Discouraged workers:

have given up looking for a job.

A positive demand shock leads to:

higher prices and higher employment.

When actual output is above potential output, over time:

nominal wages will increase, and the short-run supply curve will shift to the left.

A person who is NOT working or looking for work is:

not counted in the unemployment rate.

Investment spending is spending on:

productive physical capital

Productivity is equal to:

real GDP divided by the number of workers.