Econ 1000 KSU
13. ___________________ refers to a general decrease in the level of overall prices. A. Inflation B. Hyperinflation C. Deflation D. The Law of Demand
C
10. Gross Domestic Product can be expressed by the following formula: __________. A. Y = C + I + G + NX B. Y = MX + B C. Y = (C)(I) + (G)(NX) D. Y = (C - I)(G - NX)
A
12. Based upon the current values of "life expectancy at birth" for different countries around the world which were discussed in lecture, A. life expectancy at birth in the U.S. (79.56 years) is neither the longest nor the shortest life expectancy in the world. B. countries around the world typically fall into one of two categories - "long life span countries" (those with life expectancies above 80 years, which account for about 37% of countries worldwide) and "short life span countries" (those with life expectancies below 40 years, which account for 55% of countries worldwide) - with very few countries (only 8%) realizing life expectancies between 40 and 80 years. C. life expectancy at birth is lowest in "capitalist societies" (such as New Zealand (54.28 years), Singapore (59.82 years), and Hong Kong (60.36 years)), as a result of big business exploiting labor and "working people to death." D. More than one (perhaps all) of the above answers is correct.
A
12. Consider the market for oranges. If there is "excess demand" at a price of $2.35, then the equilibrium price must be: A. above $2.35. B. exactly equal to $2.35. C. below $2.35. D. None of the above answers are correct (since more information is needed to answer this question).
A
15. _______________ refers to the tendency for wealthy people in poor countries to invest their financial resources abroad instead of at home A. Capital flight B. The brain drain C. The vicious-cycle-of-poverty D. Crony Capitalism
A
16. The value of the "Misery Index" in the U.S. in December 2015 was A. 5.73, below the post-January 1948 mean value of 9.40. B. -1.91, the first time ever that any country has realized a negative value. C. 7.15, slightly above the post-January 1948 mean value of 6.98. D. 23.49, the highest realized value post-January 1948.
A
19. In a free market, the equilibrium quantity of trade and equilibrium price of a good are determined by A. the interaction of both self-interested buyers and self-interested sellers in the marketplace. B. only the buyers in the market. C. only the sellers in the market.
A
20. ________ is the value of GDP computed using prices from an arbitrary base year. A. Real GDP B. Nominal GDP C. Real GDP Per Capita D. Imaginary GDP
A
21. The Basic Circular Flow Diagram builds upon the Preliminary Circular Flow Diagram by A. adding an illustration of the movement of money between households and firms, which facilitates the voluntary transfer of economic resources. B. adding an illustration of how equilibrium price and quantity are each determined in a market. C. adding an illustration of the role of government in collecting taxes from firms and households. D. deleting the illustration of the role played by firms in the economy.
A
25. ___________________ provides a measure of the total value of all final goods/services produced within an economy in a given period of time, with all goods/services valued according to current period prices, whereas ___________________ provides a measure of the total value of all final goods/services produced within an economy in a given period of time, with all goods/services valued according to a single set of common prices from an arbitrary base year. A. Nominal GDP; Real GDP. B. Real GDP; Nominal GDP. C. Nominal GDP Per Capita; Real GDP Per Capita. D. GNP; GNR.
A
28. Consumption Expenditures are defined as A. purchases of newly produced goods/services by households. B. purchases of newly produced goods/services by firms. C. purchases of newly produced goods/services by local, state, and federal governments. D. goods/services produced in a foreign country and purchased by residents of the home country.
A
4. The vicious-cycle-of-poverty A. suggests that poverty is self-perpetuating, because poor countries do not have sufficient resources available to make the investments in capital which are necessary for economic growth. B. is apparently true, since every country that was poor a century ago is still poor today. C. has no merit whatsoever, since even poor societies typically have an overabundance of financial capital. D. More than one (perhaps all) of the above answers is correct.
A
5. Supply A. refers to the entire relationship between the price of a good and the number of units that firms are willing and able to sell, all other factors fixed. B. refers to the amount of a good that firms are willing to sell at the equilibrium price. C. provides a summary of the behavior of buyers in a market. D. More than one (perhaps all) of the above answers is correct.
A
8. The "Misery Index" A. is an economic indicator created by Arthur Okin. B. is computed by multiplying the unemployment rate by the inflation rate. C. measures the fraction of population that is clinically depressed. D. More than one (perhaps all) of the above answers is correct.
A
9. Between August 2014 and August 2016 there was an increase in both price and quantity traded of corn. This change in market equilibrium outcome would result from A. an increase in Demand. B. a decrease in Demand. C. an increase in Supply. D. a decrease in Supply.
A
consumption expenditures investment expenditures government purchases imports exports $897 $212 $335 $196 $234 17. For this country, "net exports" are equal to A. $38 million. B. $234 million. C. $430 million. D. $1,874 million.
A
0 1,850 3,700 5,150 15. In equilibrium _______ hats will be traded, each at a price of _____ . A. (5,150); ($17.75). B. (3,700); ($12.00). C. (1,850); ($7.50). D. None of the above answers are correct.
B
1. Suppose that "County Z" were to realize a constant GDP Growth Rate of 4% per year. It follows that Real GDP would double in roughly ________ years. A. 4 B. 18 C. 25 D. 72
B
10. Economic Growth is A. simply a result of whether or not a country has access to natural resources (and is therefore simply determined by "chance" or "nature"). B. defined as a sustained increases over time in a society's value of real GDP. C. visually illustrated by an inward shift of the Production Possibilities Frontier. D. More than one (perhaps all) of the above answers is correct.
B
10. __________________ refers to someone who organizes, manages, and assumes the risks of a firm, taking a new idea or a new product and turning it into a successful business. A. An Invisible Hand B. An Entrepreneur C. A Central Planner D. A Social Surplus
B
12. Maurice is a citizen of Canada, but lives, works, and attends college in the United States. Last year he went on vacation to Mexico during Spring Break. He works at a daycare in Roswell, GA. Last year he provided "daycare services" valued at $21,250. The value of these services would be included in the calculation of GDP for A. only Canada, since he is a Canadian citizen. B. only the United States, since that is where the production took place. C. only Mexico, since that is where he went to relax on vacation (which was a necessary activity for him to be able to work hard in school and on the job throughout the rest of the year). D. None of the above answers are correct.
B
13. Around the time of the Cuban Revolution in 1953, Real Per Capita GDP in Puerto Rico and Cuba were roughly equal to each other (standing at about $2,000). By 2008, Real Per Capita GDP was ________ in Cuba and ________ in Puerto Rico. A. $1,986; $1,874. B. $3,746; $15,074. C. $34,281; $33,528. D. $41,711; $22,396.
B
13. In a "free market economy" profits A. refer to the "gain" that a buyer gets from purchasing a good/service. B. serve as a "signaling device," directing resources to their most valued uses. C. are only earned by firms who exploit workers. D. More than one (perhaps all) of the above answers is correct.
B
14. Last weekend Brenda won $1,500 at a casino in Biloxi, Mississippi. She decided to use the money to purchase a new TV from Walmart. She was able to use the money to acquire the new TV since money serves as a A. contract. B. medium of exchange. C. store of value. D. unit of account.
B
14. _____________________ refers to the production of goods and services, valued in each period according to current period prices. A. Hyperinflation B. Nominal GDP C. Real GDP D. Real GDP per capita
B
16. In this market there would be ____________ at a price of $9.75. A. excess supply B. excess demand C. neither excess demand nor excess supply. D. both excess demand and excess supply.
B
18. A "seller's reservation price" A. refers to the maximum dollar amount a buyer is willing to pay for an item. B. refers to the minimum dollar amount a seller is willing to accept in exchange for an item. C. is visually illustrated by the vertical distance between the demand curve and the supply curve. D. More than one (perhaps all) of the above answers is correct.
B
18. For this country, Gross Domestic Product is equal to A. $897 million. B. $1,482 million. C. $1,678 million. D. $1,874 million.
B
2. Which markets are represented in the Basic Circular Flow Diagram? A. Markets for "Imports and Exports" and markets for "Factors of Production." B. Markets for "Goods and Services" and markets for "Factors of Production." C. Markets for "Financial Assets" and markets for "Imports and Exports." D. Markets for "Goods and Services" and markets for "Financial Assets."
B
22. The height of the demand curve at a particular quantity illustrates A. seller's reservation price for that unit. B. buyer's reservation price for that unit. C. magnitude of excess demand at the market equilibrium. D. spontaneous order.
B
3. The "Catch-up effect" suggests that, all other factors fixed, A. the global economy is "rigged against new entrants," in that there is no way for poor countries to catch-up with rich countries. B. growth rates of less developed countries typically exceed growth rates of developed countries, implying that the gap in GDP between less developed and developed countries will decrease over time. C. whenever a countries experiences rapid growth in GDP, they must also experience an increase in income inequality. D. the only way for firms in high tech industries to catch-up to their competitors is to invest large amounts of resources in research and development.
B
4. Suppose that a country had imports of $789 million and exports of $967 million in 2011. It follows that this country A. had net exports of -$178. B. ran a trade surplus. C. ran a trade deficit. D. More than one (perhaps all) of the above answers is correct.
B
5. Which of the following countries had a negative Annual Inflation Rate in 2015? A. Argentina. B. Finland. C. The United States. D. Zimbabwe.
B
6. ________________ refers to an environment in which well-connected unscrupulous business people use corrupt political systems to their advantage in order to obtain preferential treatment from government. A. Rule-of-Law B. Crony Capitalism C. Economic Development D. The Catch-Up Effect
B
7. In 2015 there were ________ deaths from malaria world-wide, with _____ of these occurring in Africa. A. 17; 12. B. 438,000; 90%. C. 10.7 million; 100%. D. None of the above answers are correct (since malaria was eradicated in 2009).
B
7. Privately owned enterprises in a free market economy have a primary goal of A. exploiting workers. B. earning as large of a profit as possible. C. tricking consumers into thinking that they are "environmentally conscious." D. More than one (perhaps all) of the above answers is correct.
B
8. An increase in income will result in a decrease in demand for _______________. A. a normal good B. an inferior good C. a substitute good D. a complementary good
B
8. ________________ broadly refers to the knowledge, education, skills, experience, work ethic, inter-personal skills, and other attributes which determine worker productivity. A. Physical Capital B. Human Capital C. Worker Mortality D. Technology
B
9. Consider a country with a population of 3,485,000 people and real GDP of €88.132 billion. It follows that real GDP per capita A. is also equal to €88.132 billion. B. is roughly equal to €25,289. C. is roughly equal to €307,140,020. D. cannot be determined from the given information.
B
1. Which of the following could NOT result in a "Change in Supply" for "MP3 Players"? A. An improvement in the technology used to produce MP3 Players. B. A decrease in the price of plastic (an input used in the production of MP3 Players). C. An increase in the market price of MP3 Players. D. A decrease in the number of sellers of MP3 Players
C
11. Ilan Moschidae owns Nikola Motors, a company that produces electric cars. He has exploited his political connections in order to get legislators in his state to give Nikola Motors an interest free loan to build a new factory. This appears to be an example of A. economic growth. B. rule-of-law. C. crony capitalism. D. the Rule of 72.
C
11. Since January 1948 there have only been three instances in which the unemployment rate in the U.S. (reported on a monthly basis) has been above 8%. This occurred most recently for A. one single month in 1978. B. 74 consecutive months from October 2001 through November 2007. C. 43 consecutive months from February 2009 through August 2012. D. None of the above answers are correct (since the unemployment rate has never been above 8% in any single month since the end of the Great Depression
C
14. Focusing on GDP Growth Rates between 1970 and 2014, _______ grew at an average rate of 9.29% per year over this entire 45 year period. A. The United States B. Japan C. China D. Sub-Saharan Africa
C
2. A good that is used in the production process that is not (itself) a final good or service is _________________. A. an inferior good B. a necessary good C. an intermediate good D. a permanent good
C
20. _________________ refers to the natural and undirected emergence of order out of chaos. A. Command Planning B. Excess Demand C. Spontaneous Order D. An increase in Demand
C
21. High income countries with primarily market based economies, large stocks of technologically advanced industrial capital, and a highly educated and skilled workforce (such as the United States, Norway, Australia, Germany, and Japan) are referred to as A. "Commercially Dependent Countries." B. "Less Developed Countries." C. "Industrially Advanced Countries." D. "Economically Superior Countries."
C
22. Per Capita GDP in Japan is $38,200, while Per Capita GDP in Mexico is only $18,500. These values directly imply that A. people in Japan are roughly twice as happy as people in Mexico. B. people in Japan must live longer than people in Mexico. C. the market value of goods/services produced per person is more than twice as large in Japan than in Mexico. D. people in Japan are more highly educated than people in Mexico.
C
23. According to the depiction provided by the Expanded Circular Flow Diagram, government collects taxes from A. only domestic households. B. only domestic firms. C. both domestic households and domestic firms (but not from any foreign sources).
C
24. If "County Z" currently has an Inflation Rate of 3.7% and an Unemployment Rate of 14.8%, then the value of the Misery Index in "County Z" would be A. 4. B. 11.1. C. 18.5. D. 54.76.
C
26. Since January 1952, inflation rates in the U.S. (reported on a monthly basis) were A. relatively high from January 1952 through March 1983, but relatively low from April 1983 through December 2015. B. relatively low from January 1952 through July 1991, but relatively high from August 1991 through December 2015. C. relatively low from January 1952 through July 1973, relatively high from August 1973 through July 1982, and relatively low from August 1982 through December 2015. D. relatively high from January 1952 through May 1968, relatively low from June 1968 through November 1985, and relatively high from December 1985 through December 2015.
C
27. Per Capita GDP in the European Union is approximately $37,800. In comparison, the value of Per Capita GDP in the U.S. is approximately A. $31,240 (about 17.4% lower than the value in the E.U.). B. $38,120 (roughly the same as the value in the E.U.). C. $56,300 (about 48.9% higher than the value in the E.U.). D. $81,800 (over double the value in the E.U.).
C
29. In order to include many different goods and services in a single aggregate measure, GDP is computed using A. Consumer and Producer Surpluses. B. values of goods/services based upon telephone surveys of consumers. C. market prices of goods/services. D. production costs for goods/services.
C
3. One of the principle functions of money is that it serves as a "unit of account." This role could be described by recognizing that money A. is an asset used as payment when purchasing goods and services. B. is an asset that can be used as a means to hold wealth. C. is used as a basic unit of measuring economic activity. D. None of the above answers are correct.
C
30. The "Great Inflation" refers to the period of high inflation in the U.S. during the A. Great Depression from 1929 through 1939. B. Kennedy and Johnson Administrations from 1960 through 1967. C. early 1970's through the early 1980's (from roughly August 1973 to July 1982). D. first year of the Obama Administration (from Feb. 2009 to March 2010).
C
33. This society's Unemployment Rate is ______. A. 4.25% B. 5% C. 8% D. Cannot be computed from the information provided in the table.
C
6. The Basic Circular Flow Diagram A. summarizes the different combinations of output that a society could produce, given their currently available productive resources. B. illustrates how Supply and Demand interact to determine the unique equilibrium price and equilibrium quantity in a market. C. illustrates the interaction between households and firms in a simplified free market economy. D. None of the above answers are correct.
C
6. The Expanded Circular Flow Diagram builds upon the Basic Circular Flow Diagram by A. eliminating the illustration of the role of households. B. adding an illustration of the role of labor unions and monopolies. C. adding an illustration of the role of government and the foreign sector. D. adding an illustration of the role of the central bank.
C
7. The Unemployment Rate in Spain in 2015 was ______. A. -5.7% B. 0% C. 22.5% D. 137.8%
C
9. When observing "Average Annual Working Time" across different countries, it was noted that the typical worker in the U.S. spends roughly 1,790 hours per year working. In comparison to other countries, this is A. more hours than any other country in the World (since the country with the second highest value is Mexico, with a figure of 1,708 hours per year). B. fewer hours than any other country in the World (since the country with the second lowest value is Japan, with a figure of 1,812 hours per year). C. higher than the figure for Germany (1,371 hours), roughly equal to the figure for Italy (1,725 hours), but lower than the figure for South Korea (2,113 hours). D. exactly equal to the World average, since there is no variability whatsoever in "Average Annual Working Time" across different countries.
C
For Questions 17 and 18, consider a society facing the tradeoffs between "Consumption Goods" and "Capital Goods" which are illustrated by the Production Possibilities Frontier below. The curve labeled "1986 PPF" illustrates the PPF of this society in 1986. In 1986 this society chose "Point A" on this curve. As a result, by 2016 the society faced the PPF labeled "2016 PPF." Capital Goods 0 17. The "outward shift" of the PPF (from "1986 PPF" to "2016 PPF") which occurred between 1986 and 2016 could be best described as A. an increase in demand. B. inflation. C. economic growth. D. economic development
C
Type A Type B Type C Type D Do you currently have a job? Yes Yes No No Are you currently seeking a job? No Yes Yes No Number of People of this type 700,000 220,000 80,000 600,000 32. There are __________ people in the labor force of this society. A. 700,000 B. 920,000 C. 1,000,000 D. 1,600,000
C
1. The "Great Misery" refers to the period of time when A. George W. Bush was President, when the U.S. Federal budget deficit increased by 234%. B. abnormally high inflation rates were realized from the early 1970s through the early 1980s. C. Barack Obama was initially President, when the unemployment rate was above 20% for 17 consecutive months from February 2009 through June 2010. D. the sum of the unemployment rate and inflation rate was 12.50 or higher for 116 consecutive months from November 1973 through June 1983.
D
11. Which of the following demonstrates the "Law of Demand"? A. After Clarissa got a raise at work, she bought more donuts at $6 per dozen than she did before her raise. B. After the price of flour increased by 12%, Sabrina chose to sell fewer donuts. C. Melissa chooses to sell more donuts at $7.25 per dozen than she chooses to sell at $6.75 per dozen. D. Joan chooses to buy fewer donuts at $9.00 per dozen than she chooses to buy at $7.75 per dozen.
D
15. The "Unemployment Rate" is defined as the A. percentage of people in the labor force who have a job, but who feel that they are "undercompensated," "unappreciated at work," or "could easily find a better job." B. number of people in the labor force who are currently not looking for a job. C. number of people in the labor force currently unemployed. D. percentage of the people in the labor force that are currently unemployed.
D
16. Consider two countries that each have a Per Capita GDP of $10,000 in 2016. Country A realizes a constant 3% increase of Per Capita GDP, while Country B realizes a constant 12% increase of Per Capita GDP. Given these constant rates of increase, in 2040 (i.e., 24 years in the future), Per Capita GDP in Country B will be ________________ Per Capita GDP in Country A. A. exactly equal to B. 2 times greater than C. 4 times greater than D. 8 times greater than
D
17. The "Law of Demand" implies that A. if the price of a good increases, then the quantity demanded of the good will decrease. B. demand curves should be "downward sloping." C. demand for a good will increase if consumers realize an increase in income. D. More than one (perhaps all) of the above answers is correct.
D
18. If this society had instead chosen "Point B" in 1986, then the relevant PPC in 2016 would likely lie ___________________ in the graph above. A. somewhere below the curve labeled "1986 PPC" B. somewhere between the curves labeled "1986 PPC" and "2016 PPC" C. exactly on the curve labeled "2016 PPC" D. somewhere beyond the curve labeled "2016 PPC" (i.e., further from the origin)
D
19. Suppose that in Ireland between 2011 and 2012 the Unemployment Rate increased and the Inflation Rate decreased. It follows that the value of the Misery Index in 2012 _____________ the value of the Misery Index in 2011. A. must be greater than B. must be less than C. must be exactly equal to D. could be greater than or could be less than
D
2. A society can achieve economic growth by A. making deliberate investments in human capital and physical capital. B. making deliberate investments in overhead capital. C. realizing an improvement in technology. D. More than one (perhaps all) of the above answers is correct.
D
3. In 2015, Nominal GDP in the United States was _______________ the value of Nominal GDP in the United States in 1915. A. 1.7 times larger than B. 8.3 times larger than C. 26.6 times larger than D. 460.2 times larger than
D
31. Which of the following statements regarding GDP in the U.S. is accurate? A. "Nominal GDP was lower in 2015 than it was in 1915." B. "Real GDP was roughly 26.6 times larger in 2015 than in 1915." C. "Between 1915 and 2015 Real GDP Per Capita increased from $6,113 to $50,820." D. More than one (perhaps all) of the above answers is correct.
D
4. During the last several decades, health officials in the United States have argued that eating too much beef might be harmful to humans. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains this decrease in production? A. Government officials ordered beef producers to produce relatively less beef (out of concern for consumer health). B. Animal Rights Activists have made it difficult for both buyers and sellers of beef to freely trade the good in free markets. C. Beef producers (whose primary concern is the health of their customers) decided to produce relatively less beef. D. Individual consumers (concerned about their own health) decreased their demand for beef (resulting in a decrease in both the equilibrium price and equilibrium quantity of beef).
D
5. Qihong was born in China. Throughout his entire life he has excelled academically. After earning a Master's degree from the China University of Mining and Technology in Beijing, he came to the United States to pursue a PhD. Upon completion of his PhD he was hired by a prestigious research university in Oklahoma, where he works to this day. This story provides an illustration of the A. Rule of 72. B. vicious-cycle-of-poverty. C. catch-up effect. D. brain drain.
D