Econ 3102 first half
A consumption bundle A) is a particular combination of consumption and leisure. B) only measures a quantity of goods and services, but not the amount of leisure. C)is a method of bringing home consumption goods. D) measures the quality of a particular good.
a
A price index can be computed by A) dividing a nominal variable by its real counterpart. B) dividing a real variable by its real counterpart. C) subtracting the nominal variable from its real counterpart. D) subtracting the real variable from its nominal counterpart
a
Acme Steel Co. produces 1000 tons of steel. Steel sells for $30 per ton. Acme pays wages of $10,000. Acme buys $15,000 worth of coal, which is needed to produce the steel. Acme pays $2,000 in taxes. Acme's contribution to GDP is A) $15,000. B) $20,000. C) $30,000. D) $45,000.
a
All of the following present significant problems with measuring real GDP and the price level except A) changes in absolute price levels. B) changes in relative price levels. C) changes in the quality of goods over time. D) the introduction of new goods.
a
Employment tends to be A) procyclical and less variable than real GDP. B) procyclical and more variable than real GDP. C) countercyclical and less variable than real GDP. D)countercyclical and more variable than real GDP.
a
For the period 1947-2012 in the United States, the money supply was A) procyclical and leading. B) procyclical and lagging. C) countercyclical and leading. D) countercyclical and lagging.
a
For the period 1948-2015, the price level is A) mildly countercyclical. B) strongly procyclical. C) indicative of a Phillips curve correlation. D) proportional to real GDP.
a
GDP and GNP may differ A) because some income generated by domestic production may be received as income by foreign residents. B) because some intermediate good inputs are imported. C) because some workers are illegal aliens. D) whenever tariff rates become excessively high.
a
In Solow's exogenous growth model, the steady-state growth rate of capital can be increased by A) higher population growth. B) higher depreciation rate. C) higher saving rate. D) higher interest rate.
a
In the steady state of Solow's exogenous growth model, an increase in the savings rate A) increases output per worker and increases capital per worker. B)increases output per worker and decreases capital per worker. C)decreases output per worker and increases capital per worker. D) decreases output per worker and decreases capital per worker.
a
In the steady state of Solow's exogenous growth model, an increase in total factor productivity A) increases output per worker and increases capital per worker. B)increases output per worker and decreases capital per worker. C)decreases output per worker and increases capital per worker. D) decreases output per worker and decreases capital per worker.
a
National saving minus private saving is equal to A) the government surplus. B) private disposable income. C) the current account deficit. D) interest on the government debt.
a
Seasonal adjustment tends to A) smooth a time series with an important seasonal component. B) accentuate seasonal fluctuations. C) take out the deviations from trend in a time series. D) make a time series acyclical.
a
Suppose a poor economy inches towards the steady state in Solow's exogenous growth model. What happens? A) Capital grows faster than population. B) Capital grows slower than population. C) Capital grows as fast as population. D) It depends.
a
The business cycle component of the log of real per-capita GNP is equal to A) log of actual real GNP - log of trend GNP. B) log of trend GNP ÷ log of actual real GNP. C) log of trend GNP - log of actual real GNP. D) log of actual real GNP ÷ log of trend GNP.
a
The real wage denotes A) the number of units of consumption goods that can be exchanged for one unit of labor time. B) the number of units of labor time that can be exchanged for one unit of consumption goods. C) the number of units of labor time that can be exchanged for one unit of leisure time. D) the number of units of leisure time that can be exchanged for one unit of labor time.
a
The slope of the output per worker function is equal to the A) marginal product of capital. B) marginal product of labor. C) savings rate. D) growth rate of the population.
a
We know the following about a tie manufacturer: tie sales $1,300, cotton purchases $750, wages $400, interest on business loans $100, and profits $50. What is the contribution to GDP of this producer using the income approach? A) $550 B) $500 C) $450 D) $400
a
Which of the following is not a reason for differences in total factor productivity across countries? A) differences in the size of population B) learning by doing C)barriers to the adoption of Previous Edition technology D) inefficient allocation of factors of production across firms in some countries
a
A business cycle peak is a A) small positive deviation from trend in real GDP. B) relatively large positive deviation from trend in real GDP. C) small negative deviation from trend in real GDP. D) relatively large negative deviation from trend in real GDP.
b
Additions to the nation's capital stock are brought about through A) the current account surplus. B) investment. C) investment and the current account surplus. D) investment and the government budget surplus.
b
In the Golden Rule steady state, the marginal product of capital is equal to the A) savings rate plus the population growth rate. B) population growth rate plus the depreciation rate. C) depreciation rate plus the savings rate. D) savings rate divided by the marginal product of labor.
b
In the Malthusian model, the population growth rate is A) exogenous. B) positively related to consumption per worker. C) negatively related to consumption per worker. D) assumed to be constant.
b
The profit-maximizing quantity of labor equates the marginal product of labor with A) total factor productivity. B) the marginal product of capital. C) the real wage. D) the average product of labor.
c
In the Solow growth model, countries with identical total factor productivities, identical labor force growth rates, and identical savings rates A) always have identical levels of capital per worker and output per worker. B) in equilibrium, have identical levels of capital per worker and output per worker. C) in equilibrium, have identical levels of capital per worker but not necessarily identical levels of output per worker. D) in equilibrium, have identical levels of output per worker but not necessarily identical levels of capital per worker.
b
Macroeconomic forecasting is made more difficult due to the fact that A) deviations from trend in real GDP are persistent. B) turning points are hard to predict. C) there is no regularity in comovements. D) consumption is smooth.
b
Recent evidence suggests that output per worker is A) positively related to both the rate of investment and to the rate of population growth. B) positively related to the rate of investment and negatively related to the rate of population growth. C) negatively related to the rate of investment and positively related to the rate of population growth. D) negatively related to both the rate of investment and to the rate of population growth.
b
Suppose that the government collects $3 million in taxes, pays $2 million in social security benefits, pays $0.5 million in interest on the national debt, and pays workers $1 million to sit at their desks and work as little as possible. The government's contribution to GDP is A) $0. B) $1 million. C) $3 million. D) $3.5 million.
b
The Solow residual attempts to measure the amount of output not explained by A) technological progress. B) the direct contribution of labor and capital. C) economic projections. D) the amount of a nation's human capital.
b
When consumption and leisure are both normal goods, after an increase in real dividend income minus taxation, the rational consumer A) increases consumption and increases labor supply. B) increases consumption and reduces labor supply. C) reduces consumption and increases labor supply. D) reduces consumption and reduces labor supply.
b
If consumption and leisure are perfect complements for the consumer A) an increase in the real wage causes the consumer to substitute consumption for leisure. B) an increase in the real wage causes the consumer to substitute leisure for consumption. C) an increase in dividend income has no effect on the ratio of consumption to leisure. D) the effect of an increase in dividend income depends on whether consumption is normal.
c
In the Malthusian model of economic growth, an increase in the quantity of land A) increases steady state per capita consumption, and increases the steady state population. B) has no effect on steady state per capita consumption or on steady state population. C) has no effect on steady state per capita consumption, and increases the steady state population. D) increases per capita consumption, and reduces the steady state population.
c
In the Malthusian model, an improvement in the technology of growing food is likely to A) increase the equilibrium size of the population and increase the equilibrium level of consumption per worker. B) increase the equilibrium size of the population and decrease the equilibrium level of consumption per worker. C) increase the equilibrium size of the population and have no effect on the equilibrium level of consumption per worker. D) have no effect on the equilibrium size of the population and increase the equilibrium level of consumption per worker.
c
In the Malthusian model, population growth is endogenous because A) the birth rate is endogenous. B) the death rate is endogenous. C) the birth and death rates are endogenous. D) neither is endogenous.
c
In the one-period competive equilibrium model we have been studying, an increase in government spending A) increases consumption, increases hours worked, and increases the real wage. B) reduces consumption, increases hours worked, and increases the real wage. C) reduces consumption, increases hours worked, and reduces the real wage. D) reduces consumption, reduces hours worked, and reduces the real wage
c
Suppose we have the following information about a furniture maker: furniture sales $100M, wood purchases $60M, wages $25M, tax on profits $5M, profits $10M. What is the contribution to GDP of this company using the product approach? A) $100M. B) $60M. C) $40M. D) $15M.
c
The Golden Rule of capital accumulation maximizes the steady-state level of A) output per worker. B) capital per worker. C) consumption per worker. D) investment per worker.
c
The Solow model emphasizes the role of which of the following factors of production? A) land B) labor C) capital D) natural resources
c
The assumption that the marginal product of labor decreases as the labor input increases implies that A) output decreases as the labor input increases. B) the wage increases as the labor input increases. C) the production function is concave. D) the production function shifts upward.
c
The quantity of labor supplied A) is similar to the supply for any other good or service, as quantity supplied increases with price. B) may decrease with the real wage, if the income effect is smaller than the substitution effect. C) may increase with the real wage, if the substitution effect is larger than the income effect. D) always decreases when the real wage increases.
c
We can express the per-worker production function as a function of only per-worker capital thanks to A) the decreasing marginal return of capital. B) the decreasing marginal return of labor. C) the constant returns to scale. D) the impatience of households.
c
Which of the following causes the competitive equilibrium to fail to be Pareto optimal? A) lump sum taxation B) competitive firms C) proportional taxes on wages D) consumers care about the dividends they receive from firms
c
A Pareto optimum is a point that A) a malevolent dictator would choose. B) a cooperative coalition of some altruistic consumers would choose. C) a cooperative coalition of some socially responsible firms would choose. D) a benevolent social planner would choose.
d
Average labor productivity is computed as the A) ratio of industrial production to the employment rate. B) ratio of real output in manufacturing to the level of real GDP. C) ratio of real GDP to the unemployment rate. D) ratio of real GDP to the level of employment.
d
If, with proportional taxes on labor income, there is an equilibrium with a high tax rate, and an equilibrium with a low tax rate, A) the economy cannot function. B) the government should always choose the lower tax rate, as this makes the consumer better off. C) the government should always choose the higher tax rate, as this makes the consumer better off. D) it is irrelevant what tax rate the government chooses.
d
In recent U.S. history A) GDP has been much higher than GNP. B) GNP has been much higher than GDP. C) the difference between GNP and GDP has been very volatile. D) there has been little practical difference between GNP and GDP.
d
Over the course of the twentieth century, the typical American A) remained equally as rich. B) became twice as rich. C) became five times as rich D) became ten times as rich.
d
The saving rate has the following characteristic in Solow's exogenous growth model A) it increases with output. B) it first decreases, then increases with output. C) it first increases, then decreases with output. D) it is constant.
d
We can use a per-worker production function in the Malthusian model because A) there is a representative worker. B) firms are competitive. C) there is a steady state. D) the production function has constant returns to scale.
d
Which of the following is not a feature of the steady state in Solow's exogenous growth model? A) The capital/output ratio is steady. B) Capital grows continuously. C) Consumption per worker is steady. D) Total saving is steady.
d