MICRO ECON 2302 HW

Nominal GDP is estimated to be $26,000 while the GDP deflator is currently 98. What is real GDP? Round your answer to the nearest hundredth.

$26,530.61

True or false? If GDP is rising, standard of living will increase at the same rate.

False

True or false? A trade deficit is the gap, if any, between a nation's exports and its imports, when the exports exceed the imports.

False

True or false? Technology, physical capital deepening, and human capital deepening all contribute equally to GDP growth.

False

Which of the following explains the impact of increasing girls' education in low-income countries?

Girls in low-income countries who receive more education have healthier, better-educated children. Investing in education for girls in low-income countries increases economic growth.

Which of the following two countries are "fast growth" countries?

India China

Which of the following is the correct definition of infrastructure?

Infrastructure is a component of physical capital such as roads and rail systems.

If Saudi Arabia spends 1 hour producing oil and 4 hours producing corn, and the United States spends 2 hours producing oil and 1 hour producing corn, which of the following are true?

Saudi Arabia has an absolute advantage producing oil, and the United States has an absolute advantage producing corn.

Consider a situation where a country's GDP is rising. Which of the following scenarios, if true, would overstate the degree of change in the broad standard of living?

The environment becomes dirtier.

True or False: If businesses become more confident about the economy, we can expect investment spending to increase.

True

Calculate Country B's future GDP 8 years from now if the current GDP is $9,555 and the expected growth rate is 2%. Round your answer to the nearest whole number.

$11,195

Calculate Country A's future GDP 5 years from now if the current GDP is $8,950 and the expected annual growth rate is 5%. Round your answer to the nearest whole number.

$11,423

If total GDP for this economy is $19.7 trillion for the year shown in the table below, what was the total amount spent on consumption? Round your answer to the nearest tenth. Components of GDP on the Demand Side (in trillions of dollars) Consumption ? Investment 3.6 Government spending 4.0 Exports 3.7 Imports 3.5 Total GDP 19.7

$11.9 trillion

Calculate total GDP for this economy given the following components of demand. Round your answer to the nearest tenth. Components of GDP on the Demand Side (in trillions of dollars) Consumption 11.2 Investment 2.8 Government spending 3.1 Exports 2.4 Imports 2.3 Total GDP ?

$17.2 trillion

Suppose the GDP of Canada is 250,000 CAD and the exchange rate between CAD and USD is 1.3 CAD=$1. What is the GDP of Canada when measured in USD? Round your answer to the nearest hundredth.

$192,307.69

Jane is considering running for president of Country Y and wants to campaign setting realistic goals for the future of her country. Help Jane determine the future GDP of Country Y, 3 years from now if the present GDP is $1,984,520 and the growth rate is 4%. Round your answer to the nearest whole number.

$2,232,315

For a school economics project, Maya has to calculate the future GDP of imaginary country Econland 20 years from now. If the present GDP is $985 and the country's growth rate is 5%, what is the future GDP of Econland? Round your answer to the nearest whole number.

$2,613

If total GDP for this economy is $17.04 trillion for the year shown in the table below, what was the total amount of government spending? Round your answer to the nearest hundredth. Components of GDP on the Demand Side (in trillions of dollars) Consumption 11.61 Investment 3.11 Government spending ?Exports 2.71 Imports 2.84 Total GDP 17.04

$2.45 trillion

Suppose that consumers become more pessimistic about the economy. This causes the price level to decrease as represented by the GDP deflator dropping to 98. Nominal GDP also decreases to $28,000. What is real GDP? Round your answer to the nearest hundredth.

$28,571.43

Increased tension in the Taiwan Strait causes the TWD to depreciate to a low of 40 TWD=$1. If TWD current GDP is 175,000 TWD, what is its current GDP when measured in USD?

$4,375

Ray is interested in studying economic growth of his country. He pulled statistics for the GDP of his country, Country G, and found it's present GDP to be $345,521. What will Country G's GDP be in 3 years with an annual growth rate of 9%? Round your answer to the nearest whole number.

$447,460

It takes roughly 900 North Korea Won (KPW) to purchase $1 on the foreign exchange market. If the GDP of North Korea is 5,000 KPW, what is it as measured in USD? Round your answer to the nearest hundredth.

$5.56

Jill is interested in studying economic growth in her country. If Jill's country's present GDP is $489,001 and grows 1% every year, what is the future GDP of Jill's country 10 years from now? Round your answer to the nearest whole number.

$540,161

Suppose the GDP of the entire European Union is 485,000 euros and the exchange rate between euros and USD is 0.86 euros=$1. What is the GDP of the European Union when measured in USD? Round your answer to the nearest hundredth.

$563,953.49

If the current price level is 175 and nominal GDP is $125,000, what is real GDP? Round your answer to the nearest hundredth.

$71,428.57

Suppose input prices throughout the economy increase, pushing the price level up from 103 to 105 while nominal GDP increases from $76,000 to $80,000. What was the real GDP before the increase in input prices? Round your answer to the nearest hundredth.

$73786.41

Cambodia, a low-income country, has a GDP per capita of $5,000 and an annual growth rate of 8% per year. The United States has a GDP capita of $50,000 and represents a high-income country today. The U.S. has an annual growth rate of 1.5% per year. Calculate the growth of the US after 30 years. Round your final answer to the nearest dollar. Do not round any other values.

$78,154

If the GDP per capita for Country J is $2,467 and the population is 360 people, what is the real GDP for Country J?

$888,120

Suppose the GDP of India is 65,000 rupees (INR) and the exchange rate between rupees and USD is 68 INR=$1. What is the GDP of India when measured in USD?

$955.88

Assume the United States has production possibilities to produce either 5 bushels of corn or 7 bushels of wheat using 25 worker hours. If the U.S. decides to produce 1 bushel of corn, how many bushels of wheat can it produce? Place the moveable point at the coordinate that shows this production possibility. Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct.

(1,5.6)

Assume Argentina has production possibilities to produce either 35 batches of apples or 70 batches of peaches using 100 worker hours. If it chooses to produce 15 batches of apples, how many batches of peaches can it produce? Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct.

(15,40)

Assume India has the production possibilities to produce either 20 bottles of milk using 50 worker hours or 25 cartons of eggs using 50 worker hours. If India decides to produce 15 bottles of milk, how many cartons of eggs can it produce? Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct.

(15,6.25)

Assume Mexico has the production possibilities to produce either 50 bottles of milk or 50 cartons of eggs using 100 worker hours. If Mexico decides to produce 30 bottles of milk, how many cartons of eggs can it produce? Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct.

(20,30)

Assume the United States has production possibilities to produce either 30 barrels of oil using 100 worker hours or 120 bushels of wheat using 100 worker hours. If the U.S. produces 20 barrels of oil, how many bushels of wheat can it produce? Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct. (Rounding to the nearest whole number).

(20,40)

Assume China has production possibilities to produce 30 barrels of oil or 15 bushels of corn using 10 worker hours. If China decides to produce 22 barrels of oil, how many bushels of corn can it produce? Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct.

(22,4)

Assume Mexico has production possibilities to produce either 75 batches of apples or 85 batches of oranges using 100 worker hours. If Mexico decides to produce 30 batches of apples, how many batches of oranges can it produce? Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct.

(30,51)

Assume Canada has production possibilities to produce either 100 batches of pumpkins or 75 batches of apples using 100 worker hours. If Canada decides to produce 40 batches of pumpkins, how many batches of apples can it produce? Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct.

(45,40)

Assume that the United States has production possibilities to produce either 50 barrels of oil using 100 worker hours or 100 bushels of corn using 100 worker hours (before trade). If the U.S. chooses to produce 20 barrels of oil, how many bushels of corn can it produce? Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correct.

(60,20)

An oil embargo has raised the price of fossil fuels, decreasing aggregate supply and causing real GDP to decrease from $10,000 to $9,000. What is the percent change in real GDP? If the change is a decrease in GDP, make sure to express your answer as a negative number. If necessary, round your answer to the nearest tenth.

-10%

A new pandemic wipes out most of humanity and decreases worldwide real GDP by $20,000 from $85,000. What is the percentage change in real GDP? Be sure to: Round your answer to the nearest tenth. Include a negative sign if necessary.

-23.5%

If the price of windmills rises by 9%, and the quantity supplied rises by 3%, what is the price elasticity of supply of windmills?

.33

If cutting the price of shoes by 8% leads to an increase in the quantity demanded by 12%, what is the absolute value of the price elasticity of demand for shoes?

1.5

Using the table below, calculate real GDP (in billions of dollars) in 2004. Round your answer to the nearest tenth. Year | Nominal GDP | GDP Deflator (2005=100) | 2002 8,309.8 83.3 2003 9,890.9 87.6 2004 10,302.9 94.5 2005 10,856.8 100 2006 11,200.8 106

10902.5

The government of a country decides to double its current level of spending, causing real GDP to increase from $20,000 to $120,000. What is the percent change in real GDP?

120,000-20,000 / 20,000×100= 500%

Before trade, Argentina produces 71 batches of oranges and 39 batches of apples, and Brazil produces 55 batches of oranges and 93 batches of apples. What is the total world production of oranges before trade?

126

A rise in oil prices has caused input prices to increase throughout the economy, causing nominal GDP to increase by 13%. Meanwhile, the price level decreases by 2%. What is the real GDP growth rate during this period?

15%

An economy enters an expansion and GDP increases from $34,000 to $40,000. What is the percent change in real GDP? Round your answer to the nearest hundredth.

17.65%

An increase in capital stock causes productivity to increase which increases real GDP from $17,000 to $20,000. What is the percent change in real GDP? Round your answer to the nearest hundredth.

17.65%

Below is the production possibilities frontier for China. It shows that China is able to produce either 80 batches of apples or 20 batches of pumpkins using all of its available resources. Also suppose that China decides to produce at point A: 40 batches of apples and 10 batches of pumpkins. If China engages in international trade and trades 20 batches of apples for 20 batches of pumpkins with another country, it will be able to consume outside of its production possibilities frontier. How many batches of apples will the country have at the end of the exchange?

20 batches of apple

Using the table below, determine the growth in nominal GDP from 1980 to 2000. Year Nominal GDP 1970 $1,000 1980 $1,250 1990 $1,150 2000 $1,500

20%

Suppose that the U.S. could produce either 1 apple or 2 peaches, and Mexico could produce 3 apples or 1 peach by using all of their available resources. What is the total world production of apples after each country fully specializes in the good that gives them a comparative advantage?

3 apples

If increasing the price of tables by 7% leads to a decrease in the quantity demanded by 21%, what is the absolute value of the price elasticity of demand for tables?

3.0

Renewable energy sources usher in an age of cheap and reliable energy, reducing energy prices and contributing to real GDP increasing from $100,000 to $130,000. What is the percent change in real GDP?

30%

A change in relative interest rates causes investment expenditures to decrease within an economy resulting in a decrease of real GDP from $38,000 to $35,000. What is the percent change in real GDP? Round your answer to the nearest hundredth.

35,000-38,000 / 38,000×100= −7.89%

Below is the production possibilities frontier for Japan. It shows that Japan is able to produce either 80 bottles of milk or 50 cartons of eggs using all of its available resources. Also suppose that Japan decides to produce at point A: 60 bottles of milk and 12 cartons of eggs. If Japan engages in international trade andtrades 30 bottles of milk for 30 cartons of eggs with another country, it will be able to consume outside of its production possibilities frontier. How many cartons of eggs will the country have at the end of the exchange?

42 cartons of eggs

Using the table below, determine the growth in nominal GDP from 1970 to 1990. Year Nominal GDP 1970 $1,250 1980 $1,000 1990 $1,900 2000 $1,850

52%

Using the information below, determine what percentage of total GDP for this country consists of services. Round your answer to the nearest tenth. Components of GDP on the Supply Side (in trillions of dollars) Durable goods 2.98 Nondurable goods 2.51 Services 10.98 Structures 1.92 Change in inventories 0.10 Total ?

59.4%

An increase in population has increased aggregate demand within an economy, causing both output and prices to increase. Economists have estimated that this change has increased nominal GDP by 14% and the price level by 7%. What is the real GDP growth rate for this period?

7%

A stock market boom causes consumer wealth to increase which results in consumers spending to increase. This increase results in real GDP increasing from $28,000 to $30,000. What is the percent change in real GDP? Round your answer to the nearest hundredth.

7.14%

An increase in productivity increases aggregate supply which causes real GDP to increase from $7,500 to $8,000. What is the percent change in real GDP? Round your answer to the nearest tenth.

8,000-7,500 / 7,500×100= 6.7%

Country N has a real GDP of $5,060 and its GDP per capita is $55. What is Country N's population?

92

Which of the following equations is used to find the trade balance? Assume that both Imports and Exports are represented as positive numbers.

Exports - Imports

A high GDP may be misrepresented by an overestimated standard of living. Select two factors that demonstrate that a rise in the standard of living might be overestimated within a high GDP. Select two correct answers below.

Factors not included in GDP, such as human health and environmental cleanliness, are worsening. Factors such as crime rates and income inequality are both increasing.

True or False? Stagflation refers to a stagnant or contracting real GDP in the presence of deflation.

False

Assume it costs Mexico $10 to produce a bushel wheat and $4 to produce a bushel of corn, and it takes the United States $2 to produce a bushel wheat and $3 to produce bushel of corn. Which nation has a comparative advantage in producing corn?

United States

Education for girls is a good investment in low-income countries because __________________.

all of the above

Investments in education result in ___________.

all of the above

Which of the following is not accounted for in GDP? *the health of the country's citizens *illegal production *the levels of inequality in society *all of the above

all of the above

Capital deepening is __________.

an increase by society in the average level of physical and/or human capital per person

Of the following, which is a way that government can create a healthy climate for economic growth?

by creating policies that encourage lifelong learning

If the price of eggs were to rise by 12%, and if the price elasticity of demand for eggs is around −0.5, will the quantity demanded for eggs increase or decrease, and by what percent?

decrease by 6%

If your customers are very responsive to price changes, that is, if their demand is _____, then a modest price rise will lead to _____ in quantity.

elastic; a large decline

In a trade deficit, ________.

imports are greater than exports

Which of the following are not included in GDP?

intermediate goods non-market activities

Which of the following are not included in GDP?

intermediate goods used goods

A peak _______.

is the highest point in an economy that comes just before real GDP begins falling and recession begins

Even though GDP does not measure the broader standard of living with any precision, it does measure production well and it does indicate when a country is materially better or worse off in terms of

jobs and incomes

GDP can understate standard of living by ______________.

not capturing increases in leisure time

The range of trades that will benefit each country is based on the country's _________.

opportunity costs of producing the good

Which of the following tracks the pattern of recessions and expansions over time?

the business cycle

What are opportunity costs? the price of producing a product that will give you a comparative advantage the direct costs associated with taking advantage of a present opportunity the loss of potential gains of an alternative when a separate alternative is chosen the costs of deviating from the status quo

the loss of potential gains of an alternative when a separate alternative is chosen

Which of the following best describes the term gross domestic product (GDP)?

the measure of the size of total production in an economy

Labor productivity is defined as ________.

the value of what is produced per hour (or other unit) by a worker

What does the shaded area in the graph below represent? Price | | | * (DEMAND) $3|---------------------------------------- | \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\| | \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\| | \\\\\\\\\\\ Shaded\\\\\\\\\\\\\\\\\| | \\\\\\\\\\\\\Area \\\\\\\\\\\\\\\\\\| | \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\| | \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\| | \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\| | \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\| |__________________________________________________|___________ 100 QUANTITY

total revenue

A country has an absolute advantage over another country in producing a good if it _______________.

uses fewer resources to produce that good

The law of diminishing returns help to explain ___________.

why low-income economies grow faster than high-income economies why raising the average level of education of a workforce from a tenth grade education to a high school diploma is more beneficial than a raising the average levels of education from a four-year college degree to a graduate degree

A fall in consumer confidence

will lead to a leftward shift of the AD curve.