TEST #1 Chapters 1-8

The value of ________ contributes to economic well-being, but is excluded from real GDP.

leisure

The Great Depression was a period of _____ production and ____ unemployment.

low high

In the 1950's and 1960's the European unemployment rate tended to be ______ the U.S. unemployment rate, while in the 1990's the European unemployment rate tended to be ____ the U.S. unemployment rate.

lower than; higher than

The total income of capital and labor must equal the value of total

production

The total income of capital and labor must equal the value of total:

production

The fraction of people who would like to be employed, but can't find work is called the:

unemployment rate

In order to promote growth through increased quantities of physical capital, governments must promote:

high rates of saving and investing

The four categories of final users of GDP are:

households, firms, governments, and the foreign sector

Real GDP per person can increase:

if the share of population employed and/or average labor productivity increases.

If living standards in a country, as measured by output per person, increase, then total output must have

increased more rapidly than population increased

If average labor productivity increases while population and the number of employed workers remain constant, then output per person:

increases

GDP equals the value added by producers of:

intermediate goods and services, as well as final goods and services

In 2016 the United States imported approximately ____ percent of all goods and services produced in the country.

15

Inflation was a major problem in the United States during the:

1970s

Nominal GDP measures the ________ of production.

Current dollar value

A trade deficit occurs when:

exports are less than imports

People who run businesses on a day-to-day basis are called:

business managers

When new technologies are applied to the production and distribution of goods and services:

diminishing returns to capital still hold

Summing the value added of all firms yields the value of final goods and services produced because both measures:

exclude the value of intermediate goods and services

An example of a government policy to enhance technological progress is:

government support for basic research

The rise in average living standards experienced by most industrialized countries:

has been more rapid since 1950 than before 1950.

Gross domestic product (GDP) equals the ________ of final ________ produced within a country during a given period of time.

market value goods and services

If average labor productivity increases, real GDP per person:

may increase or decrease depending on the change in the share of population employed.

Average labor productivity =

output per employed worker

Average consumption in an economy is best measured by _____, while average productivity in an economy is best measured by _____.

output per person output per worker

For something to qualify as an export, it has to be sold ______ the country where it was made.

outside

Equipment used to produce other goods and services are called:

physical capital.

Among economists today, the most widely accepted cause of the Great Depression is:

poor economic policymaking

The value of final goods and services equals:

the sum of the value added by all firms

Most economists agree that ________ are the single most important source of productivity improvements.

technological advances