dtf?

Imagine that Jack and Jill buy $500 worth of milk and $200 worth of crayons and coloring books each year for use in their day-care business. Jack and Jill also hire a day-care attendant at a salary of $14,000 per year. If Jack and Jill sell $100,000 worth of day care to parents each year, what is the contribution to GDP by Jack and Jill's Day Care?

$100,000

Tim buys a house from Betty in 2011 for $200,000. Betty receives $185,000 and $15,000 goes to Mary, the real-estate agent. Betty originally purchased the house in 2007 for $240,000. What value is added to GDP in 2011 for this transaction?

$15,000

Table: Prices and Quantities in a 4-Good Economy) Suppose an economy produces only the four goods listed in this table. What is the GDP in this country?

$7,700

(Table: iPhones) This table shows data for a country producing only iPhones. The growth rate of real GDP between 2000 and 2010 (in 2000 dollars) is:

-10%.

If a country's real GDP per capita in 1950 was $10,000, and it grew to $20,000 by year 2000, then the country's annual growth rate during this period would have been approximately:

1.4%.

If you received a constant annual rate of return of 7% on an investment of $10,000, how many years will it take before you have $20,000?

10 years

If the average annual growth rate of a country increases from 2% to 3%, how much faster will its GDP double?

11 2/3 years faster

(Table: Wheat and Corn) Consider a country that produces only wheat and corn. Based on the data in the table, the country's GDP deflator for 2008 (using 2005 prices for the calculation of real GDP) is:

142

Real GDP for the year 2000 (measured in 2005 dollars) is equal to:

2005 prices × 2000 quantities.

(Table: Wheat and Corn) Consider a country that produces only wheat and corn. Based on the data in the table, the growth rate of nominal GDP from 2005 to 2006 is:

27%.

GDP in the United States was $14,119 billion in 2009, and grew to $14,660.4 billion in 2010. This represents an annual growth rate of:

3.8%.

If GDP was $10 billion in 2010 and $11 billion in 2011 and the population grew 5% between 2010 and 2011, the growth rate of GDP per capita between 2010 and 2011 was:

5%.

If real GDP per capita in the United States is currently $50,000 and grows at 2.5% per year, it will take approximately how many years to reach $200,000?

56 years

Suppose economies A and B have the same initial level of GDP per capita at $15,000, and each economy begins with a constant growth rate of 1% per year. (Neither country has good institutions for economic growth at first.) Then Country A enters an era of political stability, establishes property rights, and installs incentives for entrepreneurship. Country A's economic growth rate consequently improves to 5%. Assuming population growth rates remain unaffected, how much longer will it take Country B to double its per capita GDP level compared to Country A?

56 years

Suppose a country's real GDP per capita was $9,000 in 1990, and it grew to $18,000 by 2000. What is the annual growth rate of the country's real GDP per capita during this period?

7%

(Table: Wheat and Corn) Consider a country that produces only wheat and corn. Based on the data in the table, the growth rate of real GDP from 2007 to 2008 (in 2005 dollars) is:

8.3%.

Roughly what percent of the world's population live in countries with per capita GDP lower than the average world per capita GDP?

80%

Which statement is TRUE about economic growth?

A country can grow and become wealthy, never grow, or grow and then begin to stagnate.

If the GDP of country X is 4 times the GDP of country Y and if the GDP of country X remains constant while GDP of country Y grows at a rate of 7% per year, which of the following statements is true?

Country Y's GDP will be equal to country X's GDP in 20 years.

Which of the following statements is TRUE about GDP?v

GDP does not account for the distribution of income in a country.

Which statement best describes the economic growth patterns in the world since World War II?

Japan and South Korea experienced rapid growth while Argentina and Nigeria experienced slow growth.

Why did so many Chinese farmers and workers starve under "The Great Leap Forward"?

The incentive to work hard was low since the rewards were so minimal.

Which scenario has the greatest potential for free riding?

a system in which work effort and pay are not connected

Growth in nominal GDP over time can be caused by:

an increase in both prices and production over time.

Which of the following would be most effective in reducing "free riding" in a communal farming system?

assigning property rights

In the past 100 years, there has been a decline in the use of unpaid child labor on family farms. Therefore:

changes in GDP overstate the true increase in production over the past 100 years.

The most promising idea for creating a growth miracle in a country is:

changing the institutions in the country.

Which is NOT likely an ultimate cause of economic growth around the world?

communal resources

To avoid double accounting, the value of:

final goods only are included in GDP.

Which of the following is an ultimate cause of economic growth among countries around the world?

geography

If 2009 prices are used in the calculation of real GDP and inflation occurs between 2009 and 2010, then nominal GDP will be ____ real GDP in 2010.

greater than

Countries that have high per capita GDP tend to have:

high levels of all three factors of production.

Which of the following is (are) NOT an institution of economic growth?

labor unions

Which is NOT an example of an institution that creates incentives aligning self-interest with the interest of society?

low inflation

GDP is calculated by:

multiplying the quantity of all goods and services by their prices and adding together the results.

The value of volunteer services is:

not included in GDP, but should be because a service is produced.

Using the national spending approach to measuring GDP, the social security checks the government sends retirees each month get included in GDP as part of:

nothing; they are not included as part of GDP.

The value of a country's GDP exceeds that of the country's GNP if the value of the:

output produced by foreign workers in the country exceeds the value of output produced by the country's permanent residents in other countries.

Which is considered an immediate cause of economic growth?

physical capital

For most of recorded human history, real GDP per capita has:

remained about the same.

Property rights encourage:

saving and investment in both physical and human capital.

A country that has enforceable property rights, a noncorrupt political system, abundant factors of production, and a change in leadership and form of government every few years should suspect that economic growth will be _____ because _____.

slow; of uncertainty due to an unstable political system

Which is NOT an important institution for growth?

strong regulation of religious belief

Which are immediate causes of the wealth of nations?

technical knowledge and human capital

A developing country could buy (or be given) _____ and _____ more easily than _____.

technological knowledge; physical capital; human capital

The key reason for China's growth miracle beginning in the late 1970s was:

the assignment of private property rights.

When an economic system changes from using a collective property rights system to something closer to private property rights, the immediate effect is:

to increase investment, work effort, and productivity.

Institutions and incentives are _____ causes, and factors of productions are _____ causes of the wealth of nations.

ultimate; immediate

History has shown that when collective property rights are converted to private property rights:

work effort, investment, and productivity all increase.

Around the world, about one _____ people have incomes of less than $2 per day.

billion

(Table: iPhones) This table shows data for a country producing only iPhones. If 2000 prices are used in the calculation of real GDP, the GDP deflator for 2010 is:

110.

Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If 2008 prices are used in the calculation of real GDP, then nominal GDP in 2009 is _____ and real GDP in 2009 is _____.

$34,310; $33,700

Table: Prices and Quantities in a 4-Good Economy) Suppose an economy produces only the four goods listed in this table. All of the country's tomatoes are used in the production of pizzas. What is the GDP in this country?

$7,200

(Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. What is the growth rate of real GDP in 2009 if 2009 prices are used in the calculation of real GDP?

-2.94%

(Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. What is the growth rate of real GDP in 2009 if 2008 prices are used in the calculation of real GDP?

-3.71%

(Table: iPhones) This table shows data for a country producing only iPhones. Based on the GDP deflator, the increase in prices between 2000 and 2010 was:

10%.

In 2010, real GDP was $13.2 trillion (using 2005 prices) and nominal GDP was $14.6 trillion. Based on the GDP deflator, prices in 2010 were about _____ than prices in 2005.

10.6% higher

Suppose a country's annual growth rate of real GDP per capita is approximately 2%. By which year would the country double its real GDP per capita from $10,000 in 1950 to $20,000?

1985

Decreases in the level of political stability in a country tend to:

decrease per capita GDP.

Which would be most effective in ensuring sustained long-term economic growth?

increasing technological knowledge

High-income economies generally have _____ that incentivize individuals' self-interest by using _____.

institutions; profit-seeking motives

Which is NOT an example of physical capital?

money

Property rights are important institutions for encouraging investment because:

people won't invest if they feel their property is at risk and that they may not realize a return on their investment.