Eco test 2

Which of the following statements is false?

The inflation rate can only be calculated as the percentage change in the CPI.

One factor may help explain why some countries are more productively efficient than others it;

The presence of more entrepreneurs in efficient economies

Which of the following is included in the economists definition of investment

The purchase of new machines, factories, or houses

Imports are subtracted from the calculation of GDP in the national income accounting identity bc

Expenditure on foreign production is already included in the consumption, investment, and government expenditure terms.

The preindustrial cycle of increasing aggregate incomes and population followed by decreasing aggregate income and reductions in population is known as the'

Malthusian cycle

___________ predicts that computing power will double approximately every two years due to advances in technology

Mooores law

The role of technological progress in determining economic growth can be described by which statement?

Per capita outpit will rise when we discover new and more effective uses of capital and labor

Efficiency of production is a component of technology that refers to the ability of an economy to;

Produce the highest level output at a given existing resources and knowledge

Which measure of GDP represents changes in the quantity of goods and services produced in the economy, holding prices constant?

Real GDP

Which phase of the business cycle is characterized by increasing levels of unemployment?

Recessions

Which of these is the national income accounting identity?

Y= C+I+G+X-M

When societies transition from an agriculture based economy to an industry based economy you will typically see;

a decline in family size

Which of the following goods and services and services would be excluded from personal consumption expenditures in the Bureau of Econmonic Analysis statistics?

a new house

Which of these will cause the quantity of goods and services that can be produced by one worker, or in one hour of work to increase?

a technological change

The consumer price index is an index computed using prices of a:

fixed basket of goods used by the typical consumer

The industrial revolution was

gradual and systematic

Economic growth will often result in

greater income inequality

The industrail revolution

happened in the 70s in britain

Higher levels of income inequality can lead to

higher crime rates

In general, higher interest rates will lead to

higher savings rates

Knowledge encompasses improvements in capital stock and also additons to;

human capital

Labor productivity can be increased through investments in ___________

human capital

capital income is

income derived from owning physical and financial capital

The human development index measures the standard of living acrosss countries by combining

income per capita, life expectant, average years of schooling for those above age 25 and the enrollment of children in school

Most economists would argue that the best way to reduce poverty is to

increase economic growth

The only way that the standard of living of the average person in a country can increase is by

increasing production faster than population growth

The % increase in the cost of living from one year to the next is the

inflation rate

Which of the following are not counted as final goods and hence not included in the calculation of GDP

intermediate goods

Which of the following would be considered a type of government expenditure

interstate construction

The unemployment rate is specifically defined as the % of the

labor force that is unemployed

The period before 1800 is economically characterized as

lacking in sustained growth

When production begins to increase at a decreasing rate after the addition of one more worker, holding all else constant, it illustrates the;

law of diminishing marginal product

Gross domestic product is best defined as the:

market value of all final goods and services produced in a country during a period of time

A framework used to measure the level of aggregate economic activity in a country is known as;

national income accounts

The GDP deflator is 100X the ratio of

nominal GDP to real GDP

Bill is a college student that is not actively looking for work. He is considered to be;

not in the labor force

Mariam cleans her house twice a week. This task would cost Mariam 100$ a week if she were to hire someone to clean. Mariam's activity adds ___ to the GDP.

nothing

Income per worker is defined as GDP divided by the;

number of people employed

Many economists believe the CPI ___________ inflation because it fails to consider quality improvements in products.

overstates

One approach that helps reduce poverty is for a country to;

participate in international trade

Economists refer to any machinery, buildings, or tools used in the production process as;

physical capital

The total number of workers in an economy is a _____ indicator of how much total output can be produced, because

poor; there are big differences in human capital across workers

Which of the following represents the aggregate accounting identity?

production=expenditure=income

The value of goods and services produced by one worker in one hour is known as ________

productivity

One way to make accurate country comparisons about per capita GDP is to compare relative costs using;

purchasing power parity

Because the focus of long-run economic growth is on the standard of living of the average person, we measure the standard of living in terms of:

real GDP per capita

A decline in economic activity that lasts at least two consecutive quarters known as a

recession

The defining charactersitics of long run economic growth is

rising productivity

The fraction of income that is not used for consumption is known as the

savings rate

The per capita level of income below which an individual cannot easily survive is called the;

subsistence level

Which of these will ensure that an economy experiences sustained economic growht?

technological change

Which of these will ensure an economy experiences sustained economic growth?

technological change?

The ability to produce more output without using any more inputs is due to ________

technological progress

If americans still worked sixty hour weeks; as they did in 1890, _________

the GDP would be much higher than it is but the well-being of the typical person would not necessarily be higher

One example of a technological advancement that has improved lives globally is

the drastic improvement in wireless communications

In developed economies, labor income accounts for _______ of total income payments.

2/3

In 2014 there were more than ______ countries with PPP-adjusted per capita income below $2,000

20

what is the rate of growth that occurred if a country's GDP grew from 1.43 trillion in 2012 to 1.51 trillion in 2013

5.59%

Suppose total GDP in an economy is 5.6 trillion. If total savings in this economy is 321 billion, then the saving rate is equal to

5.7%

In 2014, PPP adjusted per capita income in the U,K was more than ______ greater tha PPP adjusted per capita income in Liberia

50 time

In 2010, PPP adjusted per capita income in the U.S was more than ____ greater than PPP adjusted per capita income Ethiopia.

50 times

In the US the richest top ten percent of the population recieves approximately _____ of the total income

50%

The US GDP per capita was more than ________ in 2014

50,000

If a country's GDP was $200 million and the country had 75,000 workers the country's income per worker is

$2,667

In 2012, the U.S spent about ____ on R&D

$457 billion

According to the World Bank, people living in poverty make less than;

1.90 per day

Consider the following aggregate production function: Y=AxF(K,H) Technological progress will lead to.

An increase in the level of output in the economy

In measuring changes in the standard of living of a country, economists rely heavily on comparisons over time of real GDP per capita because:

Despite its well known flaws, it is the best means we have of comparing the performance of an economy over time

Which of these statements about the benefits of economic growth is true?

Economic growth can help people at all income levels

Countries that desire to increase output and overall standards of living can provide incentives by;

encouraging R&D through tax credits

Which equation correctly describes how total efficiency units of labor are calculated?

H=LXH

In a circular flow model, who supplies factors of production in exchange for income?

Households

Which of these terms refers to the accumulated knowledge and skills workers acquire from education, training and life experiences?

Human capital

Which of these if most likely to increase productivity?

Investments in research and development

Which of these is not a shortcoming of GDP as a measure of welfare?

It only counts final goods and services and not intermediate goods

To an economist, land refers to;

all natural resources

During exponential growht, real GDP increases at a ________ rate

almost constant

Lower fertility rates enabled the global economy to

break away from the malthusian cycle

The savings rate in an economy is crtical since aggregate saving translates into

business investment

When relatively poor nations adopt knowledge and technology develops by advanced naitons to stimulate econonmic grwoth it is known as;

catch up growth

The shortcoming of the Big Mac Index is that it

compares the prices that a single good has in two different countries

Which is the largest component of GDP

consumption

Greater income equality leads to ____ poverty levels

debatable

As the value of a country's real GDP increases, the country is likely to

devote more resources to pollution reduction

there is a natural limit to economic growth from capital deepening due to

diminishing returns

Economists compare the extent of poverty across countries by using a measure called

the one dollar a day per person poverty line

Real GDP

the value of goods and services evaluated at base year prices

Macroecomics focuses on which of the following topics?

unemployment, inflation, growth, and trade