eco2040 midterm

Which of the following is considered human capital?

the things you have learned this semester

Ralph is a plumber. Which of the following are included in his physical capital?

the tools he uses, but not the knowledge he learned on the job

The Economic Development Minister of a country has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries. She asks you to pick the one you think most likely explains her country's low growth. Which of the following contributes to low growth?

poorly enforced property rights

Consumption consists of spending by households on goods and services, with the exception of

purchases of new houses

Natural resources

are inputs provided by nature // include land, rivers, and mineral deposits // take two forms: renewable and nonrenewable

Changes in nominal GDP reflect

both changes in prices and changes in the amounts being produced

Macroeconomists study

economy-wide phenomena

For an economy as a whole, income must equal expenditure because

every dollar of spending by some buyer is a dollar of income for some seller

Social Security payments are

excluded from GDP because they do not reflect the economy's production

Which of the following examples of household spending is categorized as investment rather than consumption?

expenditures on new housing

Table 1 The table below pertains to an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel Refer to Table 1. If 2005 is the base year, then the CPI for 2005 is

$100

In the economy of Ukzten in 2010, consumption was $5300, GDP was $8800, government purchases were $1800, imports were $500, and investment was $2000. What were Ukzten's exports in 2010?

$200

The table below pertains to an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel The cost of the basket in 2005 was...

$200

James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?

$22,000

Table 1 The table below pertains to an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel Refer to Table 1.The cost of the basket in 2006 was...

$240

A farmer sells $50,000 of apples to individuals who take them home to eat and $75,000 of apples to a company that uses them all to produce cider. How much of the farmer's sales will be included as apples in GDP?

$50,000

Table 2. Megan's salary for three years, along with other values, are presented in the table below. Year 2008 2009 2010 Salary $60,000 $65,000 $72,000 Consumer Price Index 200.0 212.0 233.2 Real Interest Rate 3.0 percent 3.6 percent 3.3 percent Refer to Table 2. Megan's 2008 salary in 2010 dollars is

$69960

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was Alpha Cabinet Company's productivity?

1/8 cabinet per hour

Table 1 The table below describes an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel Refer to Table 1. If 2006 is the base year, then the CPI for 2006 was

100

Table 1 The table below describes an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel Refer to Table 1. If 2005 is the base year, then the CPI for 2006 was

120

A country's real GDP rose from 500 to 550 while its nominal GDP rose from 600 to 770. What was this country's inflation rate?

16.7%

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million. The year before, real GDP was 500.0 billion and the population was 2.0 million. What was the growth rate of real GDP per person during the year?

2%

In an imaginary economy, consumers buy only sandwiches and magazines. The fixed basket consists of 20 sandwiches and 30 magazines. In 2006, a sandwich cost $4 and a magazine cost $2. In 2007, a sandwich cost $5. The base year is 2006. If the inflation rate in 2007 was 16 percent, then how much did a magazine cost in 2007?

2.08

Table 1 The table below describes an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel Refer to Table 1. If 2005 is the base year, then the inflation rate in 2006 was

20%

Table 1 The table below describes an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel Refer to Table 1. If 2006 is the base year, then the inflation rate in 2006 was

20%

If the consumer price index was 88 in 2009, 95 in 2010, and 100 in 2011, then the base year must be

2011

Table 2. Megan's salary for three years, along with other values, are presented in the table below. Year 2008 2009 2010 Salary $60,000 $65,000 $72,000 Consumer Price Index 200.0 212.0 233.2 Real Interest Rate 3.0 percent 3.6 percent 3.3 percent Refer to Table 2. Assume the consumer price index for 2010 is unknown. If the nominal interest rate for 2010 is 7.3 percent , then the consumer price index for 2010 is, in fact,

220.48

The consumer basket used to calculate the CPI in Aquilonia is 4 loaves of bread, 6 gallons of milk, 2 shirts, and 2 pairs of pants. In 2005, bread cost $1.00 per loaf, milk cost $1.50 per gallon, shirts cost $6.00 each, and pants cost $10.00 per pair. In 2006, bread cost $1.50 per loaf, milk cost $2.00 per gallon, shirts cost $7.00 each, and pants cost $12.00 per pair. Using 2005 as the base year, what was Aquilonia's inflation rate in 2006?

24.4%

If the consumer price index was 100 in the base year and 107 in the following year, then the inflation rate was

7%

Suppose that an economy produces 40,000 units of good A which sells at $4 a unit and 20,000 units of good B which sells at $5 per unit. Production of good A contributes

8/5 times as much to GDP as the production of good B

The table below describes an economy in which the typical consumer's basket consists of 10 bushels of peaches and 15 bushels of pecans. Year Price of Peaches Price of Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel Refer to Table 1. If 2006 is the base year, then the CPI for 2005 was

83.3

able 2. Megan's salary for three years, along with other values, are presented in the table below. Year 2008 2009 2010 Salary $60,000 $65,000 $72,000 Consumer Price Index 200.0 212.0 233.2 Real Interest Rate 3.0 percent 3.6 percent 3.3 percent Refer to Table 2. The nominal interest rate for 2009 is

9.6%

If real GDP is 5,100 and nominal GDP is 4,900, then the GDP deflator is

96.1 so prices are lower than in the base year.

Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods.

Country A has lower productivity and lower real GDP per person than country B

Real GDP per person is $30,000 in Country A, $20,000 in Country B, and $11,000 in Country C. Saving per person is $1,000 in all three countries. Other things equal, we would expect that

Country C will grow the fastest

Adam and Doug both build birdhouses. Adam works 20 hours a week and produces 12 bird houses. Doug works 30 hours a week and produces 15 bird houses. Which of the following is correct?

Doug's production is higher than Adam's, but Adam's productivity is higher than Doug's

Sam, an American citizen, prepares meals for his family at home. Ellen, a Canadian citizen, commutes to the U.S. to help prepare meals at a restaurant in Idaho. Whose value of services preparing meals is included in U.S. GDP?

Ellen's but not Sam's.

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Mexican GDP, but it is not included in U.S. GDP

If a U.S. citizen buys a television made in Korea by a Korean firm, then

U.S. net exports decrease and U.S. GDP is unaffected.

Which of the following is not an example of a nondurable good?

a microwave

The inflation rate is calculated

by determining the percentage increase in the price index from the preceding period

Which of the following is not included in GDP?

carrots grown in your garden and eaten by your family

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

consumption and imports

Table 2. Megan's salary for three years, along with other values, are presented in the table below. Year 2008 2009 2010 Salary $60,000 $65,000 $72,000 Consumer Price Index 200.0 212.0 233.2 Real Interest Rate 3.0 percent 3.6 percent 3.3 percent Refer to Table 2. Assume that the consumer price index for 2010 is unknown. Megan's 2010 salary has more purchasing power than her 2008 salary as long as the consumer price index for 2010 is

less than 240

For a given year, productivity in a particular country is most closely matched with that country's

level of real GDP divided by hours worked over that year

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

measuring them is so difficult

The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities Year 2008 2009 2010 2011 Price ofCereal Cereal $4.00 90 $4.00 100 $5.00 120 $6.00 150 Price of Milk $1.50 $2.00 $2.50 $3.50 Quantity of Milk 150 180 200 200

real GDP was $900, and the GDP deflator was 177.8.

The term inflation is used to describe a situation in which

the overall level of prices in the economy is increasing