Econ Ch 5-8 Exam HW MC

Assume that in the year 2010, the US Nominal GDP was $15 trillion, while the GDP deflator was 200. Calculate the US Real GDP for 2010.

$7.5 Trillion

To calculate the price elasticity of demand using the midpoint method, you would use the following approach:

% change in quantity / % change in price

To calculate the price elasticity of supply using the midpoint method, you would use the following approach:

% change in quantity / % change in price

If income elasticity of demand for a good is positive, we say that good is a normal good. You can use the following approach to calculate the income elasticity of demand for a good:

% change in quantity demanded / % change in income

The wage elasticity of labor supply can be calculated using the following approach:

% change in quantity of labor supplied / % change in wage

The change in inventories, a component of aggregate supply, comprises roughly __________ of GDP.

0.5%

During the last two centuries, the average rate of growth of GDP per capita in the leading industrialized countries has averaged about _________ per year.

2%

During the Great Depression of the 1930s, the unemployment rate reached more than _________ of the labor force.

25%

In certain African countries like Niger, Tanzania, Nigeria, and Sudan, for example, GDP per capita at the start of the 2000s was still less than $___________.

300

The U.S. unemployment rate moves up and down as the economy moves in and out of recessions. But over time, the unemployment rate seems to return to a range of ____________.

4-6%

Based on the information in the table below, calculate the unemployment rate: Total adult population over the age of 16 83 million Total in the labor force 63 million Total Employed 60 million Total Unemployed 3 million Total out of the labor force 20 million

4.76%

Consumption in the US is about _______ of GDP, and it moves relatively little over time

68%

On the supply side of the GDP, Structures account for around __________ of U.S. GDP

7%

In Bangladesh during the early 2000s, the illiteracy rate for girls between the ages of 15 and 24 was __________ and the illiteracy rate for males in this age group was ______________.

78%; 75%

If the unemployment rate is 8 percent, then this means:

8% of the labor force is unemployed

A company discovers a new technology that allows it to substantially reduce its cost of production. The demand for the product is inelastic. Consumers will in general experience:

A price decrease

The GDP deflator is...

A price index used to remove the distorting effect of inflation from Nominal GDP

In general, supply and demand are often inelastic in the short run, so that shifts in either demand or supply can cause:

A relatively greater change in prices

In macroeconomics, the connection from inputs to outputs for the entire economy is called _______________.

An aggregate production function

Based on a country's aggregate production function,

An increase in human capital and physical capital would also increase the aggregate production function.

Which of the following equation represents GDP measured by the components of demand

Consumption + Government Spending + Trade Balance + Investment = GDP

The demand measure of GDP accounting adds together

Consumption, investment, government purchases, and trade balance

Based on the GDP information in the table below for 2 countries: GDP per capita in 2020 Country A: $30,000 Country B: $25,000 GDP per capita in 2021 Country A: $32,000 Country B: $30,000

Countries A and B have improved their standard of living in 2021 but A has higher standards of living than B

Which of the following countries would be more likely to experience strong economic growth, other things equal?

Country ABC has an extensive set of business laws and property rights laws which promote trust in economic activity.

Workers at a car-manufacturing plant in Detroit, Michigan are laid off because of a recession in the economy. The workers' resulting unemployment can be described as:

Cyclical

A nation could achieve high level of economic growth if:

Devotes more resources to research and development

Which of the following statements best describe how economists calculate GDP?

Economists at the Bureau of Economic Analysis pull together data on sales, imports, exports, government purchase and investments from various government sources every 3 months.

Demand is said to be _____ when the quantity demanded is very responsive to changes in prices

Elastic

Youth smoking seems to be more _____ than adult smoking—that is, the quantity of youth smoking will fall by a greater percentage than the quantity of adult smoking in response to a given percentage increase in price.

Elastic

If the supply curve for housing is perfectly inelastic, then a reduction in demand will cause the equilibrium price to:

Fall and the equilibrium quantity to stay the same.

Some prominent members of the slow-economic growth country club include a high-income country like _________.

France, Germany, Italy, and Japan

The extent of _______________________ will depend on how easy it is for workers to learn about alternative jobs, which may reflect the ease of communications about job prospects in the economy.

Frictional unemployment

Miriam is actively searching for a new job after she voluntarily quit her job. Miriam is now considered:

Frictionally unemployed

Which of the following statements is true?

GDP includes spending on recreation and travel, but it does not cover leisure time.

A nation's prosperity is sometimes measured in terms of ___________.

GDP per capita

An economy's rate of productivity growth is closely linked to the growth rate of its ______________, although the two aren't identical.

GDP per capita

Final goods or services used to compute GDP refer to:

Goods and services purchased by the ultimate users

In 2010, the country of Utopia experienced the highest contraction of their economy at 10% in the previous 20 years before a new expansion phase. In 2010, the economy of Utopia...

Had reached a trough

In the long run, the most important source of increase in a nation's standard of living is a:

High rate of economic growth

If a demand is _____, then a given % rise in price will cause a smaller % fall in quantity demanded so that total revenue (price * quantity) rises.

Inelastic

The evidence on the supply curve of financial capital is controversial, but at least in the short run, the elasticity of savings with respect to the interest rate appears to be:

Inelastic

A demand or supply curve with _____ would be horizontal in appearance.

Infinite elasticity

If discouraged workers are included in the determination of the unemployment rate, what effect will it have on the computed rate?

It will raise it because there are always discouraged workers

Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking. What would happen to the unemployment rate?

It would fall

How do economists define unemployed workers?

Not currently working but actively searching for work

A university student who is enrolled in school fulltime and not seeking employment is considered:

Out of the labor force

Reginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered:

Out of the labor force

Based on the information in the table below, calculate the labor force participation rate, and the percentage or workers out of the labor force: Total adult population over the age of 16 830 million Total in the labor force 630 million Total Employed 600 million Total Unemployed 30 million Total out of the labor force 200 million

Participation rate: 75%; out of the labor force: 24.1%

A horizontal demand curve or supply curve would be called:

Perfectly elastic

In the country of Oz, businesses use new smart cell phones to speed up many tasks such as sales recording, inventory checks, purchase orders etc. Which components of growth are recorded here?

Physical capital and technology

The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in:

Price

To achieve a high standard of living, a nation should:

Promote economic growth

The government of the country Excel provides a large number of grants for scientists to research new technologies and other processes. This action would

Promote economic growth through technological advances

Which statement best describes the difference between Nominal and Real GDP?

Real GDP is Nominal GDP which has been adjusted to remove the distorting effects of inflation.

The price elasticity of demand measures the:

Responsiveness of quantity demanded to a change in price

_____ are now the largest single component of the supply side of GDP representing half of GDP.

Services

Achieving economic growth over a long period of time and raising standard of living, can be done through

Small consistent yearly growth over a long period of time.

Employees at a toy-manufacturing factory are let go because robots have been installed to replace humans. What type of unemployment faces the laid-off workers?

Structural

An auto company decided to relocate its offices from Huntsville, Alabama to Orlando, Florida. The human resources manager of the auto company refuses to relocate to Orlando due to family obligations. While she is searching for a new job, the manager will be considered:

Structurally unemployed

How a tax burden is divided between consumers and producers is called tax incidence. Consumers bear most of the tax burden when:

Supply is more elastic than demand.

Economic growth accounting studies show that

Technology is the most important component of economic growth.

Productivity is measured as

The dollar value of a worker's hour of work

Capital deepening refers to

The increase in quantity and quality of capital per worker.

_____________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s.

The industrial revolution

Price elasticity of demand is defined as:

The percentage change in quantity demanded divided by the percentage change in price.

Modern economics growth was made possible by

The technological advances of the industrial revolution in the 1800s

A perfectly inelastic demand curve or supply curve means:

There is no change in quantity demanded or supplied in response to a change in price.

If you work part-time when you would like to work full time, or have a full-time job that doesn't utilize all your skills and talents, then you are counted as:

Underemployed

When most workers are classified as not being in the labor force, when in reality they are actively searching for work, then the unemployment rate will be

Understated

The unemployment rate measures:

Unemployed workers as a percentage of the labor force

Select the statement below which highlights the role of real GDP: "The growth in real GDP has been much lower than expected over the last few years and...

Unemployment has been rising as a result creating hardship for many in the country.

Demand is said to be _____ when the quantity demanded changes at the same proportion as the price

Unit elastic

Which of the following changes would increase labor productivity?

Workers in country X go though extensive technical training in most manufacturing sectors

Consumption is the purchase of goods and services by:

households

B) The unemployment rate may underestimate the true extent of unemployment if:

many part-time employees would like to work full-time, but are unable to get the additional work

A) The unemployment rate may underestimate the true extent of unemployment if:

many people become discouraged and cease looking for work

The difference between nominal GDP and real GDP is:

real GDP adjusts for inflation

The nominal value of any economic statistic refers to the number that is actually announced at that time, while the ________________ refers to the statistic after it has been adjusted for inflation

real value

GDP is:

the value of all final goods and services produced domestically.

Assume the real GDP of Brazil in 2020 was R 6 billion (Real). If the exchange rate was 1 Real = $0.25, calculate the real GDP of Brazil in US dollars in 2020.

$1.5 Billion

Based on the following data, GDP would equal ___ while Net National Product equals ___ in Billions: Government Purchases $20 Exports $5 Imports $10 Depreciation $5 Investments $25 Consumption $70 Domestic US businesses production abroad $15 Foreign businesses production in US $6

$110 Billion; $114 Billion