Macroeconomics Exam 2

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? A. $100,700 B. $700 C. $114,700 D. $100,000

$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? A. $185,000 B. $200,000 C. $15,000 D. -$40,000

$15,000

(Figure: A Tariff on Imports) Refer to the figure. Suppose the government intervenes with a $2 tariff; the total value of deadweight loss as a result of the tariff is: A. $550 million. B. $200 million. C. $150 million. D. $400 million.

$150 million.

(Figure: Foreign Trade Market) Refer to the figure. What is the dollar value of the deadweight loss created by the loss of foreign trade? A. $6,000 B. $7,500 C. $10,000 D. $4,000

$4,000

(Figure: Foreign Trade with a Tariff) Refer to the figure. A $1 tariff generates increased domestic production by: A. $180 million units. B. $40 million units. C. $90 million units. D. $140 million units

$40 million units.

(Figure: Foreign Trade Market) Refer to the figure. What is the dollar value of wasted resources as a result of prohibiting trade in this market? A. $6,000 B. $7,500 C. $10,000 D. $4,000

$6,000

(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? A. $6,200 B. $7,200 C. $6,700 D. $7,700

$7,200

(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? A. $7,700 B. $6,700 C. $7,200 D. $6,200

$7,700

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. A. 9.6% higher B. 10.6% lower C. 9.6% lower D. 10.6% highe

10.6% higher

If the average annual growth rate of a country increases from 2% to 3%, how much faster will its GDP double? A. 17 years faster B. 25 years faster C. 11 2/3 years faster D. 10 years faster

11 2/3 years faster

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? A. 1985 B. 2000 C. 2005 D. 1970

1985

(Figure: Labor Market) Refer to the figure. If this market is initially in equilibrium when a $10 minimum wage is imposed, the quantity of labor employed will fall by: A. 60. B. 20. C. 40. D. 80.

20

Real GDP for the year 2000 (measured in 2005 dollars) is equal to: A. 2000 prices × 2005 quantities. B. 2005 prices × 2005 quantities. C. 2000 prices × 2000 quantities. D. 2005 prices × 2000 quantities.

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: A. 16%. B. 8%. C. 27%. D. 21%

27%

(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in the year 2005? A. 1.9% B. 2.9% C. 1% D. 4.7%

4.7%

(Figure: Labor Market) Refer to the figure. What is the unemployment rate in this market as a result of the implementation of a $10 minimum wage? A. 20% B. 25% C. 50% D. 100

50%

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? A. 56 B. 84 C. 112 D. 28

56

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? A. 10% B. 7% C. 20% D. 25%

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: A. 8.3%. B. 25.2%. C. 15.7%. D. 27%

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? A. 80% B. 50% C. 25% D. 10%

80%

If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's unemployment rate is: A. 5%. B. 9.1%. C. 11%. D. 10%

9.1%.

Which statement is TRUE about economic growth? A. A country can grow and become wealthy, never grow, or grow and then begin to stagnate. B. Growth is a random process; in some years a country grows and in other years it doesn't. C. All countries eventually grow rich. D. Once a country starts to grow, it will continue to grow.

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

In a country where both the labor force participation rate and the unemployment rate are very low, which of the following answers explains why this may be the case? A. A large percentage of the population consists of children. B. A large percentage of the population is employed. C. A large percentage of the population is unemployed. D. A large percentage of the population is aging and thus has retired.

A large percentage of the population is aging and thus has retired.

Higher implicit tax rates tend to cause labor force participation rates to: A. decrease. B. remain constant. C. increase. D. behave unpredictably

A. decrease.

According to the supply and demand framework in the text, an increase in import trade tends to ______ domestic production of a good. A. hold constant B. have an indeterminate effect on C. decrease D. increase

All of the statements are correct.

Which of the following statements describes reasons why free trade is beneficial for the United States? A. Through specialization, the United States and its trading partners can use the same overall amount of resources to produce and consume a larger amount of goods. B. Free trade directs U.S. resources to those goods and services for which the United States has a comparative advantage. C. Free trade increases consumer surplus for imported goods that are cheaper than U.S. goods. D. All of the statements are correct.

All of the statements are correct.

Which of these transactions occurring in 2011 would contribute to GDP for 2011? A. A contractor sells a new house which was built in 2009. B. Mario sells his used car for a profit. C. Boeing sells a 787 aircraft produced in 2011 to a Korean airline. D. Sally buys $10,000 worth of U.S. government bonds as an investment.

Boeing sells a 787 aircraft produced in 2011 to a Korean airline.

Structural unemployment is more persistent in France than in the United States because: A. France's labor regulations require a mandatory waiting period before a worker can reapply for a new job. B. French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher. C. labor unions are weaker in France than they are in the United States. D. American workers have many more job opportunities than French workers.

French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher.

Which of the following statements is TRUE about GDP? A. GDP includes a positive adjustment for the value of leisure and well-being. B. GDP includes a negative adjustment for damage caused by pollution. C. GDP includes all known goods and services in the underground economy. D. GDP does not account for the distribution of income in a country.

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

Which of the following is TRUE in the calculation of GDP? A. GDP does not include goods and services produced privately inside the home. B. GDP is positively adjusted to include production in the underground economy. C. GDP includes a positive adjustment for leisure activities, even if no purchase is required. D. GDP is negatively adjusted to account for environmental damage caused by businesses.

GDP does not include goods and services produced privately inside the home.

In nations that have large underground, or illegal, sectors: A. poverty will be significantly greater than in countries with fewer illegal market activities. B. GDP will underestimate total production in the economy. C. GDP will overestimate total production in the economy. D. GDP will provide an accurate account of production in the economy.

GDP will underestimate total production in the economy.

Which of the following is a case of cyclical unemployment? A. Grace is an accountant temporarily unemployed since tax season has ended. B. Garrett lost his job after the company closed during last year's recession. C. Gwyneth is still seeking a job that will use her skills in statistics. D. Glenn quit his job to move to another state.

Garrett lost his job after the company closed during last year's recession.

Which of the following is the best example of frictional unemployment? A. Peter, a highly skilled construction worker, lost his job when the recession began. He is looking for work, but demand in the construction industry is still low. B. John, a coal miner, was laid off because of a lack of demand for workers in his industry. He is looking into new opportunities in computer programming, but they require him to gain some new skills. C. Heather recently graduated with her doctorate in economics. She is searching for a job that matches her skills. D. Allison, a recent high school graduate with high aspirations, is seeking a job as the CEO of a Fortune 500 company.

Heather recently graduated with her doctorate in economics. She is searching for a job that matches her skills.

Which of the following is an ultimate cause of economic growth among countries around the world? A. culture B. geography C. history D. History, culture, and geography are all ultimate causes of growth.

History, culture, and geography are all ultimate causes of growth.

If quotas on sugar were eliminated in the United States, domestic production of sugar would fall. Why is this a benefit in economic terms for the United States? I. Resources are freed up that could be used more efficiently elsewhere. II. It is beneficial because it allows foreign producers of sugar to earn income and thus those countries are better off. III. U.S. consumers are able to enjoy increased consumer surplus because of the lower prices of imported sugar. A. II and III only B. I, II, and III C. I and III only D. I and II only

I and III only

The benefits of trade include: I. greater productivity due to specialization. II. higher output due to specialization according to comparative advantage. III. increased welfare when preferences differ. A. I, II, and III B. I and II only C. II and III only D. I and III only

I, II, and III

Which of the following is true of the natural unemployment rate? A. It is higher if structural or frictional unemployment is higher. B. It is equal to zero when the economy is not in a recession. C. It has been fixed at 4% during the post-World War II period. D. It can change dramatically within a matter of months.

It is higher if structural or frictional unemployment is higher.

Which statement best describes the economic growth patterns in the world since World War II? A. Japan and South Korea experienced rapid growth while Argentina and Nigeria experienced slow growth. B. Japan and South Korea experienced slow growth while Argentina and Nigeria experienced rapid growth. C. Most countries in the world experienced rapid growth. D. Most countries in the world except the United States experienced no growth at all.

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

(Table: Small-Town GDP) Which of the four towns in this table has the highest standard of living? A. Town A B. Town B C. Town D D. Town C

Town B

The Japanese people currently pay about 4 times the world price for rice. If Japan removed its trade barriers so that Japanese consumers could buy rice at the world price, who would make a greater effort lobbying for or against this reduction to trade barriers: Japanese consumers or Japanese rice famers? A. Japanese consumers would lobby harder since their potential gain as a whole is larger than the potential loss of farmers as a whole. B. Japanese farmers would lobby harder since their potential loss as a whole is larger than the potential gain of consumers as a whole. C. Japanese farmers would lobby harder since their losses are concentrated in a smaller group than the gains to consumers. D. Japanese consumers would lobby harder, since their gains are spread over a larger group than the gains to farmers.

Japanese farmers would lobby harder since their losses are concentrated in a smaller group than the gains to consumers.

Which of the following activities is counted as part of U.S. GDP? A. Joe watches a free video on YouTube. B. Jeff stays in a hotel in Colorado while on a skiing trip. C. Jake takes a vacation at a Caribbean resort. D. John purchases a counterfeit DVD.

Jeff stays in a hotel in Colorado while on a skiing trip.

Because of pressure from Western countries, garment producers in Bangladesh quit employing 30,000 to 50,000 child workers. What happened to these children? A. The majority of the children went back to being children: playing in parks, hanging out with friends, going to the mall, and so forth. B. Almost all the children went back to school to learn a more lucrative trade. C. Many children went to work in jobs with worse conditions and lower pay, many in prostitution. D. The majority of children found higher-paying jobs, with better labor protections.

Many children went to work in jobs with worse conditions and lower pay, many in prostitution.

Which statement is TRUE? A. About 50% of the world's children aged 10 to 14 work. B. Rising real GDP per capita has been an important force in reducing child labor. C. Most child labor around the world takes place in factories that export products. D. Although inefficient, trade restrictions are effective at reducing child labor.

Rising real GDP per capita has been an important force in reducing child labor.

The most promising idea for creating a growth miracle in a country is: A. changing the institutions in the country. B. opening the country to more foreign investment. C. allowing more foreign aid in the country. D. building more schools in the country.

changing the institutions in the country.

Which of the following would be included in GDP for the United States? A. a tire manufacturer making and selling tires to Ford to be used in their new cars. B. Toyota, a Japanese car company, producing cars in the United States. C. a U.S. professor taking a year off to teach at the London School of Economics. D. Jane's purchase of a used car after her old car is destroyed in an accident.

Toyota, a Japanese car company, producing cars in the United States.

A minimum wage is: A. a labor market price floor. B. an employment protection law. C. the equilibrium wage in an unskilled labor market. D. a labor market price ceiling

a labor market price floor.

Dumping occurs when a firm: A. charges a price in a foreign market that is lower than the foreign producers' production costs. B. charges a higher price to a foreign market than it does in its home market. C. charges a price in a foreign market that is lower than its production cost. D. stops selling to a foreign market due to excessive tariffs.

charges a price in a foreign market that is lower than its production cost.

Which is NOT likely an ultimate cause of economic growth around the world? A. historical differences B. geographical locations C. luck D. communal resources

communal resources

Autarky refers to: A. the equilibrium a nation reaches after trade begins. B. a situation in which there is no trade. C. a situation in which nations trade goods and services. D. a nation in the Middle East.

a situation in which there is no trade.

Which scenario has the greatest potential for free riding? A. a system in which work effort and pay are not connected B. a dishonest government that promotes corruption C. secure property rights D. an unstable political system

a system in which work effort and pay are not connected

Growth in nominal GDP over time can be caused by: A. an increase in prices over time. B. an increase in both prices and production over time. C. neither an increase in prices nor an increase in production over time. D. an increase in production over time.

an increase in both prices and production over time

A set of tires installed on a vehicle in an automobile factory is counted as: A. a final good and its market price is part of GDP. B. a final good and its market price is not part of GDP. C. an intermediate good and its market price is part of GDP. D. an intermediate good and its market price is not part of GDP.

an intermediate good and its market price is not part of GDP.

Which of the following would be most effective in reducing "free riding" in a communal farming system? A. increasing penalties for low production B. increasing supervision of workers C. assigning property rights D. increasing physical capital

assigning property rights

Although domestic consumers gain more from free trade than domestic producers lose, the matter may not be that simple. Why might domestic producers also gain from free trade policies over those that impose tariffs on all goods? A. because domestic producers also consume at least some imported goods that cost less B. because foreign producers will be even worse off C. because domestic prices are higher under free trade than under protectionism D. because the gains from free trade are random. It is impossible to say who will get them

because domestic producers also consume at least some imported goods that cost less

Around the world, about one _____ people have incomes of less than $2 per day. A. trillion B. billion C. million D. thousand

billion

(Table: Unemployment Statistics for Country X) Using the data in the table, Country X is likely to be in a recession in: A. 2005. B. neither 1995 nor 2005. C. 1995. D. both 1995 and 2005.

both 1995 and 2005.

Eliminating tariffs on imported sugar would: A. cause resources to be reallocated from sugar production to higher-valued uses. B. allow U.S. producers to sell more sugar. C. cause resources in the sugar industry to be allocated to inferior uses. D. harm domestic consumers.

cause resources to be reallocated from sugar production to higher-valued uses.

In the past 100 years, there has been a decline in the use of unpaid child labor on family farms. Therefore: A. changes in GDP understate the true increase in production over the past 100 years. B. there has been no change in production over the past 100 years. C. there has been no change in GDP over the past 100 years. D. changes in GDP overstate the true increase in production over the past 100 years.

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

GDP includes the: A. current market value of used cars. B. current market value of government purchases of goods and services. C. sales of stocks and bonds at current market prices. D. current market value of all existing homes, regardless of when they were built.

current market value of government purchases of goods and services.

Which type of unemployment is likely to be higher when real GDP growth is lower? A. frictional unemployment B. structural unemployment C. natural unemployment D. cyclical unemployment

cyclical unemployment

An increase in import trade tends to ______ domestic prices. A. decrease B. increase C. hold constant D. have an indeterminate effect on

decrease

Decreases in the level of political stability in a country tend to: A. increase per capita GDP. B. increase per capita GDP at lower levels of stability, but decrease per capita GDP at higher levels of stability. C. have no impact on per capita GDP. D. decrease per capita GDP.

decrease per capita GDP.

Gross domestic product is the market value of all: A. final goods and services produced by a country's permanent residents, wherever located, in a year. B. goods and services produced within a country in a year. C. goods and services sold within a country in a year. D. final goods and services produced within a country in a year.

final goods and services produced within a country in a year.

GDP is calculated by: A. adding the prices of all goods and services in an economy. B. multiplying the quantity of all goods and services by their prices and adding together the results. C. dividing the quantity of all goods and services by their prices and adding together the results. D. adding the quantities of all goods and services in an economy.

final goods only are included in GDP.

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. A. less than B. greater than C. unrelated to D. equal to

greater than

Countries that have high per capita GDP tend to have: A. high levels of all three factors of production. B. high levels of human capital per worker. C. high levels of physical capital per worker. D. high levels of technology per worker.

high levels of all three factors of production.

The implicit tax on working is less than 1% in the United States and over 2% in Belgium. Given this, we would expect: A. higher unemployment in Belgium. B. higher labor force participation in Belgium. C. higher labor force participation in the United States. D. higher unemployment in the United States.

higher labor force participation in the United States

If the world price of cotton is less than the price that would occur domestically without trade, then a country will: A. export cotton. B. import cotton. C. increase its demand for cotton, and decrease its demand for cotton substitutes. D. decrease its demand for cotton, and increase its demand for cotton substitutes.

import cotton.

Suppose you spent $10,000 in 2010 remodeling your house, which you originally built for $200,000 in 2000. As a result, GDP in 2010 would: A. increase by $200,000. B. not change. C. increase by $10,000. D. increase by $210,000.

increase by $10,000.

If a national government improves its unemployment benefits, its unemployment rate will most likely: A. decrease. B. increase. C. remain the same. D. follow the global trend, regardless of national policy.

increase.

A developing country could buy (or be given) _____ and _____ more easily than _____. A. human capital; technological knowledge; physical capital B. technological knowledge; physical capital; human capital C. human capital; work experience; technological knowledge D. physical capital; human capital; technological knowledge

increasing technological knowledge

High-income economies generally have _____ that incentivize individuals' self-interest by using _____. A. institutions; legal penalties B. central planners; profit-seeking motives C. government mandates; legal penalties D. institutions; profit-seeking motives

institutions; profit-seeking motives

When the world price is below the domestic price, the elimination of a tariff decreases domestic production and provides a benefit because: A. it frees up resources that can be used to produce other goods and services. B. it makes producers better off. C. it causes unemployment when workers are laid off. D. no one is harmed by the decreased production, and everybody pays lower prices.

it frees up resources that can be used to produce other goods and services.

Which of the following is (are) NOT an institution of economic growth? A. competitive and open markets B. honest government C. labor unions D. property rights

labor unions

Which is NOT an example of an institution that creates incentives aligning self-interest with the interest of society? A. well-defined property rights B. political stability C. competitive markets D. low inflation

low inflation

Trade restrictions: A. may save jobs in one industry but at a cost of less job growth in other industries. B. help to save jobs in the protected industry, which causes these workers to spend more money in other industries, netting increased output and job opportunities throughout the economy. C. often have little support by politicians, media, and the public. D. are a very inexpensive way of saving jobs, cheaper than job retraining programs.

may save jobs in one industry but at a cost of less job growth in other industries.

Trade restrictions based on national security concerns: A. might be beneficial in certain cases, like vaccinations. B. have no merit and are always unwise. C. give little incentive for industry lobbyists to declare their product vital for national security purposes. D. have never been granted in the United States.

might be beneficial in certain cases, like vaccinations.

Which is NOT an example of physical capital? A. money B. computers C. cell phones D. tractors

money

The value of volunteer services is: A. included in GDP and should be because a service is produced. B. not included in GDP, but should be because a service is produced. C. not included in GDP and should not be because nothing tangible is produced. D. included in GDP, but should not be because nothing tangible is produced.

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: A. nothing; they are not included as part of GDP. B. government purchases. C. investment. D. consumption.

nothing; they are not included as part of GDP.

Governments can use tariffs to help domestic firms act like a cartel when selling to international buyers: A. but there are no actual examples of governments trying to do this. B. only if international buyers have few substitutes for the domestic good. C. if it's unlikely that other governments would impose retaliatory tariffs. D. and if all governments do this, greater gains are realized by all countries.

only if international buyers have few substitutes for the domestic good.

The value of a country's GDP exceeds that of the country's GNP if the value of the: A. country's imports exceed the value of its exports. B. country's exports exceeds the value of its imports. C. output produced by foreign workers in the country exceeds the value of output produced by the country's permanent residents in other countries. D. output produced by the country's permanent residents produced in other countries exceeds the value of output produced by foreign workers in the country.

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? A. the extent of government support in free markets B. good incentives C. good luck D. physical capital

physical capital

Import bans, import quotas, voluntary export restraints, and tariffs on goods all: A. increase imports and raise prices for consumers. B. increase imports and reduce prices for consumers. C. reduce imports and prices for consumers. D. reduce imports and raise prices for consumers.

reduce imports and raise prices for consumers.

For most of recorded human history, real GDP per capita has: A. decreased at a modest rate. B. increased at a modest rate. C. increased at a rapid rate. D. remained about the same.

remained about the same.

When workers lose their jobs and become officially unemployed, the number of people in the labor force: A. increases. B. becomes difficult to predict. C. remains constant. D. decreases.

remains constant.

Property rights encourage: A. saving and investment in both physical and human capital. B. investment in physical capital. C. investment in human capital. D. saving.

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 _____. A. slow; of a lack of a dependable legal system B. high; most of the institutions needed for growth are in place C. slow; of uncertainty due to an unstable political system D. high; once a group comes to power all the institutions needed for growth exist

slow; of uncertainty due to an unstable political system

Which is NOT an important institution for growth? A. a low level of corruption B. a dependable legal system C. free markets D. strong regulation of religious belief

strong regulation of religious belief

The shift toward more of a service economy and less of a manufacturing economy in the United States has caused an increase in: A. frictional unemployment. B. cyclical unemployment. C. seasonal unemployment. D. structural unemployment.

structural unemployment.

Which are immediate causes of the wealth of nations? A. institutions and incentives B. technical knowledge and human capital C. customs, practices, and social norms D. property rights and honest government

technical knowledge and human capital

The key reason for China's growth miracle beginning in the late 1970s was: A. pure luck. B. increases in foreign investment from developed countries. C. the enforcement of communal property. D. the assignment of private property rights.

the assignment of private property rights.

Orrin mines iron ore, which he sells to Thorin, who turns iron ore into steel. The steel is sold to Gorin, who turns the steel into battle axes. The battle axes are sold by a merchant in the city to adventurers. Which of the following would be considered a final good? A. the battle axes sold to the merchant B. the battle axes sold to the adventurers C. the steel D. the iron ore

the battle axes sold to the adventurers

Strategic trade protectionism makes: A. all countries better off. B. foreign countries better off at the expense of the domestic country. C. no one better off. D. the domestic country better off at the expense of foreign countries.

the domestic country better off at the expense of foreign countries

Which of the following elements reduces structural unemployment? A. the extension of unemployment benefits B. the existence of employment protection laws C. the growth of labor unions D. the enhancement of worker retraining programs

the enhancement of worker retraining programs

If the United States bans the importation of Japanese automobiles: A. there will likely be more U.S. auto workers but fewer Americans working in other industries. B. everyone in the United States will be much better off. C. U.S. consumers of cars will be better off because their consumer surplus increases. D. U.S. producers of cars will be worse off because their producer surplus shrinks.

there will likely be more U.S. auto workers but fewer Americans working in other industries.

When an economic system changes from using a collective property rights system to something closer to private property rights, the immediate effect is: A. less efficient organization of resources. B. to increase regulation, resulting in less market activities. C. to increase investment, work effort, and productivity. D. to decrease investment, work effort, and productivity.

to increase investment, work effort, and productivity.

The presence of discouraged workers causes the measured unemployment rate to be: A. correctly stated. B. overstated. C. either overstated, understated, or correctly stated. D. understated.

understated.

Which of the following is NOT considered a government purchase? A. levees built by the Army Corps of Engineers B. unemployment checks C. new rifles for the military D. salaries for public school teachers

unemployment checks

History has shown that when collective property rights are converted to private property rights: A. investment in physical capital increases. B. productivity increases. C. work effort increases. D. work effort, investment, and productivity all increase.

work effort, investment, and productivity all increase.