Exam 2

In the podcast, what is argued as the main reason for why the U.S. won World War II?

The size of the U.S. industrial complex

BMW (a German auto manufacturer) has decided to build a new factory in the United States. Which of the following statements is true?

This will increase U.S. GDP

Which of the following persons is considered to be unemployed?

Tiffany, who is going on interviews, hoping to get her first job

Unemployed workers who voluntarily quit their jobs to search for a better position are categorized as _____ unemployed.

frictionally

An economy has a population of 226,500, of whom 12,500 are unemployed and actively seeking work, and 35,000 have given up looking for a job. Also, 28,000 people work part-time, and 151,000 people work full-time. This economy's unemployment rate is _____.

6.5%

According to the table, the number of people in the labor force is: Population 210 Military 30 Employed 100 Unemployed seeking work 30 Discouraged workers 20 Unpaid family members working 15-plus hours 10 Retired 20

140

If an economy's GDP will double in 25 years, then its growth rate must be about

2.8%

Years after the inception of GDP, why was Kuznets upset at the way politicians and laypersons were using GDP?

GDP was being misinterpreted as a measure for well-being

Given the form of a typical production function, which of these would have the greatest impact on the output of a country?

Entrepreneurial ability/technology increases by 12%.

The concept of "the economy" as we know it today, was not commonly spoken of or referred to until ____________.

The Great Depression

Which of the following represents the smallest percentage of U.S. GDP, as measured using the income approach?

net interest

During the 1970s, when handheld calculators became popular and replaced slide rules in performing computations, workers in the slide rule industry lost their jobs. These workers' unemployment status is:

structural

The unemployment rate is:

the number of unemployed divided by the labor force.

Suppose the market basket of goods and services cost $3,500 in 1996 but today costs $4,250. Using 1996 as the base year, the consumer price index for today is:

121.4

Consider the production function: output (y) = A x f(L, K, H, N) Total factor productivity (A) would NOT change if a(n):

civil war ended (wrong)

As a measurement, GDP is a single number that measures ___________. National Income B) National Output C) National Expenditure D) National Production E) All of the above.

All of the above.

Based on the circular flow diagram covered in chapter 5, which of the following statements is true?

National income=national spending

Which of the following should be used when comparing the average individual wealth between two countries?

Real GDP per capita (PPP)

What is the name of the economist credited with the invention of Gross Domestic Product (GDP)?

Simon Kuznets

The term "full employment" generally refers to a situation in which everyone who wants a job can have one, however, the unemployment rate is still positive under full employment. Which of the following best describes the concept of full employment?

Under full employment, the unemployment rate = the natural rate of unemployment.

GDP = C + I + G + __

X-M

The key to being counted as unemployed by the Bureau of Labor Statistics is to be:

actively seeking work

"Diminishing returns to capital" provides an explanation for the case where

adding more capital fails to increase total output ceteris paribus

Which of the following will occur as a result of a recession? The unemployment rate will increase The price level with decrease (deflation) Interest rates will decrease Exports will rise Nominal GDP will decrease All of the above

all of the above

Which of these increases per-worker productivity?

an increase in skills in the labor force (i.e. increase in human capital)

Developing countries can achieve higher productivity per unit of capital because they can use technologies developed by other countries. This is known as the:

catch-up effect

From 1999 to 2002, the Japanese inflation rates were, respectively, -0.3%, -0.6%, -0.7%, and -0.7%. During this time, the Japanese economy underwent:

deflation

Which statement is NOT true? economic growth leads to increased consumption of goods and services economic growth leads to longer life expectancies economic growth leads to a more equitable distribution of income. economic growth leads to lower poverty rates.

economic growth leads to a more equitable distribution of income.

A production function says output per worker equals A × f(L/L, K/L, H/L, N/L) and tells us all of these EXCEPT _____ will lead to a better standard of living (as measured by real GDP per capita).

increases in population

Which of these is NOT a source of increases in productivity?

increases in population growth

The classical form of the production function states that:

output = f(L, K)