Macro Exam 1

Refer to Table 24-2. What was country A's investment in 2019?

$1999

Suppose that you have received $300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and earn 5 percent interest. The opportunity cost of spending the money today, in terms of what you could have after one year, is ____

$315

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP?

$40 billion

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 percent

Refer to Table 24-3. What are the GDP deflator and the inflation rate for 1931?

9.16, -10.3

For which of the following individuals would the opportunity cost of going to college be highest?

A famous, highly paid actor who wants to take time away from show business to finish college and earn a degree

Other things the same, which of the following would increase productivity?

An increase in either human or physical capital

Refer to Figure 4-10. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

Point A to Point B

Refer to Figure 4-10. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

Point A to Point D

Which of the following is an example of human capital?

The skills and knowledge you acquire in college through formal education and training

True or False: If consumption is $7000, exports are $600, government purchases are $2000, government transfer and social security payments are $900, imports are $800, and investment is $1000, then GDP is $9,800.

True

An organization that tries to encourage the flow of investment from advanced countries to developing countries is the ________-

World Bank

If the United States decides to trade with Yemen, we know that ________

Yemen and the US can both benefit

Refer to Figure 4-1. The movement from point A to point B on the graph is caused by _______

a decrease in price

If an externality is present in a market, economic efficiency may be enhanced by _____

a government intervention

Refer to Figure 4-1. The movement from point A to point B on the graph shows ________

an increase in quantity demanded

If muffins and bagels are substitutes, a higher price for bagels would result in

an increase in the demand for muffins

Refer to Figure 4-4. The movement from point A to point B on the graph is caused by _________

an increase in the price of the good

Refer to Figure 4-4. The movement from point A to point B on the graph is called ________

an increase in the quantity supplied

Real GDP is the yearly production of final goods and services valued at ______

constant prices

For a very long time the country of Zeeland has had an inflation rate of 9 percent. Suddenly its inflation rate drops to 3 percent. The drop in the inflation rate ______

could be due to slower money supply growth. We would expect unemployment to be higher

Suppose you like to make, from scratch, pies filled with bananas and vanilla pudding (i.e. bananas and vanilla pudding are complements). You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would _________

decrease

Refer to Figure 26-1. The curve becomes flatter as the amount of capital per worker increases because of ______

diminishing returns to capital

The terms equality and efficiency are similar in that they both refer to benefits to society. However, they are different in that ______

equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources.

Social security payments are _______

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

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in ________

foreign direct investment

In recent decades, Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks have engaged in _______

foreign portfolio investment

Gross domestic product measures _____

income and expenditures

Suppose that you plan your activities for a hot summer day. You would like to go to the local swimming pool and see the latest blockbuster movie. However, the only available ticket is for the same time that the pool is open. So you can only choose one activity. This illustrates the basic principle that ________

people face tradeoffs

Economic Growth of a country is measured as _________

percentage change in real GDP

The catch-up effect refers to the idea that ______

poor countries have low levels of initial capital, so they grow faster and can catch up with rich countries

The one variable that stands out as the most significant explanation of large variations in living standards around the world is ______

productivity

If real GDP doubles and the GDP deflator doubles, then nominal GDP

quadruples

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

quantity will fall and the effect on price is ambiguous

Suppose that a new government is elected in Eurnesia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting. These changes will probably raise ____________

real GDP per person and productivity in Eurnesia

After much consideration, you have chosen Ireland over Spain for your Study Abroad program next year. However, the deadline for your final decision is still months away and you may reverse this decision. Which of the following events could prompt you to reverse this decision?

the marginal benefit of going to Spain increases

When computing the cost of attending a concert you should include _____

the price you pay for the ticket and the value of your time

Ashley bakes bread and sells it at the local farmer's market. If Ashley purchases a new convection oven that reduces the costs of baking bread, __________

the supply of Ashley's bread will increase

Economics is the study of how society manages its _______

unlimited wants and limited resources

Refer to Table 24-3. What was the growth rate of real GDP for 1930?

−8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.