Econ Test 2 pool

Ace your homework & exams now with Quizwiz!

GDP calculations are performed by the

Bureau of Economic Analysis

Which of the following activities is considered an investment for calculating GDP?

a college builds a new lab (aka new production)

According to the Solow model, a greater investment rate leads to

an increase in steady-state output

The difference between a final good and an intermediate good is that

an intermediate good is sold for use as a component of a final good.

Conditional convergence predicts that if two countries have the same steady-state level of output, the poorer country will eventually

catch up with the richer country because it will grow faster.

The expenditure approach to calculating GDP states that GDP is equal to

consumption + investment + govn't spending+ net exports

Good regulations

ensure that markets are open and competitive.

To avoid double accounting, the value of

final goods only are included in GDP

Property rights that are not well-defined encourage

free riders

Honest government ______ economic growth.

fuels

Property rights ______ economic growth

fuels

the larger the spillovers, the stronger the argument for

government subsidies

Capital growth is the difference between

investment and depreciation.

In a steady state the level of investment

is equal to depreciation

Technological knowledge is the

knowledge about how the world works that is used to produce goods and services.

In the Solow model production function, Y = F(A, K, eL), L stands for

labor

Conditional convergence implies that there is ______ relationship between real GDP per capita and subsequent growth.

negative

In the Solow model, holding all else constant increases in physical capital

raises output only after reaching the steady state

If we want to compare GDP over time, we should always look at

real GDP

Hans Rosling claims that an entirely new converging world emerged:

since 1948

Which of the following can drive long-run economic growth in the Solow model?

technological knowledge

A production function can be used to express the relationship between ______ and GDP.

the factors of production

GDP per capita is

the market value of all final goods and services produced within a country in a year divided by population.

The production function is a mathematical function that shows

the relationship between inputs and the quantity of output produced.

With possible spillover of ideas, there will be

too little investment in R&D

When GDP per capita goes up by 10 percent

total income per person goes up by 10 percent, but the distribution may vary.

A good is not rivalrous if

two or more people can consume it at the same time.

Research and development of new ideas that lead to spillover effects tend to be

underprovided in markets.

Which of the following accounts for the largest factor payment in the U.S. GDP?

wages

Recently (as of 2010), GDP per capita in the United States was approximatelY

$46,000

If a country has 5 percent real GDP growth and 5 percent population growth, how much per capita real GDP growth does it have?

0%

According to Matt Ridley, exchange of goods between groups is _____ times as old as farming

10

If the average annual growth rate of a country increases from 2 percent to 3 percent, how much faster will GDP double?

11 2/3 years faster

Real GDP for the year 2000 (measured in 2005 dollars) is equal to

2005 prices × 2000 quantities

if the avg annual growth rate of a country increases from 1 %. to 2%, how much faster will GDP double?

35 years

If POPold= 600 and next year is POPnew= 624, what is growth rate of pop?

4% (624-600)/600

At an annual growth rate of 1.4%, how long does it take for real GDP per capita to increase from $30K to $60k in a country?

50 years

According to Cowen & Tabarrok, what institutions encourage investment and the efficient organization of the factors of production?

- competitive & open markets - dependable legal system - property rights - honest gown;t - political stability

What helps a country develop from catch-up growth to cutting-edge growth?

- encouraging education focused on creativity/problem solving -increasing population of innovators -institutions that create incentives to conduct research

At an average growth rate of 4 percent, how long would it take for an economy to double its GDP?

17.5

If U.S. per capita GDP is $50,000 and grows at 2 percent per year, what will U.S. per capita GDP be in 70 years?

200,000

according to Hans Rosling, in 2009 the world's poorest country (which he attributes to being stuck in civil war) was

Congo

in nations with large underground, illegal sectors

GDP will underestimate total production in economy

Describe growth patterns in world post-WWII

Japan & South Korea experienced rapid growth while Argentina & Nigeria experienced slow growth

Conditional convergence implies that there is ______ relationship between real GDP per capita and subsequent growth

a negative

The cost of negative externalities that harm the environment, such as pollution costs,

are not included in GDP

non market production is not counted in GDP because the activities:

are not priced

If a country's investment rate is less than its depreciation rate, then eventually

both capital stock & growth rates will fall

If gamma decreases in the Solow model, other things held constant, then capital growth

decreases

A Solow growth model features ______ returns to human capital, ceteris paribus.

decreasing

Examples of good economic institutions

dependable legal system low level of corruption competitive and open markets

according to Matt Ridley, ideas are combined and recombined to produce new innovations primarily through_______

exchange

The level of capital stock increases when investment in capital is

greater than depreciation

Marginal product of capital is ______ in China relative to marginal product of capital in developed economies.

high

______ is produced by an investment of time and other resources in education, training, and experience.

human capital

In the Solow model production function, Y = F(A, K, eL), A stands for

ideas

In the Solow model, an increase in the investment rate will _____ the amount of capital needed to achieve a steady state of output.

increase

If gamma increases in the Solow model, other things held constant, then capital growth

increases

As other countries grow wealthier, the incentive to undertake research and development projects

increases, since the potential for profits rises

Many economists are optimistic about the future of economic growth, mostly because

increasing populations worldwide mean added incentives for research and development.

The optimal private investment in R&D would likely be __________ the optimal social investment.

less than

Diminishing returns to capital implies that

marginal product of capital is decreasing

Countries with greater amounts of capital have

more depreciation

When the size of the market grows,

more resources are spent in research and development

A tractor, built in 2001 and still operated today is

part of today's national wealth but not part of today's GDP.

The following are the factors of production in the Solow growth model:

physical capital, human capital, and ideas

The three primary factors of production are

physical capital, human capital, and technological knowledge

What are factors of production in Solow:

physical capital, human capital, ideas

The formula that represents the generation of ideas (A) is

population × incentives × ideas per hour

According to the first figure in Chapter 7 in the text, per capita GDP and infant survival rates are ______ across countries.

positively related

In the Solow production function, an increase in the term "A" refers to an increase in

productivity growth

Which of the following would help a country develop from catch-up growth to cutting-edge growth?

spillovers from idea production

The factor income approach to calculating GDP states that GDP is equal to

wages + rent + interest + profit.

Long-run economic growth cannot be due to capital growth alone because econ growth is _____ at the steady state level of capital

zero


Related study sets

V. B. Types of Contracts Within the Statute of Frauds

View Set

李彦宏(Robin Li) 百度(Baidu CEO)上市那天的故事

View Set

Chapter 15 Micro Questions (Monopoly)

View Set

Personal Finance - Chapter 6 Quiz

View Set

Organizational Communication Chapter 2 Test

View Set

Chapter 21: Developmental Concepts

View Set

Web Browsers, Email and Safe Computing Quiz

View Set