Macroeconomics Mid Term #2

The value of production by a U.S. worker employed by a firm located in Canada is instituted in:

Canada's GDP only.

Catching-up growth due to:

Capital accumulation

Which countries will likely be growing faster: cutting-edge countries or catching-up countries?

Catching up

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

Physical Capital

Countries with high very GDP per capita tend to have a lot of:

Physical capital, human capital, and technological knowledge per worker.

Human capital is the:

Productive knowledge and skills that workers acquire through education, training, and experience.

Governments can play a role in supporting the production of new ideas by:

Protecting intellectual property

Which of the following is the best measure of a country's standard of living?

Real GDP per capita

Over the the past 200 years, economic growth in the United States has been:

Slow and consistent

Why does South Korea have a higher level of real GDP per capita than North Korea.

South Korea has a better system of incentives than North Korea.

Physical capital is the:

Stock of tools, including machines, structures, and equipment, used to produce output.

Human capital has which of the following properties:

- Diminishing Returns - Depreciation

Ideas are fostered by

- Institutions - Incentives

The Solow model predicts ____ economic growth in the steady state.

0%

According to the rule of 70, a country with an annual growth rate of 10% will double its GDP per capita in:

7 Years

In the United States, about ____ of all engineers and scientists work for private firms.

70%

A set of tires installed on a vehicle in an automobile factory is counted as:

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

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

An intermediate good is sold for use as a component in a final good.

The Solow growth model features_____ returns to physical capital.

Decreasing

According to the Solow model, when a country is in steady state

Depreciation=Investment

If 2009 prices are used in the calculation of real GDP, then nominal GDP will be______ real GDP in 2009.

Equal to

True or false: John Kay invented the flying shuttle during the Industrial Revolution and was financially rewarded for this innovatio

False

Which is NOT a factor of production?

Incentives

A real variable is one that:

Includes a correction for inflation.

The GDP deflator is a price index that can be used to measure:

Inflation

The Solow model predicts that countries with similar _________ will eventually converge to similar levels of output.

Institutions

Which of the following defines the "rules of the game" that structure economic incentives?

Institutions

In the Solow model, the capital stock doesn't change when

Investment= Depreciation

Two thousand years ago, per capita GDP (in 2010 dollars) was:

Less than $1,000

Ideas are not rivalrous, meaning that:

Many people can benefit from an idea at the same time.

Describes how much additional output its produced with each additional unit of capital

Marginal Product of capital

Which of the following would NOT be included in GDP for the United States?

Matt purchasing an antique desk for his new home office.

In a steady state, the capital stock:

Neither increases nor decreases.

Economists call the value of exports minus imports:

Net efforts

Cutting-edge growth is growth due to:

New ideas

Ideas are:

Nonrivalrous

For an industrialized country experiencing a 3% growth rate in real GDP, what is the most likely reason that real GDP per capita is decreasing?

The country's population is growing faster than the growth of real GDP.

Diminishing returns to capital implies that __________ diminishes as more capital is added.

The marginal product goods and services.

Real GDP per capita is calculated as the total real GDP divided by the:

Total Population

Which of the following would be included in GDP for the United States?

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

The number of potential ideas in the world is:

Unwillingly vast

Capital growth is equal to investment ________ depreciation

minus

In the equation Y=f(k), Y equals

output