Econ Final Exam

1%

2%

5%

10%

5%

4%

2.6%

-2.2%

The quantity of capital one worker can produce in one day

The quantity of output produced in one hour by one machine.

The quantity of output produced in one hour by several workers

The quantity of output produced by one worker or by one hour of work.

Sustained increaes in the labor force participation rate

Accumulation s of economic resources

Technological change

Increases in capital per hour worked

Always grows at a slower rate than potential GDP

Is the same as potential GDP if all firms in the economy were working at capacity.

Always grows at a faster rate than potential GDP

Always grows at the same rate as potential GDP

I=Y-C-G

I=Y+C+G

I=Y-C+G

I=Y+C-G

$5 billion

$ 15 billion

$ 45 billion

$55 billion

An increase in government purchases

An increase in taxes

An increase in transfers

All of the above would increase public savings

The demand for loanable funds decreases

The supply of loanable funds decreases

The supply of loanable funds increases

The demand for loanable funds increases

Employment rises, but income and production will continue to fall

Income and production will rise, but employment will continue to fall.

Income, production, and employment will continue to fall

Income, production, and employment will begin to rise.

Two consecutive quarters of declining nominal GDP

A significant decline in activity visible in industrial production, employment, real income, and wholesale/retail trade lasting more than a few months.

Two consecutive quarters of declining real GDP.

A significant decline in inflation and unemployment lasting more than a few months.

Inflation in the economy between this year and last year was 102%

There was deflation in the economy between this year and last year.

The CPI measures only the level of prices in a given year, not the percentage change in prices from one year to the next.

Inflation in the economy between this year and last year was 2%

4%

7%

10%

40%

Explains changes in nominal GDP per capita in the short run

Explains changes in real GDP per capita in the short run

Explains changes in real GDP per capita in the long run

Explains changes in nominal GDP per capita in the long run

States that the rate of technological change is determined outside the working of the market system

States that the rate of technological change is unaffected by economic incentives

States that the rate of technological change is caused by economic incentives.

Does not adequately explain the factors that determine productivity

Encouraging the use of trade secrets,expanding student loan programs, and increasing the minimum wage.

Reducing taxes on capital, increasing social security payments, and lowering the exchange rate

Increasing taxes on firms, eliminating patents, and increasing the minimum wage

Protecting intellectual property rights, subsidizing research and development, and subsidizing education

Countries with a weak rule of law have faster economic growth

Countries that enforce property rights through lawsuits have slower economic growth

Countries where favoritism and bribery are common have stronger rates of growth

Countries with a strong rule of law have faster economic growth

Cuases a deterioration in human capital and a decline in labor productivity

Cuases a deterioation in human capital and an increase in physical capital

Increases human capital and cause a decline in labor productivity

Causes a decline in physical capital and a decline in labor productivity

You purchase a plane ticket to China on American airlines

American airlines builds a hub in china

A stock broker from china sells you a chinese government savings bond

You buy a plan that was made in china

Increasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital

Increasing the supply of loanable funds, increasing the interest rate, raising the level of investment in physical capital

Increasing the supply of loanable funds, lowering the interest rate, lowering the level of investment in physical capital

Decreasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital

Because of the low birth rate in china, the labor force will soon decline.

Much of china's growth is likely due to the transition from a centrally-planned economy to a market economy to a market economy.

The united states invests more in research and development. than china does

The chinese migration of rural workers to more productive urban jobs.

C+I+depreciation-NX

C+I+G+NX

C+I+G

C+I+G-NX

There was unplanned decrease in inventories equal to $2 million

There was an unplanned increase in inventories equal to $2 million

There was was an unplanned decrease in inventories equal to $19 million

There was no unplanned change in inventories

Firm investment in inventories was less than anticipated in 2011

Firm investment in inventories was greater than anticipated in 2011

Aggregae expenditure is always less than GDP in developed countries

Aggregate expenditure is always less than GDP in developing countries

A decrease in consumption spending

No change in consumption spending

An increase in wealth

An increase in consumption spending

Consumption divided by disposable income

The change in disposable income divided by the change in consumption

The change in consumption divided by the change in disposable income

Disposable income divided by consumption

The multiplier effect occurs when autonomous expenditure changes

The multiplier rises as the MPC rises

The multiplier is a value between zero and one

The smaller the MPS, the larger the mulitiplier