oneforall44
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II. Choose the best answer to the following questions.
13. A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle in order are
a) expansion, peak, contraction, and trough.
b) expansion, trough, contraction, and peak.
c) contraction, recession, expansion, and boom.
d) trough, expansion, contraction, and peak.
14. Which of the following is measured in per capita GDP?
a) leisure
b) underground economic transactions
c) the services of homemakers
d) external benefits and costs
e) none of the above
15. If country A has a bigger underground economy than country B, and country A’s citizens work fewer hours per week than the citizens of country B, other things being equal, then
a) GDP comparisons between the countries would overstate the economic welfare of country A compared to B.
b) GDP comparisons between the countries would understate the economic welfare of country A compared to B.
c) it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries.
d) it would not introduce any bias in using GDP to compare economic welfare between the countries.
e) none of the above would be true.
16. Which of the following does not increase investment demand?
a)when technology progresses
b)when higher sales or higher profits are expected
c)when business taxes lowers
d)when inventories increase
17. Which of the following is not the way of financing government deficits?
a) by increasing tax rates
b)by increasing subsidies
c)by issuing government bonds
d)by printing paper money
18. If the equilibrium interest rate increases and quantity of funds traded in the loanable fund market decreases, it could have been caused by
a). investors becoming more optimistic about profit prospects.
b) investors becoming more pessimistic about profit prospects.
c) households deciding to save less.
d) households deciding to save more.
19. If a country has $12 trillion of real GDP in 2009, when will its real GDP be double if it grows at an annual growth rate of 7%?
a)2017
b)2019
c)2021
d)2023
20. In the long run, the most important determinant of a nation’s standard of living is
a) its rate of productivity growth.
b) its ability to export cheap labor.
c) its ability to control the nation’s money supply.
d) its endowment of natural resources.
21.A country will roughly double its GDP in twenty years if its annual growth rate is:
a)2.5 percent.
b)3.5 percent.
c)7.5 percent.
d)12 percent.
e)20 percent.
22.Which of the following is not true about the Human Development Index (HDI)?
a)It was created by Mahbub ul Haq
b)It completely replaced GDP
c)It considers life expectancy, adult literacy rates as well as GDP per capita
d)In the 2006 report, Norway received the highest value.
e)Since 1993, the UN Development Program has used it as a gauge of well-being
23. A nation can achieve higher economic growth if:
a)it devotes more resources to research and development.
b)the productivity of labor declines.
c)taxes are imposed on investment in capital.
d)more resources are allocated to consumption goods.
24. According to Robert Solow, why cannot capital accumulation be a ultimate source of sustainable economic growth?
a)because of diminishing marginal returns of capital
b)because of too high depreciation.
c) because of less-than-unity marginal propensity to consume
d) all of the above
25. Economic growth tends to be greater in countries where
a) the government effectively protects property rights.
b) more resources are devoted to research and development.
c) there is greater freedom to trade freely.
d) any of the above is true.
13. A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle in order are
a) expansion, peak, contraction, and trough.
b) expansion, trough, contraction, and peak.
c) contraction, recession, expansion, and boom.
d) trough, expansion, contraction, and peak.
14. Which of the following is measured in per capita GDP?
a) leisure
b) underground economic transactions
c) the services of homemakers
d) external benefits and costs
e) none of the above
15. If country A has a bigger underground economy than country B, and country A’s citizens work fewer hours per week than the citizens of country B, other things being equal, then
a) GDP comparisons between the countries would overstate the economic welfare of country A compared to B.
b) GDP comparisons between the countries would understate the economic welfare of country A compared to B.
c) it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries.
d) it would not introduce any bias in using GDP to compare economic welfare between the countries.
e) none of the above would be true.
16. Which of the following does not increase investment demand?
a)when technology progresses
b)when higher sales or higher profits are expected
c)when business taxes lowers
d)when inventories increase
17. Which of the following is not the way of financing government deficits?
a) by increasing tax rates
b)by increasing subsidies
c)by issuing government bonds
d)by printing paper money
18. If the equilibrium interest rate increases and quantity of funds traded in the loanable fund market decreases, it could have been caused by
a). investors becoming more optimistic about profit prospects.
b) investors becoming more pessimistic about profit prospects.
c) households deciding to save less.
d) households deciding to save more.
19. If a country has $12 trillion of real GDP in 2009, when will its real GDP be double if it grows at an annual growth rate of 7%?
a)2017
b)2019
c)2021
d)2023
20. In the long run, the most important determinant of a nation’s standard of living is
a) its rate of productivity growth.
b) its ability to export cheap labor.
c) its ability to control the nation’s money supply.
d) its endowment of natural resources.
21.A country will roughly double its GDP in twenty years if its annual growth rate is:
a)2.5 percent.
b)3.5 percent.
c)7.5 percent.
d)12 percent.
e)20 percent.
22.Which of the following is not true about the Human Development Index (HDI)?
a)It was created by Mahbub ul Haq
b)It completely replaced GDP
c)It considers life expectancy, adult literacy rates as well as GDP per capita
d)In the 2006 report, Norway received the highest value.
e)Since 1993, the UN Development Program has used it as a gauge of well-being
23. A nation can achieve higher economic growth if:
a)it devotes more resources to research and development.
b)the productivity of labor declines.
c)taxes are imposed on investment in capital.
d)more resources are allocated to consumption goods.
24. According to Robert Solow, why cannot capital accumulation be a ultimate source of sustainable economic growth?
a)because of diminishing marginal returns of capital
b)because of too high depreciation.
c) because of less-than-unity marginal propensity to consume
d) all of the above
25. Economic growth tends to be greater in countries where
a) the government effectively protects property rights.
b) more resources are devoted to research and development.
c) there is greater freedom to trade freely.
d) any of the above is true.