Reference no: EM13206192

1. Which of the following statements regarding Gross Domestic Product is not true?
It is a stock variable.
It is measured for a particular time period, usually one year.
It is perhaps the most effective means of viewing the same economy over time
It is a measure of the economy's performance

2. Long-term growth in production can be partially explained by
trade surpluses that lead to accumulations of precious metals
a gradual but consistent increase in the price level
general optimism about the future and the pioneering spirit of America
improvements in technology

3. Which of the following explains why the aggregate demand curve slopes downward?
If the price level increases, we feel poorer and therefore buy less.
If the price level increases, we feel richer and therefore buy more.
If domestic prices increase, we substitute domestic goods for imported ones.
If the price of a particular good increases, we substitute away from that good.

4. Adam Smith's "invisible hand" explains
why people act in their own best interests
why the government intervenes to overcome failures in private markets.
how people, acting out of self-interest, unintentionally promote the general good
how comparative advantage and specialization promote international trade

5. According to Keynes, in order to get the economy out of a recession, the government should
plan for a budget deficit
encourage firms to export to other nations, thereby jump-starting the economy
follow an expansionary monetary policy
follow a contractionary monetary policy

6. The difference between human capital and physical capital is that
human capital is used by humans whereas physical capital is not
only human capital increases labor productivity
human capital is not physical; an example of human capital is education
physical capital requires investment, whereas human capital does not

7. An improvement in the quality of capital would
rotate the per-worker production function upward
make the per-worker production function flatter
shift the per-worker production function downward
rotate the per-worker production function downward

8. The rules of the game refer to
any factor that facilitates production and exchange
a gradual but consistent change in the price level until a fair price is attained
the set of election laws that ensure that all votes are counted in every election
the requirements place on firms earning a profit

9. Which of the following best describes the impact of technological change on labor?
It causes unemployment in the short run and lower incomes in the long run
It causes unemployment in the short run and higher incomes in the long run.
It causes unemployment in the long run and higher incomes in the short run.
It causes unemployment in the long run and lower incomes in the short run.

10. An increase in the amount of capital per worker is called
capital deepening
marginal capital
per-worker production function
human capital