Question

QUESTION 31

Which one of the following is a durable consumer good?

a.
office supplies that will be used up this year

b.
food

c.
a home computer

d.
gasoline

1 points

QUESTION 32

Durable consumer goods are goods that last more than

a.
five years

b.
three years

c.
one year

d.
seven years

1 points

QUESTION 33

The components of GDP using the income method are

a.
consumption expenditures, investment expenditures, and government expenditures

b.
consumption expenditures, investment expenditures, government expendiures, and net exports

c.
wages, interest, rents, and profits

d.
wages and interest

1 points

QUESTION 34

Which of the following statements is true?

a.
GDP = NDP

b.
GDP = NI

c.
GDP = GDI

d.
GDP = PI

1 points

QUESTION 35

Suppose Country A and Country B each have the same real Gross Domestic Product (GDP), equal to $440 billion. Country A has 100 million people and Country B has 175 million people. In this situation, per capita real Gross Domestic Product (GDP) is

a.
the same in both countries.

b.
higher in Country B.

c.
higher in Country A.

d.
an irrelevant factor.

1 points

QUESTION 36

Economic growth can be depicted as

a.
an outward shift on the production possibilities curve.

b.
a movement down on the production possibilities curve.

c.
a movement up on the production possibilities curve.

d.
an inward shift on the production possibilities curve.

1 points

QUESTION 37

Suppose per capita real GDP grows by 10% per year. Based on the Rule of 72, approximately how many years will it take for the level of per capita real GDP to double?

a.
72 years

b.
10 years

c.
1 year

d.
7 years

1 points

QUESTION 38

A small increase in the annual rate of economic growth can lead to a larger increase in growth over time due to the effects of

a.
averaging

b.
regression towards the mean

c.
the money supply

d.
compounding

1 points

QUESTION 39

Suppose that the per capita GDP for Japan in 2016 was $48,500 and in 2017 was $49,470. How much did the Japanese per capita GDP grow between 2016 and 2017?

a.
3 percent

b.
cannot be determined without further information

c.
5 percent

d.
2 percent

1 points

QUESTION 40

Productivity relates to

a.
producing the same output with more labor hours.

b.
working harder over time.

c.
working longer over time.

d.
producing the same output with fewer labor hours.

1 points

QUESTION 41

A long period of very little or no economic growth is commonly known as

a.
secular stagnation.

b.
deflation.

c.
a business cycle.

d.
economic recession.

1 points

QUESTION 42

In the table below there are three years of a basket of retail goods. From this information calculate the price index of 1990 if the base year in 1980? (Round your answer to the nearest whole number.)

Good Amount 1980 1985 1990
Tomatoes 25 $0.15 $0.25 $0.55
Milk 5 $1.50 $2.23 $2.95
Eggs 1 $1.00 $1.25 $1.50
a. 303
b. 152
c. 41
d. 245

Answer 1

QUESTION 31: The durable consumer good among the options given is a home computer. This is because office supplies will be used up within a year, food is a consumable item, and gasoline is also consumed. In contrast, a home computer is a durable good that is intended to last for a longer period of time.

QUESTION 32: Durable consumer goods are goods that last for more than three years. This means that they are designed to withstand wear and tear over an extended period.

QUESTION 33: The components of GDP using the income method are wages, interest, rents, and profits. This method calculates GDP by summing up the income earned by individuals and businesses within a country.

QUESTION 34: The statement that is true is "GDP = PI" which means that Gross Domestic Product is equal to Personal Income. GDP represents the total value of all goods and services produced within a country, while personal income is the amount of income received by individuals in the economy.

QUESTION 35: The per capita real Gross Domestic Product (GDP) is higher in Country B. This is because even though both countries have the same real GDP, Country B has a larger population. Per capita real GDP is calculated by dividing the real GDP by the population, so a larger population will result in a smaller per capita GDP.

QUESTION 36: Economic growth can be depicted as a movement up on the production possibilities curve. This curve represents the maximum amount of goods and services that can be produced given the available resources and technology. Economic growth occurs when there is an increase in the production capacity of an economy, allowing for more goods and services to be produced.

QUESTION 37: According to the Rule of 72, if per capita real GDP grows by 10% per year, it will take approximately 7 years for the level of per capita real GDP to double. The Rule of 72 is a formula used to estimate the time it takes for an investment or variable to double in value, based on its annual growth rate.

QUESTION 38: A small increase in the annual rate of economic growth can lead to a larger increase in growth over time due to the effects of compounding. Compounding occurs when the growth rate is applied to a growing base over multiple periods. As a result, even a small increase in the growth rate can lead to significant growth over time.

QUESTION 39: The Japanese per capita GDP grew by 2 percent between 2016 and 2017. This is calculated by taking the difference between the GDP values for the two years and dividing it by the initial GDP value (2016 GDP). In this case, the difference is $970 (49470 - 48500) and the initial GDP is $48500. Dividing $970 by $48500 and multiplying by 100 gives a growth rate of approximately 2 percent.

QUESTION 40: Productivity relates to producing the same output with fewer labor hours. It measures the efficiency with which inputs (such as labor, capital, and technology) are used to produce goods and services. Increasing productivity allows for higher output with the same amount of resources or the same output with fewer resources.

QUESTION 41: A long period of very little or no economic growth is commonly known as secular stagnation. It refers to a prolonged period of low or stagnant economic growth, often characterized by high unemployment, low investment, and low productivity growth.

QUESTION 42: To calculate the price index of 1990 using the base year of 1980, we need to compare the prices of the goods in 1990 to their prices in 1980.

For tomatoes, the price in 1990 is $0.55 and the price in 1980 is $0.15. To calculate the price index, divide the price in 1990 by the price in 1980 and multiply by 100: (0.55 / 0.15) * 100 = 366.67.

For milk, the price in 1990 is $2.95 and the price in 1980 is $1.50. Using the same calculation, the price index is (2.95 / 1.50) * 100 = 196.67.

For eggs, the price in 1990 is $1.50 and the price in 1980 is $1.00. The price index is (1.50 / 1.00) * 100 = 150.

To calculate the overall price index, we can take the average of the three price indices: (366.67 + 196.67 + 150) / 3 = 237.78.

Therefore, the price index of 1990, using the base year of 1980, is approximately 238.