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. The introduction of a new good (Points 1) increases

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. The introduction of a new good (Points :1)
increases the cost of maintaining the same level of economic well-being.
decreases the cost of maintaining the same level of economic well-being.
has no impact on the cost of maintaining the same level of economic well-being.
may increase or decrease the cost of maintaining the same level of economic well-being, depending on how expensive the new good is.


7. Two alternative measures of the overall level of prices are (Points :1)
the inflation rate and the consumer price index.
the inflation rate and the GDP deflator.
the GDP deflator and the consumer price index.
the cost of living index and nominal GDP.


8. In 1949, Sycamore, Illinois built a hospital for about $500,000. In 1987, the county restored the courthouse for about $1.7 million. A price index for nonresidential construction was 24 in 1949, 108 in 1987, and 126.5 in 2000. According to these numbers, the hospital cost about (Points :1)
$2.1 million in 2000 dollars, which is less than the cost of the courthouse restoration in 2000 dollars.
$2.1 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars.
$2.6 million in 2000 dollars, which is less than the cost of the courthouse restoration in 2000 dollars.
$2.6 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars.


9. If the nominal interest rate is 8 percent and the real interest rate is 5.5 percent, then the inflation rate is (Points :1)
-2.5 percent.
0.45 percent.
2.5 percent.
13.5 percent.


10. If the nominal interest rate is 4 percent and the real interest rate is 7 percent, then the inflation rate is (Points :1)
-3 percent.
0.75 percent.
3 percent.
11 percent.


11. Ms. Take borrowed $1,000 from her bank for one year at an interest rate of 10 percent. During that year, the price level went up by 15 percent. Which of the following statements is correct? (Points :1)
Ms. Take will repay the bank fewer dollars than she initially borrowed.
Ms. Take's repayment will give the bank less purchasing power than it originally loaned her.
Ms. Take's repayment will give the bank greater purchasing power than it originally loaned her.
Ms. Take's repayment will give the bank the same purchasing power that it originally loaned her.


12. Which of the following is not correct? (Points :1)
The U.S. economy has never experienced deflation.
Since 1965, the U.S. nominal interest rate has exceeded the U.S. real interest rate.
Since 1965, the U.S. economy has experienced rising consumer prices every year.
During deflation, the real interest rate exceeds the nominal interest rate.


13. Over the past century in the United States, average income as measured by real GDP per person has grown about (Points :1)
4 percent per year, which implies a doubling about every 18 years.
4 percent per year, which implies a doubling about every 8 years.
2 percent per year, which implies a doubling about every 35 years.
2 percent per year, which implies a doubling about every 18 years.


14. For a given year, productivity in a particular country is most closely matched with that country's (Points :1)
level of real GDP over that year.
level of real GDP divided by hours worked over that year.
growth rate of real GDP divided by hours worked over that year.
growth rate of real GDP per person over that year.


15. Greater scarcity of a natural resource is indicated (Points :1)
by an increase in the price of the resource, whether the price increase is less than or greater than the rate of inflation.
only by an increase in the price of the resource that is less than the rate of inflation.
only by an increase in the price of the resource that is greater than the rate of inflation.
only by an increase in the price of the resource that is caused by a decrease in supply and is greater than the rate of inflation.


16. Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth? (Points :1)
A country with no or few domestic natural resources is destined to be poor.
Differences in natural resources have virtually no role in explaining differences in standards of living.
Some countries can be rich mostly because of their natural resources and countries without natural resources need not be poor, but can never have very high standards of living.
Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living.


17. It has been suggested that a possible benefit of rapid population growth is the likelihood that when there are more people, then there are more (Points :1)
teachers, and so students acquire more knowledge and skills.
people to discover things, and so technological progress is rapid.
savers, and so capital per worker tends to increase over time.
consumers, and so economic growth is more rapid.


18. The traditional view of the production process is that capital is subject to (Points :1)
diminishing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries.
diminishing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries.
increasing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries.
increasing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries.


19. On a production function, as capital per worker increases, output per worker (Points :1)
increases. This increase is larger at larger values of capital per worker.
increases. This increase is smaller at larger values of capital per worker.
decreases. This decrease is larger at larger value of capital per worker.
decreases. This decrease is smaller at larger value of capital per worker.


20. The opening of a new American-owned factory in Egypt would tend to increase Egypt's GDP more than it increases Egypt's GNP because (Points :1)
some of the income from the factory accrues to people who do not live in Egypt.
gross domestic product is income earned within a country by both residents and nonresidents, whereas gross national product is the income earned by residents of a country while producing both at home and abroad.
all of the income from the factory is included in Egypt's GDP.
All of the above are correct.
Submitted: 7 years ago.
Category: Homework
Expert:  Steve replied 7 years ago.
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