Question 1 of 40
An event that allows the economy to operate more efficiently by producing more outputs without using any more inputs is referred to as __________.
A. absolute progress
B. efficiency progress
C. capital investment
D. technological progress
Question 2 of 40
In a simple economy without government or foreign trade, any income not consumed is called __________.
A. investment
B. net investment
C. saving
D. depreciation
Question 3 of 40
When the government has a budget deficit or surplus, it enters the __________.
A. market for loanable funds
B. subprime housing market
C. bond market
D. government-sponsored mortgage lenders market
Question 4 of 40
If a firm increases its capital stock per person while holding constant the number of workers employed, the firm is said to experience __________.
A. capital augmentation
B. investment deepening
C. labor intensity
D. capital deepening
Question 5 of 40
Which of the following uses of tax revenues collected by the government leads to increased capital deepening?
A. building roads
B. increased foreign aid
C. Medicare payments
D. Social Security payments
Question 6 of 40
An increase in the capital stock will __________.
A. shift the production function downward
B. shift the production function upward
C. flatten the production function
D. steepen the production function
Question 7 of 40
In making accurate comparisons of GDP across countries, it is important to take differences in __________ into account.
A. population size ??
B. the average age of the population
C. family size
D. all of the above
Question 8 of 40
Nations with low levels of GDP per capita may converge to richer nations if __________.
A. nations with high levels of income experience a continuously increasing growth rate
B. nations with lower levels of income grow more quickly than those with higher levels of income
C. nations with lower levels of income spend less on investment
D. nations with lower levels of income grow more slowly than those with higher levels of income
Question 9 of 40
Convergence refers to closing the gap in __________ between poorer countries and richer countries.
A. real GDP
B. real GDP per capita
C. the growth rate in real GDP
D. the growth rate in real GDP per capita
Question 10 of 40
The fraction of additional income spent on imports is called the __________.
A. import function
B. marginal propensity to import
C. marginal propensity to export
D. trade balance
Question 11 of 40
According to the text, __________ is perhaps the most critical aspect of a country's economic performance.
A. growth in GDP
B. the inflation rate
C. the unemployment rate
D. the living standard
Question 12 of 40
It is possible for an economy to become more productive and per-capita output to increase if __________.
A. new ideas are generated
B. inventions are developed
C. technology is improved
D. all of the above
Question 13 of 40
An increase in the level of U.S. exports __________ the demand for goods and service produced in the United States.
A. decreases
B. increases ???
C. increases or decreases
D. does not affect
Question 14 of 40
If government increases spending and wants to maintain a balanced budget, it should __________.
A. decrease taxes by an equal amount
B. increase taxes by an equal amount
C. decrease taxes by an amount equal to the increase in spending multiplied by the tax multiplier
D. increase taxes by an amount equal to the increase in spending multiplied by the tax multiplier
Question 15 of 40
Fluctuations in the demand and supply of loanable funds will in turn bring changes to the __________ of lent and borrowed funds.
A. product recipient
B. mortgage-backed securities
C. equilibrium quantity
D. equilibrium quality
Question 16 of 40
Suppose that for a given firm, the increase in output resulting from the last worker hired is less than the increase in output of the previous worker hired. This is an example of __________.
A. diminishing returns
B. constant returns
C. increasing return
D. capital deepening
Question 17 of 40
The idea that investment in comprehensive education in developing countries leads to permanent increases in the rate of technological progress is an example of __________.
A. increasing economic inequality
B. capital deepening
C. new growth theory
D. a trade-off between human capital and technology
Question 18 of 40
The multiplier that arises from equal increases in government spending and taxes is called the __________.
A. simple multiplier
B. tax multiplier
C. balanced budget multiplier
D. government spending multiplier
Question 19 of 40
Trade deficits always lead to future decreases in consumption if the trade deficits __________.
A. support current investment
B. support current consumption
C. support either current investment or current consumption
D. require borrowing from abroad
Question 20 of 40
What happens to U.S. GDP when foreign countries experience prosperity?
A. It increases because the United States will export more product to those countries.
B. It decreases because the foreign countries will now buy more of their own products.
C. It decreases because the foreign countries will be able to export more at a lower cost.
D. It does not change because U.S. GDP is not affected by other countries' prosperity.
Macroeconomics Set-2 (1-20)
