ECO100Y5 Chapter Notes - Chapter 7: Gross Domestic Product, Price Level, Market Basket
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Q1. Import quotas are a. methods for reducing imports by limiting the quantity of goods that can enter the country each year b. voluntary agreements by exporting countries to limit sales in a foreign country c. subsidies to foreign producers to encourage them to trade d. none of these Q2. Devices that set up multiple exchange rates between the currencies of two nations are known as a. tariff quotas b. export subsidies c. exchange controls d. variable currencies Q3. The international organization that replaced the General Agreement on Tariffs and Trade (GATT) is the a. World Bank b. Export-Import Bank c. World Trade Organization d. International Monetary Fund Q4. Dumping refers to the practice of a. flooding a foreign market with large quantities of a good b. selling a product abroad at a price below cost or below the domestic price c. exporting inexpensive products to foreign countries d. selling surplus goods abroad with counterfeit brand names Q5. Countries engage in trade because a. the exchange is mutually beneficial b. governments force industries to exchange c. international law dictates that exchange must take place d. all of these Q6. According to the U. S. Department of Commerce, all persons, unrelated or related, who occupy a housing unit comprise a. a family unit b. a household c. an extended family unit d. group living Q7. A country with an equal distribution of income will have a higher standard of living than a country with a more unequal distribution of income. a. true b. false Q8. Welfare caseloads tend to fluctuate with a. business cycles b. weather c. stock markets d. minimum wage rates Q9. The official poverty threshold line is adjusted annually for a. income taxes b. inflation c. average household size d. average family size Q10. For many welfare recipients, taking a job reduces income. a. true b. false Q11. It is true that a stable economy occurs when a. total injections into the circular flow are large enough to make up for government tax leakages b. total leakages from the circular flow are great enough to offset the effects of government spending c. total planned leakages from the circular flow are exactly equal to total planned injections into the circular flow d. actual saving is equal to planned investment Q12. The measure of income received by persons from all sources is known as a. personal income b. national income c. gross domestic product d. net national product Q13. Discharges of chemicals from a paper plant that pollute a nearby river represent an example of a. internal costs b. the underground economy c. social costs d. transfer costs |
21. The English word that comes from the Greek word for "one who manages a household" is
A- market
B- consumer
C- producer
D- economy
B- should be counted only to the extent that they are more expensive at college than elsewhere. C- usually exceed the opportunity cost of going to college. D- plus the cost of tuition, equals the opportunity cost of going to college. |
B- in most economies, wealthy people consume disproportionate quantities of goods and services. C- governments restrict the production of too many goods and services. D- resources are limited. |
B- markets guiding economic activity. Today many countries that did not have this system have implemented it. C- government guiding economic activity. Today many countries that had this system have abandoned it. D- government guiding economic activity. Today many countries that did not have this system have implemented it. |
B- we should agree with Senator Johnson. C- a good decision requires that we recognize both viewpoints. D- there are no tradeoffs between equity and efficiency. |
B- it does not matter if they charge $10 or $15. C- they would do better charging $15 than $10. D- they should raise the price even more. |
B- helps to explain how the economy is organized. C- incorporates all aspects of the real economy. D- Both (a) and (b) are correct. |
B- households provide firms with labor, land, and capital. C- firms provide households with output. D- firms provide households with profit. |
B- grew rapidly, due to several increases in the minimum wage during those decades. C- grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. D- grew slowly, due to the slow growth of the output of goods and services per hour of U.S. workers' time during those decades. |
Question 30. 30. For economists, statements about the world are of two types: |
A- assumptions and theories.
B- true statements and false statements.
C- specific statements and general statements.
D- positive statements and normative statements.
1. Which of the following groups of countries are all advanced economies?
Hong Kong, Japan, France, and the United Kingdom |
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Italy, the United States, China, and Russia |
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Singapore, Russia, France, and Chad |
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Australia, Brazil, and the United States |
QUESTION 2
1. The most people live in ________ economies and the fewest people live in ________ economies.
developing; emerging market |
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advanced; emerging market |
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emerging market; developing |
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advanced; developing |
QUESTION 3
1. Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and the ________ market.
goods; financial |
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government; goods |
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goods; factor |
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financial; factor |
QUESTION 4
1. As a factor of production, oil reserves are counted as
labor. |
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capital. |
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entrepreneurship. |
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land. |
QUESTION 5
1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.
Households are; the government determines |
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Firms are; households that determine |
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The government is; firms determine |
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Households are; firms that determine |
QUESTION 6
1. The emerging market economies are
the nations that are currently agricultural in nature. |
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most of the nations of Western Europe. |
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the largest grouping including the nations of China and India. |
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in the transition from state-owned production to free markets. |
QUESTION 7
1. In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income was
consumption of goods and services. |
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entrepreneurship. |
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capital. |
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labor. |
QUESTION 8
1. Items bought by individuals to provide personal enjoyment are termed
personal goods. |
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consumption of goods. |
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consumption or investment goods. |
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standard goods. |
QUESTION 9
1. In the advanced economies, ________ of the factories use advanced capital equipment and in the developing economies ________ of the factories use advanced capital equipment
virtually all; none |
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some; some |
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virtually all; virtually all |
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virtually all; some |
QUESTION 10
1. The productive resource that includes all the "gifts of nature" is called
land. |
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labor. |
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entrepreneurship. |
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capital. |
QUESTION 11
1. What would be an example of government good?
Donald Trump purchases furniture for his office. |
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Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
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The local driver's license office purchases a new digital camera and printer. |
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Jake buys an iPhone. |
QUESTION 12
1. The world population is approximately ________ people.
2 trillion |
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680 million |
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6.8 billion |
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6.8 million |
QUESTION 13
1. Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
U.S. exports of goods and services. |
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U.S. government goods and services. |
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foreign capital goods. |
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U.S. consumer goods and services. |
QUESTION 14
1. Of the following, the federal government obtains most revenue from
corporate income taxes. |
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excise taxes. |
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sales taxes. |
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social security taxes. |
QUESTION 15
1. Items bought by businesses to help produce other goods and services are called
capital goods. |
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government goods and services. |
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consumption of goods and services. |
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exports of goods and services. |
QUESTION 16
1. The majority of the income earned in the United States is paid in
profit. |
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interest. |
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rent. |
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wages. |
QUESTION 17
1. Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market
must include a written contract between buyers and sellers. |
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requires a physical location for buyers and sellers to get together. |
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is only a place to purchase groceries. |
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is an arrangement that brings buyers and sellers together. |
QUESTION 18
1. The United States possesses a large amount of human capital. As a result of this fact, in the United States, there is a
highly skilled and educated labor force. |
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a large number of kind and generous humans. |
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a large number of people and a great deal of land. |
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a large amount of machinery and equipment. |
QUESTION 19
1. Which of the following correctly lists the categories of factors of production?
labor, machines, buildings, capital, and entrepreneurship |
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land, buildings, capital, and entrepreneurship |
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land, labor, capital, and entrepreneurship |
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forests, fish, buildings, capital, and entrepreneurship |
QUESTION 20
1. Which of the following correctly lists the categories of factors of production?
capital, money, and labor |
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hardware, software, land, and money |
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land, labor, capital, and entrepreneurship |
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machines, buildings, land, and money |
QUESTION 21
1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.
10 |
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3 |
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15 |
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20 |
QUESTION 22
1. What would be an example of a consumption service?
Jake buys an iPhone. |
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The local driver's license office purchases a new digital camera and printer. |
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Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
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Rhianna gets a haircut. |
QUESTION 23
1. The total value of capital in the United States is around
$47 trillion. |
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$10 trillion. |
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$100 trillion. |
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$79 trillion. |
QUESTION 24
1. An export good is a good produced
by foreigners in the United States and purchased by U.S. households. |
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in another country and purchased by U.S. residents. |
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in the United States and sold to foreigners living in the United States. |
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in the United States and sold in other countries. |
QUESTION 25
1. ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the use of capital.
Interest is; wages are; profit is |
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Rent is; wages are; interest is |
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Rent is; interest is; wages are |
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Mortgages are; interest is; wages are |