ECO 202 Principles of Macroeconomics MCQs Assignment 2016

Question # 00209414 Posted By: Prof.Longines Updated on: 02/29/2016 12:12 AM Due on: 02/29/2016
Subject Economics Topic Macroeconomics Tutorials:
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1. What are the two components of? technology?

?(Check only two?.)

A.

The need for more workers to produce more complex goods.

B.

The enablement of globalization and the ability to use? low-cost workers.

C.

The knowledge of how to produce new products.

D.

A more efficient means of production.

2. In? 2011, China revised its poverty line upward to? 2,300 yuan per? year, or 6.3 yuan per day. At the prevailing exchange? rate, this was equal to a little less than a single U.S. dollar. Some commentators felt that? China's poverty line fell short of the World? Bank's poverty line of? $1.25 per? day, in 2005 purchasing power parity?(PPP) U.S. dollars.

Would you? agree?

A.

?Yes, since both values are adjusted by the prevailing exchange rate.

B.

?No, since it is not a good comparison to measure Chinese poverty against the world.

C.

?Yes, since it is important to measure poverty between countries so that action can be taken.

D.

?No, since the Chinese poverty measure is not stated in 2005 PPP U.S. dollars.

3. Let the graph on the right represent the aggregate production function.

Using the? 3-point curved line drawing

tool?,

on the graph to the? right, draw an aggregate production function that displays diminishing marginal returns to capital. Assume the total efficiency of labor remains constant.

Carefully follow the instructions above and only draw the required object.

Using the? 3-point curved line drawing

tool?,

on the graph to the? right, draw an aggregate production function that displays constant returns to capital. Assume the total efficiency of labor remains constant.

Carefully follow the instructions above and only draw the required object.

4.Suppose you reside in the country of Camelot. In? 2001, the total population is 120000?, the number of workers is 84000and real GDP is $5760000000,Now assume in? 2002, the total population is 132000the number of workers is 88200and real GDP is $6220800000

In? 2002, real income per capita is

?$nothing.

?(Round

your response to the nearest

dollar?.)

In? 2002, real income per worker is

?$nothing.

?(Round

your response to the nearest

dollar?.)

The change in worker productivity from 2001 is

nothing

percent.

?(Round

your response to two decimal

places?.)

5.The average American is so much richer than the average Indian due to differences in? ___________.

?(Check

all that

apply?.)

A.

human capital.

B.

the capital stock.

C.

religion and culture.

D.

technology.

E.

geography.

6.GDP at purchasing power parity? (PPP) takes into account variations in ______?.

PPP attempts to work out how much currency will be needed to buy ________?

quantity of goods and services in different countries.

GDP per capita in PPP is the most useful for comparing _____?

7. Assume that the aggregate production function is Y? = F?(K?, H?).

Let K? =20,H? =30?, and the function be Y equals 3times the product of K and H. Y? = nothing.

?(Round your response to the nearest integer?.)

?8.Moore's Law states that? ____________.

A.

the number of chips in a computer will approximately double every two years.

B.

the rate of technology will tend to increase approximately every three years.

C.

technology will continually double every two years.

D.

the number of transistors on a chip will double approximately every two years.

If? Moore's Law is? correct, then which variable in the production function will most directly be? impacted?

A.

X.

B.

A.

C.

K.

D.

H.

9.The following table lists 2012 GDP per capita for four countries. The data are given in the national currencies of the countries. It also lists the price of a Big Mac in local currency in each country in 2012. The price of a Big Mac in the United States in 2012 was

?$4.304.30.

Using the Big Mac as a representative commodity common to the? countries, calculate the purchasing power parity? (PPP)-adjustment factor for each? country, and then the PPP level of GDP per capita in each country. (Round responses for the? PPP-adjustment factor to three decimal places and round PPP GDP per capita to the nearest integer?.)

2012 GDP

per Capita

2012 Big Mac

Price

Purchasing Power Parity? (PPP)- Adjustment Factor

PPP Level of

GDP per Capita

??Norway? (krone)

?579,162

???41krone

nothing

nothing

??Poland? (zloty)

? 41,398

???9.1zloty

nothing

nothing

??Turkey? (Turkish lira)

? 19,580

6.6 Turkish lira

nothing

nothing

??United Kingdom? (British pound)

? 24,740

???2.49pounds

nothing

nothing

10. First? Japan, then? Korea, and now China have managed to grow very rapidly without devoting many resources to research and development? (R&D). Given the importance noted in the text of technological advance as an engine of? growth, this seems to be a contradiction.??

How could rapid growth in these countries? (and others as? well) have been achieved without a substantial? R&D commitment on their? part?

A.

Growth in these countries most likely happened by chance and is not likely to be repeated by other countries.

B.

Technology developed in other more advanced countries can be adopted and adapted by poor countries to serve local industry in local circumstances.??

C.

Countries such as these have a larger stock of physical capital than other? countries, which guarantees them a more rapid rate of economic growth.

D.

Rapid growth cannot be achieved without substantial investment in? R&D.

11.Draw a graph showing the aggregate production? function, assuming diminishing marginal returns to physical capital.

Using the

? 3-point curve line drawing tool?, draw a curve showing the aggregate production? function, assuming diminishing marginal returns to capital.

Carefully follow the instructions above and only draw the required object.

12.What are the disadvantages of using Big Macs to measure purchasing power? parity?

?(Check all that apply.?)

A. Big Macs are? popular, so they distort the true? cost-of-living differences across countries.

B. Big Macs represent only a very small fraction of? people's consumption.

C. Rather than accounting for? cost-of-living differences, the Big Mac index reflects income inequality.

D. The Big Mac index simply compares a bundle consisting of only one good.

13. Is real income per capita more relevant in understanding differences in international living standards than real income per? worker?

A.

?Yes, as it conveys the conditions of the whole population including children and the elderly.

B.

?No, since it does not account for the welfare of the nonworking population.

C.

?No, since it obscures the magnitude of? labor's productivity within a country.

D.

?Yes, as it is considered to be the? "gold standard" of living standard measurements by the World Bank.

14.The Human Development Index measures? ____________.

A.the amount of ethnic welfare and disease in? third-world countries.

B.how fairly income is distributed across countries.

C.the relative lifespan and education in? third-world countries.

D.living standards across various countries.

The correlation between this index and real income per capita in a country is? ____________.

A.a positive association is apparent but only for? high-income economies.

B.the correlation between this index and real income per capita is weakly negative.

C.no discernable association exists between this index and income per capita.

D. countries with higher real income per capita tend to have higher levels of this index.

15.The following table shows the change in GDP in Lithasia with changes in efficiency units of labor.

GDP

?(in Million

?Dollars)

Stock of

Physical

Capital? (Units)

Efficiency

Units of Labor

200

17000

16000

300

17000

19000

360

17000

22000

400

17000

25000

420

17000

28000

According to the? table, as this economy uses more efficiency units of? labor, the rate of change in GDP

?

.

Which of the following figures describes how the aggregate production function of this economy would look if output is measured along the vertical axis and efficiency units of labor on the horizontal? axis?

A.

Figure A.

B.

Figure C.

C.

Figure B.

D.

Figure D.

A

Efficiency units of laborOutput

The image is a graph that shows the aggregate production function for an economy and is labeled A. The horizontal axis measures efficiency units of labor and the vertical axis measures output. In the graph, there is an upward-sloping concave curve that starts from the origin.

B

Efficiency units of laborOutput

The image is a graph that shows the aggregate production function for an economy and is labeled B. The horizontal axis measures efficiency units of labor and the vertical axis measures output. In the graph, there is an upward-sloping convex curve that starts from the origin.

C

Efficiency units of laborOutput

The image is a graph that shows the aggregate production function for an economy and is labeled C. The horizontal axis measures efficiency units of labor and the vertical axis measures output. In the graph, there is a curve shaped like the inverted alphabet "S." The curve begins at the origin, slopes upward, then slopes downward, and then slopes upward again.

D

Efficiency units of laborOutput

The image is a graph that shows the aggregate production function for an economy and is labeled D. The horizontal axis measures efficiency units of labor and the vertical axis measures output. In the graph, there is a downward-sloping curve, convex to the origin, that starts from a point on the vertical axis.

What explains the shape of this aggregate production? function?

A.

Law of Diminishing Marginal Benefit.

B.

Law of Unequal Proportions.

C.

Law of Large Numbers.

D.

Law of Diminishing Marginal Product.

16.How do increases in technology affect the aggregate production? function?

A.

With increases in? technology, the aggregate production function shifts? up, indicating more output is produced from the same amount of inputs.

B.

With better? technology, the aggregate production function shifts down because fewer workers are needed.

C.

As technology? increases, diminishing marginal product sets in such that each unit of technology produces less output.

D.

Even with technology? increases, the aggregate production function will remain constant unless the technology increases are matched by increases in the physical capital stock.

17. In a particular? study, economists at the World Bank ranked some countries on the basis of GNP per capita as well as HDI. They also computed the difference between the ranks to have a comprehensive idea about the performance of these economies. Their observations on Switzerland and China for the year 1999 are given in part

a?,

and for Sweden in the years 1999 and 2012 in part

b.

a.Does the information in the table below? suggest, in any? way, that people in China were better off than the people in Switzerland in? 1999? Explain your answer.

Countries

GNP Per Capita? (PPP$)

Rank Minus Human Development

Index Rank

Switzerland

?7

China

29

A. Yes, the HDI is a superior barometer of quality of? life, and? China's relatively favorable ranking in the HDI suggests that its people are better off than those in Switzerland.

B. No, the large difference for China in the two rankings suggests that it is still a developing? country, while the small difference for Switzerland confirms its status as a? high-income country.

C. No, it only implies that? China's HDI rank was much higher than its per capita income? rank, while? Switzerland's HDI rank was lower than its per capita income rank.

D. Yes, it suggests that China offers its residents much more than simply a high? income, which appears to be the case with Switzerland.

b.What does the information in the table below suggest about the relationship between income per capita and HDI in a? country?

Per Capita Income Rank

HDI Rank

1999

28

6

2012

14

7

A. It suggests that HDI in a prosperous country may be largely unrelated to income per capita.

B. It says absolutely nothing about the relationship.

C. It clearly establishes the fact that higher incomes do not make people better off.

D. It implies that income per capita is a negative influence upon the standard of living.??

18 The total efficiency units of labor are? ____________.

A. the average of the total number of workers and the amount of output each worker produces.

B. how much more efficient a? first-world worker is than a? third-world worker.

C. how much cheaper a? third-world worker is than a? first-world worker.

D. the product of the total number of workers and the average human capital of each worker.

The relationship between this concept and human capital is described? as: An increase in the average? worker's level of human capital? will, all else? equal, ____________ the total efficiency units of labor in an economy.

A. decrease.

B. not alter.

C. increase.

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