Economics: GDP and Government Impact

<p>Nominal GDP adjusted for inflation, divided by the population (A)</p> Signup and view all the answers

<p>Real GDP per capita correlates strongly with various other measures of standard of living. (C)</p> Signup and view all the answers

<p>Government budget surplus or deficit (C)</p> Signup and view all the answers

<p>Net exports (A)</p> Signup and view all the answers

<p>Wages and interest (D)</p> Signup and view all the answers

<p>Total output is equal to consumption, investment, government expenditure, and net exports (A)</p> Signup and view all the answers

<p>Government income exceeds spending (A)</p> Signup and view all the answers

<p>Foreign businesses need Canadian dollars to buy Canadian goods (D)</p> Signup and view all the answers

<p>Current account balance (D)</p> Signup and view all the answers

<p>Labor (B)</p> Signup and view all the answers

<p>The Value Added Approach sums the value added at each stage of production, while the Expenditure Approach focuses on the total spending on final goods and services. (D)</p> Signup and view all the answers

<p>GDP per capita adjusts for inflation, providing a more accurate reflection of changes in real purchasing power over time. (C)</p> Signup and view all the answers

<p>The shadow economy represents illegal activities that are not included in official GDP calculations, resulting in an underestimation of economic activity. (D)</p> Signup and view all the answers

<p>All of the above. (E)</p> Signup and view all the answers

<p>The equation represents the breakdown of GDP into its major components of spending. (D)</p> Signup and view all the answers

<p>National Income (Y) (D)</p> Signup and view all the answers

<p>Tax revenue exceeds government spending. (D)</p> Signup and view all the answers

<p>CA and NX are always equal. (D)</p> Signup and view all the answers

<p>Wage income (WL) and capital income (rK) (D)</p> Signup and view all the answers

<p>The expenditure approach to calculating GDP. (A)</p> Signup and view all the answers

<p>Current account balance. (B)</p> Signup and view all the answers

<p>The value of intermediate goods used in production. (A)</p> Signup and view all the answers

<p>rK is a primary source of household income, representing returns on assets. (D)</p> Signup and view all the answers

<p>Sum of all factor payments (B)</p> Signup and view all the answers

<p>It is the nominal GDP adjusted for inflation and divided by population. (D)</p> Signup and view all the answers

<p>It does not reflect income distribution. (B)</p> Signup and view all the answers

<p>By summing consumption, investment, government spending, and net exports. (C)</p> Signup and view all the answers

<p>Real GDP adjusts for changes in price levels over time. (C)</p> Signup and view all the answers

<p>The government has a budget surplus. (B)</p> Signup and view all the answers

<p>Net Exports (B)</p> Signup and view all the answers

<p>$Y = C + I + G + NX$ (A)</p> Signup and view all the answers

<p>$NX = EX - IM$ (A)</p> Signup and view all the answers

<p>Current Account (A)</p> Signup and view all the answers

<p>$Y = WL + rK + ilde{d}K$ (A)</p> Signup and view all the answers

<p>Net Exports (D)</p> Signup and view all the answers

<p>Increased government expenditures (B)</p> Signup and view all the answers

<p>It omits various lifestyle factors such as leisure and social well-being. (E)</p> Signup and view all the answers

<p>A surplus exists when T is greater than G. (C)</p> Signup and view all the answers

<p>Norway (A)</p> Signup and view all the answers

<p>Philippines (C)</p> Signup and view all the answers

<p>Faster growth rates in poorer countries can potentially bridge the gap in GDP per capita with richer countries. (A)</p> Signup and view all the answers

<p>Higher GDP per capita always guarantees better living standards for individuals. (B)</p> Signup and view all the answers

<p>There can be significant disparities in economic growth rates between countries, regardless of their initial GDP per capita levels. (A)</p> Signup and view all the answers

<p>Decrease in human capital per worker (h) (B)</p> Signup and view all the answers

<p>The standard of living remains constant, despite population growth. (B)</p> Signup and view all the answers

<p>The efficiency with which labor and capital are combined in production. (A)</p> Signup and view all the answers

<p>Constant returns to scale (B)</p> Signup and view all the answers

<p>Divergent levels of technology and innovation. (C)</p> Signup and view all the answers

<p>By enhancing the quality of labor and productivity. (D)</p> Signup and view all the answers

<p>The Industrial Revolution (B)</p> Signup and view all the answers

<p>It shows how inputs like labor and capital are combined to produce outputs. (A)</p> Signup and view all the answers

<p>Population growth was unable to keep pace with productivity. (C)</p> Signup and view all the answers

<p>Pre-industrial revolution population growth patterns. (B)</p> Signup and view all the answers

<p>The capital stock increases. (C)</p> Signup and view all the answers

<p>$ ext{change in capital} = ext{investment} - ext{depreciation}$ (C)</p> Signup and view all the answers

<p>Increased capital will eventually yield lower additional output per unit of capital. (B)</p> Signup and view all the answers

<p>It represents a point where capital accumulation ceases to increase the output per capita. (A)</p> Signup and view all the answers

<p>They can benefit from improvements in capital utilization. (D)</p> Signup and view all the answers

<p>Population growth rates have begun to decline. (B)</p> Signup and view all the answers

<p>It leads to more production with the same amount of inputs. (C)</p> Signup and view all the answers

<p>The most productive firms expand while the least productive fail. (C)</p> Signup and view all the answers

<p>It has decreasing returns. (D)</p> Signup and view all the answers

<p>It encourages capital accumulation. (D)</p> Signup and view all the answers

<p>They can slow down economic growth as resources become scarcer. (B)</p> Signup and view all the answers

<p>It creates a negative production externality. (C)</p> Signup and view all the answers

<p>It is linked to investment in research with positive externalities. (A)</p> Signup and view all the answers

<p>It enables quicker access to updated technological advancements through imitation. (B)</p> Signup and view all the answers

<p>Norway (C)</p> Signup and view all the answers

<p>South Africa (B)</p> Signup and view all the answers

<p>The differences in growth rates can lead to further increase in the disparity between rich and poor countries. (A)</p> Signup and view all the answers

<p>It leads to increased production with a fixed amount of resources. (A)</p> Signup and view all the answers

<p>By allowing inefficient firms to exit the market and promoting innovation by new firms. (C)</p> Signup and view all the answers

<p>Ideas are readily protected by intellectual property rights. (A)</p> Signup and view all the answers

<p>By allowing developing countries to access and adopt newer technologies through international trade and investment. (D)</p> Signup and view all the answers

<p>Subsidizing education and research to encourage investment. (C)</p> Signup and view all the answers

<p>As a resource becomes scarcer, its price increases, and producers shift towards using less of it. (A)</p> Signup and view all the answers

<p>It reduces the availability of natural resources, thereby limiting economic growth. (A)</p> Signup and view all the answers

<p>The negative impact on the environment is not factored into the production decision. (A)</p> Signup and view all the answers

<p>The text mainly explores the factors that contribute to economic growth, and the reasons why some countries catch up while others don't. (A)</p> Signup and view all the answers

<p>Asian Tigers prioritize investment in infrastructure and human capital. (D)</p> Signup and view all the answers

<p>The countries that hold the highest levels of technology at a given point in time. (A)</p> Signup and view all the answers

<p>Increasing labor supply (D)</p> Signup and view all the answers

<p>It creates a cycle where income growth is offset by population growth, resulting in stagnant living standards. (C)</p> Signup and view all the answers

<p>The production function assumes that there is a constant relationship between inputs and outputs. (B)</p> Signup and view all the answers

<p>The amount of output produced by each individual worker. (A)</p> Signup and view all the answers

<p>The efficiency with which labor and capital are combined to produce output. (B)</p> Signup and view all the answers

<p>Depreciation is a constant proportion of capital stock. (D)</p> Signup and view all the answers

<p>Investment exceeding depreciation. (A)</p> Signup and view all the answers

<p>The point where capital stock per person stops increasing. (D)</p> Signup and view all the answers

<p>If investment equals depreciation, the capital stock remains constant. (C)</p> Signup and view all the answers

<p>Because of diminishing returns to capital. (A), Because investment eventually equals depreciation. (B)</p> Signup and view all the answers

<p>Capital accumulation leads to a temporary increase in output per capita, which then stagnates. (B)</p> Signup and view all the answers

<p>The share of output saved is constant. (D)</p> Signup and view all the answers

<p>Convergence means that countries with lower initial capital stocks will eventually reach a similar level of output per capita as countries with higher initial capital stocks. (A)</p> Signup and view all the answers

<p>Has been out of work for longer than 6 months (A)</p> Signup and view all the answers

<p>More women entering the workforce (C)</p> Signup and view all the answers

<p>It is a measure of the total number of people who are unemployed (D)</p> Signup and view all the answers

<p>E / N (B)</p> Signup and view all the answers

<p>They lead to an underestimation of the unemployment rate (A)</p> Signup and view all the answers

<p>A mismatch between the skills of workers and the requirements of available jobs. (B)</p> Signup and view all the answers

<p>Seasonal variations in demand for labor. (D)</p> Signup and view all the answers

<p>Frictional unemployment is short-term, while structural unemployment is long-term. (B)</p> Signup and view all the answers

<p>The tendency for the natural rate of unemployment to increase over time. (D)</p> Signup and view all the answers

<p>Improved job skills for unemployed workers. (D)</p> Signup and view all the answers

<p>It creates a surplus of labor, leading to some workers being unemployed. (D)</p> Signup and view all the answers

<p>Increasing employment protection laws. (D)</p> Signup and view all the answers

<p>It represents a level of unemployment that is inevitable due to frictional and structural factors and is therefore not desirable. (D)</p> Signup and view all the answers

Measures GDP as the sum of all final goods and services produced.

Calculates GDP by summing all expenditures on final goods and services.

Calculates GDP by summing all factor payments (wages, rents).

Average income of residents, adjusted for inflation, over time.

GDP doesn't fully measure the standard of living due to various exclusions.

The total value of all goods and services produced in a country over a specific time period.

A visual model representing how money and resources flow between households and firms in an economy.

The financial plan for a government's revenues and expenditures over a certain period.

A situation where government revenues exceed its expenditures.

A situation where government expenditures exceed its revenues.

The difference between a country's exports and imports.

The total income earned by households, calculated as labor income and capital income.

An equation showing the relationship between inputs (capital and labor) and the output (total production).

Nominal GDP adjusted for inflation, reflecting true economic output.

Difference between government tax revenues and expenditures: S = T - G.

Measures a country's transactions with the rest of the world; equals NX.

The sum of all final goods and services produced in an economy.

Calculation of GDP by adding consumption, investment, government spending, and net exports.

The exchange of goods and services between countries, influenced by exports and imports.

Varied GDP per capita across countries indicates economic disparities.

Growth rates vary widely; poorer countries can grow faster to catch up.

Countries like Norway and the US have the highest GDP per capita.

Countries like Somalia and Congo show much lower GDP per capita figures.

Poorer nations should eventually catch up to wealthier ones if they grow faster.

Factors that contribute to the increase in a nation's output and productivity.

An equation showing how inputs like labor and capital affect output.

The amount of physical capital available per worker in an economy.

The skills and education that workers bring to their jobs.

The efficiency with which labor and capital are used to produce output.

Theory stating population growth outpaces agricultural production, leading to stagnation.

Methods to boost output include increasing labor, capital, human capital, and technology.

The most advanced level of technology available to an economy.

Improvement leading to increased production with the same inputs.

Benefits from research that can be freely shared, aiding innovation.

Process where less productive firms fail and new firms emerge, boosting productivity.

Spread of technology, allowing quicker access for developing countries.

Education increases human capital but has diminishing returns over time.

Stable governments encourage investment and capital accumulation.

As resources become scarce, prices rise and growth slows.

Negative impact from fossil fuel production not accounted in costs.

Population growth model during pre-industrial periods, limited by resources.

Increase in capital stock per person through investment, affected by depreciation.

As more capital is added, each additional unit becomes less productive.

Equilibrium point where capital stock remains constant due to balanced investment and depreciation.

If investment exceeds depreciation, capital stock increases; if less, it decreases.

Prediction that poorer countries will catch up in output per capita with richer countries.

Economic theory that emphasizes capital accumulation and technological progress for growth.

The average income per person in a specific area, adjusted for purchasing power.

The speed at which a country's economy grows, typically measured as an annual percentage increase in GDP.

Significant differences in income levels between countries or regions.

The theory that poorer countries can grow faster than richer ones, eventually narrowing the income gap.

Countries with a GDP per capita below a certain threshold, indicating economic challenges.

Ways to boost output include increasing labor, capital, and technology.

Rapid productivity growth outstripped population growth during the Industrial Revolution.

Theory suggesting sustained growth comes from knowledge and research investment.

Legal rights that ensure economic exchanges and secure investments.

Individuals not employed, available, and actively seeking work.

The ratio of unemployed individuals to the labor force (u = U / (U + E)).

The share of working-age population currently employed (e = E / N).

The ratio of the labor force to the working-age population (p = L / N).

Women's entry into the workforce and baby-boomer retirements.

Unemployment caused by economic downturns, varies with demand.

Long-term unemployment from structural and frictional factors.

Temporary unemployment while transitioning between jobs.

Unemployment due to mismatches in labor market skills.

Long-term impact of high cyclical unemployment on natural rate.

High demand leads to increased production and less unemployment.

Low demand leads to decreased production and more unemployment.