BA207 Cumulative Final Exam

BA207 Cumulative Final Exam. The two topics of primary concern in macroeconomics are: Correct! short-run fluctuations in output and employment, and long-run economic growth. unemployment, and wage rates in labor markets. monopoly power of corporations, and small business profitability. oil prices and housing markets. Question 2 5 / 5 pts If the prices of all goods and services rose, but the quantity produced remained unchanged, what would happen to nominal and real GDP? nominal and real GDP would both rise. nominal and real GDP would both be unchanged. real GDP would rise, but nominal GDP would be unchanged. Correct! nominal GDP would rise, but real GDP would be unchanged. Question 3 5 / 5 pts Why are high rates of unemployment of concern to economists? Higher rates of unemployment generally lead to higher inflation rates. Environmental destruction is more prevalent when unemployment rates are high. Correct! There is lost output that could have been produced if the unemployed had been working. All of the above are reasons why economists are concerned about high unemployment rates. Question 4 5 / 5 pts National income accountants can avoid multiple counting by: including transfer payments in their calculations. Correct! only counting final goods. counting both intermediate and final goods. only counting intermediate goods. Question 5 5 / 5 pts If intermediate goods and services were included in GDP: Correct! the GDP would be overstated. the GDP would then have to be deflated for changes in the price level. nominal GDP would exceed real GDP. the GDP would be understated. Question 6 0 / 5 pts If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that: You Answered nominal GDP is rising but real GDP is declining. Correct Answer net investment is negative. the economy is importing more than it exports. the economy's production capacity is expanding. Question 7 0 / 5 pts For a nation's real GDP per capita to rise during a year: You Answered consumption spending must increase. Correct Answer real GDP must increase more rapidly than population. population must increase more rapidly than real GDP. investment spending must increase. Question 8 5 / 5 pts Given the annual rate of economic growth, the "rule of 70" allows one to: determine the accompanying rate of inflation. calculate the size of the GDP gap. Correct! calculate the number of years required for real GDP to double. determine the growth rate of per capita GDP. Question 9 5 / 5 pts Strong property rights are important for modern economic growth because: they allow governments to extract the gains from private citizens' investments. Correct! people are more likely to invest if they don't fear that others can take their returns on investment without compensation.