Clemson Macroeconomics 2120 Final Exam
Questions and Answers 100% Solved
Question: Adam Smith's metaphor of the "invisible hand" can lead to benefits to society when...
Answer: institutions align the private interest with the social interest
Question: When people choose to recycle and buy appliances that conserve on energy, they are
acting in ______ & ______.
Answer: the social interest, their self-interest
Question: In an effort to clean air, many communities impose restrictions on the burning of
garbage. This policy causes more garbage to be buried underground, potentially increasing
groundwater contamination. What concept does this example represent?
Answer: Trade-Offs
Question: The opportunity cost of receiving a free ticket to the NCAA championship game with a
face-value of $450 and attending the game is:
Answer: the resale value of the lost market value of selling the ticket and the time to go
Question: What are the institutions that help foster the appropriate incentives for economic
growth?
Answer: a dependable legal system, property rights, & competitive & open markets
Question: Gross Domestic Product (GDP) is best defined as the _____ value of all _____ goods
and services that are produced _________.
Answer: market, final, within a country in 1 year
Question: What data is used to calculate GDP?
Answer: both quantities and prices of goods
Question: If a country's GDP per capita rises, this means that... (i. the country has fewer poorer
people; ii. some people in the country have more wealth; iii. the country's standard of living is
rising)
Answer: ii & iii
Question: It is often said that _____ is the "main driver" the economy because its share of GDP
is larger than any of the other expenditure components.
, Answer: consumption
Question: Identify the "bad" that is not counted in GDP. (a. a decrease in water quality; b. the
purchase of a smokestack scrubber required by environmental regulation; c. an increase in
influenza vaccines; d. a decrease in the average number of hours in the work week)
Answer: a. a decrease in water quality
Question: If real GDP per capita in the US is currently $50,000 and it grows 1% per year, how
many years will it take to reach $200,000?
Answer: approximately 140 years
Question: Increases in the level of corruption in a country tend to...
Answer: decreased per capita GDP
Question: The correlation between infant mortality and real GDP per capita is...
Answer: negative
Question: Countries with higher levels of real per capita GDP tend to have (i. better educational
opportunities; ii. higher infant death rates; iii. higher life expectancy rates)
Answer: i & iii
Question: Factors of production that contribute to growth in per capita GDP include:
Answer: physical capital, skilled labor, and technical know-how
Question: Someone who consumes a resource without working or contributing to the resource's
upkeep is called a(n):
Answer: free rider
Question: What is a result of a high level of government corruption?
Answer: there are few entrepreneurs
Question: If a nation doubles its GDP per capita in 28 years, what is the annual growth rate?
Answer: 2.5%
Question: Institutions and incentives are _______ causes and factors of productions are ______
causes of wealth nations.
Answer: ultimate; proximate
Question: Enforced property rights are important to increase which of the following?
Answer: physical capital, human capital, and technological knowledge
Question: What is meant by the steady-state level of capital?
Answer: there is no net investment or any growth
Questions and Answers 100% Solved
Question: Adam Smith's metaphor of the "invisible hand" can lead to benefits to society when...
Answer: institutions align the private interest with the social interest
Question: When people choose to recycle and buy appliances that conserve on energy, they are
acting in ______ & ______.
Answer: the social interest, their self-interest
Question: In an effort to clean air, many communities impose restrictions on the burning of
garbage. This policy causes more garbage to be buried underground, potentially increasing
groundwater contamination. What concept does this example represent?
Answer: Trade-Offs
Question: The opportunity cost of receiving a free ticket to the NCAA championship game with a
face-value of $450 and attending the game is:
Answer: the resale value of the lost market value of selling the ticket and the time to go
Question: What are the institutions that help foster the appropriate incentives for economic
growth?
Answer: a dependable legal system, property rights, & competitive & open markets
Question: Gross Domestic Product (GDP) is best defined as the _____ value of all _____ goods
and services that are produced _________.
Answer: market, final, within a country in 1 year
Question: What data is used to calculate GDP?
Answer: both quantities and prices of goods
Question: If a country's GDP per capita rises, this means that... (i. the country has fewer poorer
people; ii. some people in the country have more wealth; iii. the country's standard of living is
rising)
Answer: ii & iii
Question: It is often said that _____ is the "main driver" the economy because its share of GDP
is larger than any of the other expenditure components.
, Answer: consumption
Question: Identify the "bad" that is not counted in GDP. (a. a decrease in water quality; b. the
purchase of a smokestack scrubber required by environmental regulation; c. an increase in
influenza vaccines; d. a decrease in the average number of hours in the work week)
Answer: a. a decrease in water quality
Question: If real GDP per capita in the US is currently $50,000 and it grows 1% per year, how
many years will it take to reach $200,000?
Answer: approximately 140 years
Question: Increases in the level of corruption in a country tend to...
Answer: decreased per capita GDP
Question: The correlation between infant mortality and real GDP per capita is...
Answer: negative
Question: Countries with higher levels of real per capita GDP tend to have (i. better educational
opportunities; ii. higher infant death rates; iii. higher life expectancy rates)
Answer: i & iii
Question: Factors of production that contribute to growth in per capita GDP include:
Answer: physical capital, skilled labor, and technical know-how
Question: Someone who consumes a resource without working or contributing to the resource's
upkeep is called a(n):
Answer: free rider
Question: What is a result of a high level of government corruption?
Answer: there are few entrepreneurs
Question: If a nation doubles its GDP per capita in 28 years, what is the annual growth rate?
Answer: 2.5%
Question: Institutions and incentives are _______ causes and factors of productions are ______
causes of wealth nations.
Answer: ultimate; proximate
Question: Enforced property rights are important to increase which of the following?
Answer: physical capital, human capital, and technological knowledge
Question: What is meant by the steady-state level of capital?
Answer: there is no net investment or any growth
