Clemson Macroeconomics 2120 Final Exam
Complete Study Guide with Questions and
Verified Answers | Latest Edition
1. When people choose to recycle and buy appliances that conserve on energy,
they are acting in ______ & _______. - ANSWER the social interest, their
self-interest
2. 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
3. The opportunity cost of receiving a free ticked to the NCAA championship
game with a face-value of $450 and attending the game is: - ANSWER
there resale value of the lost market value of selling the ticket and the time to
go
4. In the course, we use _____ as a proxy for a country's standard of living. -
ANSWER real GDP per capita
5. Consider an industrialized country where the growth rate of real GDP is -1%
per year. However, the growth rate of real GDP per capita is positive. What
is the most likely reason this is occurring? - ANSWER the country's
population is growing slower than the growth of nominal GDP
6. what are the components of the National Spending Approach to calculating
GDP? - ANSWER consumption goods and services, investment goods,
government purchases, & net exports
,7. Why do economists think that GDP may overestimate the actual level of
economic activity in an economy? - ANSWER there is no negative
adjustment for pollution.
8. Identify the "bad" that t 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
9. 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
10.Increases in the level of corruption in a country tend to... - ANSWER
decreased per capita GDP
11.The correlation between infant mortality and real GDP per capita is .... -
ANSWER negative
12.Countries with higher levels of real per capita GDP tend to have
better educational opportunities
ii. higher infant death rates
iii. higher life expectancy rates - ANSWER i & iii
13.Factors of production that contribute to growth in per capita GDP include: -
ANSWER physical capital, skilled labor, and technical know-how
,14.Someone who consumes a resource without working or contributing to the
resource's upkeep is call a(n): - ANSWER free rider
15.What is a result of a high level of government corruption? - ANSWER there
are few entrepreneurs
16.If a nation doubles its GDP per capita in 28 years, what is the annual growth
rate? - ANSWER 2.5%
17.Institutions and incentives are _______ causes and factors of productions are
______ causes of wealth nations. - ANSWER ultimate; proximate
18.Enforced property rights are important to increase which of the following? -
ANSWER physical capital, human capital, and technological knowledge
19.What are the institutions that help foster the appropriate incentives for
economic growth? - ANSWER a dependable legal system, property rights,
& competitive & open markets
20.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
21.what data is used to calculate GDP? - ANSWER both quantities and prices
of goods
22.If a country's GDP per capita rises, this means that...
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
23.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
24.The most volatile component of GDP is.... - ANSWER investment
25.Private spending on tools, plant, and equipment that are used to produce
future output is called... - ANSWER investment
26.the factor income approach to calculating GDP can be summarized as the
summation of .... - ANSWER wages, interest, rent, & profit
27.Sydney buys a used car form Lemon Drop Used Cars in 2015 for $3,000.
Francis, a salesperson at Lemon Drop, receives $200 in commission for
selling the car to Sydney. How much does this transaction contribute to 2015
GDP? - ANSWER $200
28.Last month Trevor purchased $177 of Swedish Fish from an online retailer
in Sweden. How does this transaction contribute to GDP in 2016? -
ANSWER Consumption increases by $177 and net exports fall $177
29.Birmingham Steel sells to Winston Golf Club Manufacturers for $300,000.
Winston sells its golf clubs to Academy Sports for $1,000,000. Academy
Sports sells Winston golf clubs for $1,500,000. How much is added to GDP?
- ANSWER $1,500,000
Complete Study Guide with Questions and
Verified Answers | Latest Edition
1. When people choose to recycle and buy appliances that conserve on energy,
they are acting in ______ & _______. - ANSWER the social interest, their
self-interest
2. 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
3. The opportunity cost of receiving a free ticked to the NCAA championship
game with a face-value of $450 and attending the game is: - ANSWER
there resale value of the lost market value of selling the ticket and the time to
go
4. In the course, we use _____ as a proxy for a country's standard of living. -
ANSWER real GDP per capita
5. Consider an industrialized country where the growth rate of real GDP is -1%
per year. However, the growth rate of real GDP per capita is positive. What
is the most likely reason this is occurring? - ANSWER the country's
population is growing slower than the growth of nominal GDP
6. what are the components of the National Spending Approach to calculating
GDP? - ANSWER consumption goods and services, investment goods,
government purchases, & net exports
,7. Why do economists think that GDP may overestimate the actual level of
economic activity in an economy? - ANSWER there is no negative
adjustment for pollution.
8. Identify the "bad" that t 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
9. 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
10.Increases in the level of corruption in a country tend to... - ANSWER
decreased per capita GDP
11.The correlation between infant mortality and real GDP per capita is .... -
ANSWER negative
12.Countries with higher levels of real per capita GDP tend to have
better educational opportunities
ii. higher infant death rates
iii. higher life expectancy rates - ANSWER i & iii
13.Factors of production that contribute to growth in per capita GDP include: -
ANSWER physical capital, skilled labor, and technical know-how
,14.Someone who consumes a resource without working or contributing to the
resource's upkeep is call a(n): - ANSWER free rider
15.What is a result of a high level of government corruption? - ANSWER there
are few entrepreneurs
16.If a nation doubles its GDP per capita in 28 years, what is the annual growth
rate? - ANSWER 2.5%
17.Institutions and incentives are _______ causes and factors of productions are
______ causes of wealth nations. - ANSWER ultimate; proximate
18.Enforced property rights are important to increase which of the following? -
ANSWER physical capital, human capital, and technological knowledge
19.What are the institutions that help foster the appropriate incentives for
economic growth? - ANSWER a dependable legal system, property rights,
& competitive & open markets
20.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
21.what data is used to calculate GDP? - ANSWER both quantities and prices
of goods
22.If a country's GDP per capita rises, this means that...
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
23.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
24.The most volatile component of GDP is.... - ANSWER investment
25.Private spending on tools, plant, and equipment that are used to produce
future output is called... - ANSWER investment
26.the factor income approach to calculating GDP can be summarized as the
summation of .... - ANSWER wages, interest, rent, & profit
27.Sydney buys a used car form Lemon Drop Used Cars in 2015 for $3,000.
Francis, a salesperson at Lemon Drop, receives $200 in commission for
selling the car to Sydney. How much does this transaction contribute to 2015
GDP? - ANSWER $200
28.Last month Trevor purchased $177 of Swedish Fish from an online retailer
in Sweden. How does this transaction contribute to GDP in 2016? -
ANSWER Consumption increases by $177 and net exports fall $177
29.Birmingham Steel sells to Winston Golf Club Manufacturers for $300,000.
Winston sells its golf clubs to Academy Sports for $1,000,000. Academy
Sports sells Winston golf clubs for $1,500,000. How much is added to GDP?
- ANSWER $1,500,000
