ECON 252 Homework 4 Review Questions with Correct Answers
(Grade A+)
Question 1: GDP at purchasing power parity (PPP) takes into account variations in ______________.
Answer: living costs
Question 2: PPP attempts to work out how much currency will be needed to buy ____________
quantity of goods and services in different countries
Answer: the same
Question 3: GDP per capita in PPP is the most useful for comparing ________________.
Answer: living standards
Question 4: You should use _________________________ to compare living standards in different
countries.
Answer: real income per capita
Question 5: What does Regional Price Parities measure?
A. Price fluctuations across countries
B. Inflation
C. Price fluctuations across time
D. Price fluctuations across states and metropolitan areas
Answer: D. Price fluctuations across states and metropolitan areas
Question 6: Suppose that between Year 1 and Year 2, the unemployment rate in the economy increases.
The total efficiency units of labor will ________________.
Answer: decrease
Question 7: If the unemployment rate rises between Year 1 and Year 2, what are the consequences of
this decrease in real GDP and real GDP per capita?
A. Real GDP per capita will increase
B. Real GDP per worker will decrease
C. Both of these items will increase
D. Both of these items will decrease
Answer: D. Both of these items will decrease
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(Grade A+)
Question 1: GDP at purchasing power parity (PPP) takes into account variations in ______________.
Answer: living costs
Question 2: PPP attempts to work out how much currency will be needed to buy ____________
quantity of goods and services in different countries
Answer: the same
Question 3: GDP per capita in PPP is the most useful for comparing ________________.
Answer: living standards
Question 4: You should use _________________________ to compare living standards in different
countries.
Answer: real income per capita
Question 5: What does Regional Price Parities measure?
A. Price fluctuations across countries
B. Inflation
C. Price fluctuations across time
D. Price fluctuations across states and metropolitan areas
Answer: D. Price fluctuations across states and metropolitan areas
Question 6: Suppose that between Year 1 and Year 2, the unemployment rate in the economy increases.
The total efficiency units of labor will ________________.
Answer: decrease
Question 7: If the unemployment rate rises between Year 1 and Year 2, what are the consequences of
this decrease in real GDP and real GDP per capita?
A. Real GDP per capita will increase
B. Real GDP per worker will decrease
C. Both of these items will increase
D. Both of these items will decrease
Answer: D. Both of these items will decrease
Page 1
