Primavera Economics Unit 5 Exam 2023 Graded A

Primavera Economics Unit 5 Exam 2023 Graded A Which is a characteristic of the takeoff stage of Rostow's Five Stages of Economic Growth? WRONG - Advancements in technology require a skilled labor force competent in electronics, medicine, and engineering. What is the primary tool used to measure inflation? Consumer price index. What impact can government policies have on the business cycle? Policies that raise interest rates may cause an economic contraction. How do gross national product (GNP) and gross domestic product (GDP) differ? While GNP includes production by all people and businesses of a country, GDP only includes production within a country's borders. Which describes a way that gross domestic product (GDP) is used to measure the economy? If GDP decreases for six months straight, a country is in a recession. How can a developing nation improve its economy if it lacks natural resources? It can engage in international trade. How does the law of comparable advantage lead to international trade? Countries make products they can produce efficiently and are able to get the rest of what they need through trade. What are functions of the Federal Reserve? (Select all that apply.) It enters US currency into circulation, It offers financial services within the government. Which accurately describes a cause for inflation? WRONG - The Federal Reserve raises interest rates and slows economic activity. Why does nominal gross domestic product (GDP) sometimes seem larger than real GDP? Read GDP includes inflation in its calculation, whereas nominal GDP does not. Why would wealthy nations have an interest in the development of poor nations? (Select all that apply.) It opens up new markets for goods and services, They feel an ethical or moral obligation to do so. What is true regarding seasonal unemployment? It is not as troubling to the government as other types of unemployment. How does the Federal Reserve stabilize and safeguard the nation's economy? (Select all that apply.) It implements American monetary policy, It distributes currency and oversees fiscal conditions, It regulates banks and defends consumer credit rights. When might a country produce even though it cannot do so efficiently? (Select all that apply.) To ensure national security, To increase the balance of trade. How does the Federal Reserve Bank fit into the balance of power among the three branches of the federal government established by the constitution? The Chair of the Federal Reserve is appointed by the president and approved by the Senate. How can the World Bank help developing nations economically? It can provide loans to developing countries to build new infrastructures. What are consequences of rapid inflation? (Select all that apply.) People postpone purchasing expensive items, such as homes, until prices drop, Individual purchasing power decreases, which results in a decrease in demand, Savings accounts become less desirable because interest earned is lower than inflation. How might developing countries obtain funding? (Select all that apply.) They can obtain financial assistance from World Bank, They can acquire grants from foreign countries, They can gain loans from private investors. How does a rise in life expectancy impact population growth? It increases population growth. Why is federal oversight crucial to the operation of the Federal Reserve Bank? The Federal Reserve is the nation's central banking system. Which is an example of regional cooperation to promote economic growth? WRONG - Neighboring countries set up quotas on resources that can be sold. How are exchange rates determined in a flexible exchange rate system? Supply and demand. Read the scenario. A United States company produces widgets in Brazil. Which is true about the calculation of widget production? The dollar value of the widgets would be included in a GNP calculation. Read the statement. Country A is running a trade deficit. What must Country A do to reverse this trend? It must increase trade exports with other countries. Read the passage. This is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy. It provides information about price changes in the nation's economy to government, business, labor, and private citizens, and it is used by them to help guide economic decisions. What is being described? Consumer price index. What is the Government Accountability Office (GAO)? An independent agency that answers to Congress and audits the Federal Reserve. What are consequences of a weak dollar? (Select all that apply.) Unemployment in import industries, Increase in the cost of imports. Who appoints the Board of Governors of the Federal Reserve System? The US President. What reasons do protectionists cite most for restricting trade? (Select all that apply.) To protect US infant industries that tend to have high production costs, To protect national security and prohibit US reliance on other countries, To protect US jobs due to cheap labor in other countries. Read the sentence. The cost of lumber has increased 145 percent since last quarter. What is the most likely outcome in the furniture market? WRONG - The market will see demand-pull inflation because consumers need more of the product.