5. Which of the following statements are true with respect to setting up the poverty line?
a. The World Bank sets two poverty lines for low-income countries around the world. One poverty line is set at an income of $1.25/day per person.
The other is at $2/day.
b. By comparison, the U.S. 2015 poverty line of $20,090 annually for a family of three works out to $18.35 per person per day.
c. Both of these are true
d. None of these are true.
5. Which of the following statements are true with respect to setting up the poverty line?
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Q1. Import quotas are a. methods for reducing imports by limiting the quantity of goods that can enter the country each year b. voluntary agreements by exporting countries to limit sales in a foreign country c. subsidies to foreign producers to encourage them to trade d. none of these Q2. Devices that set up multiple exchange rates between the currencies of two nations are known as a. tariff quotas b. export subsidies c. exchange controls d. variable currencies Q3. The international organization that replaced the General Agreement on Tariffs and Trade (GATT) is the a. World Bank b. Export-Import Bank c. World Trade Organization d. International Monetary Fund Q4. Dumping refers to the practice of a. flooding a foreign market with large quantities of a good b. selling a product abroad at a price below cost or below the domestic price c. exporting inexpensive products to foreign countries d. selling surplus goods abroad with counterfeit brand names Q5. Countries engage in trade because a. the exchange is mutually beneficial b. governments force industries to exchange c. international law dictates that exchange must take place d. all of these Q6. According to the U. S. Department of Commerce, all persons, unrelated or related, who occupy a housing unit comprise a. a family unit b. a household c. an extended family unit d. group living Q7. A country with an equal distribution of income will have a higher standard of living than a country with a more unequal distribution of income. a. true b. false Q8. Welfare caseloads tend to fluctuate with a. business cycles b. weather c. stock markets d. minimum wage rates Q9. The official poverty threshold line is adjusted annually for a. income taxes b. inflation c. average household size d. average family size Q10. For many welfare recipients, taking a job reduces income. a. true b. false Q11. It is true that a stable economy occurs when a. total injections into the circular flow are large enough to make up for government tax leakages b. total leakages from the circular flow are great enough to offset the effects of government spending c. total planned leakages from the circular flow are exactly equal to total planned injections into the circular flow d. actual saving is equal to planned investment Q12. The measure of income received by persons from all sources is known as a. personal income b. national income c. gross domestic product d. net national product Q13. Discharges of chemicals from a paper plant that pollute a nearby river represent an example of a. internal costs b. the underground economy c. social costs d. transfer costs |
Question 3
According to Joseph Schumpeter, the theory of creative destruction describes a process by which
A | some new products unleash a gale of destruction that drive other new products out of the market. | |
B | new products unleash a gale of destruction that drives old products out of the market. | |
C | new products are created by the destruction of capital. | |
D | the creation of new products never involves the destruction of old products. |
Question 4
Which of the following countries had the highest GDP per capita in 2012?
A Qatar | ||
B | United States | |
C | Japan | |
D | Norway |
Question 5
________ save a ________ of their income. This ________ capital in their economy and raises economic growth.
A | Developing countries; large proportion; decreases | |
B | Developing countries; small proportion; increases | |
C | High-income countries; large proportion; increases | |
D | High-income countries; small proportion; increases |
Question 6
The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.
A
A | government | |
B | households | |
C | banks | |
D | firms |
Question 7
The U.S. economy has been more stable since 1950.
True
False
Question 8
When the economy reaches a trough in a business cycle, which of the following will occur?
A | Income, production, and employment will continue to fall. | |
B | Income, production, and employment will begin to rise. | |
C | Income and production will rise, but employment will continue to fall. | |
D | Employment rises, but income and production will continue to fall. |
Question 9
In a closed economy, what is the relationship between saving and investment?
A | Saving is greater than investment. | |
B | Investment is greater than saving. | |
C | Investment is equal to saving. | |
D | Investment may be greater or smaller than saving. |
Question 10
The per-worker production function shows the relationship between ________ per hour worked and ________ per hour worked, holding ________ constant.
A | labor; real GDP; technology | |
B | capital; real GDP; technology | |
C | labor; capital; real GDP | |
D | capital; labor; real GDP |
Question 11
New growth theory states that increases in ________ capital will result in ________ at the ________ level.
A | knowledge; increasing returns to scale; firm | |
B | physical; decreasing returns to scale; firm | |
C | knowledge; decreasing returns to scale; economy | |
D | knowledge; increasing returns to scale; economy |
Question 12
Which of the following is not a reason why the Industrial Revolution occurred when and where it did?
A | The British government was committed to upholding private property rights. | |
B | The British government was able to eliminate arbitrary increases in taxes. | |
C | The British government was able to more easily seize wealth. | |
D | Institutional changes by the British government helped protect wealth. |
Question 13
Growth in real GDP per capita for the world economy was greatest during
A | the seventeenth century. | |
B | the eighteenth century. | |
C | the nineteenth century. | |
D | the twentieth century. |
Question 14
Which of the following is a normative statement about economic growth?
A | Economic growth is associated with higher labor productivity growth. | |
B | Economic growth increases GDP per capita. | |
C | Economic growth hurts developing countries. | |
D | Foreign direct investment stimulates economic growth. |
Question 15
The effect of a recession on a company like Whirlpool Corporation is such that
A | sales decline more sharply for Whirlpool as compared to firms that do not produce durable goods. | |
B | profits fall less sharply as compared to firms that do not produce durable goods. | |
C | the decline in sales is more short-lived as compared to firms that do not produce durable goods. | |
D | there is no difference in the impact of the recession on its profits as compared to firms that do not produce durable goods. |
Question 16
For the recessions in the United States since the 1950s,
A | cyclical unemployment has been non-existent. | |
B | unemployment rises on average by about 1.2 percentage points 12 months after a recession begins. | |
C | unemployment falls on average by 2 percentage points 12 months after a recession begins. | |
D | unemployment rises on average about 5 percentage points 12 months after a recession begins. |
Question 17
You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?
A | a reduction in sales taxes | |
B | an investment tax credit | |
C | a reduction in taxes on luxury yachts | |
D | All of these |
Question 18
In comparison to a government that runs a balanced budget, when the government runs a budget deficit,
A | the equilibrium interest rate will fall. | |
B | business investment will fall. | |
C | household savings will fall. | |
D | None of these |
Question 19
If labor productivity growth slows down in a country, this means that the growth rate in ________ has declined.
A | labor force participation | |
B | the quantity of goods or services that can be produced by one hour of work | |
C | the working-age population | |
D | nominal GDP |
Question 20
Policies to promote growth by increasing saving and investment work through
A | decreasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital. | |
B | increasing the supply of loanable funds, increasing the interest rate, raising the level of investment in physical capital. | |
C | increasing the supply of loanable funds, lowering the interest rate, lowering the level of investment in physical capital. | |
D | increasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital. |