Chapter 02 Test Bank Key
1.
Approximately how much of the world’s output does the United States produce?
2. The United States has roughly how much of the world’s population?
3. The United States has roughly how much of the world’s arable
land? A. 14 percent.
4. The best definition of GDP is
A. The sum of the physical amounts of goods and services in the economy.
5.
The measure of final goods and services produced in the United States is the
6. Approximately how much of the world’s output does China produce?
7. China has roughly how much of the world’s population?
8. Which of the following countries (or regions) produces the most output annually?
9. Which of the following statements is true about the U.S. economy?
10. Per capita GDP is
A. The sum of consumer goods, investment goods, government services, and net exports.
11. Average GDP per person
is A. Also known as GDP.
12. Which of the following is an indicator of how much output the average person would get if all output were
divided up evenly among the population?
A. GDP.
13. Those who are interested in assessing the relative standard of living of different countries over a given
time period are most likely to look at
A. GDP.
14. The best measure of how much output the average person would get if all output were divided evenly
among the population would be
A. GDP.
15. Average living standards are best measured using
16. What percentage of the world’s population subsists on incomes of less than $2 a day?
A. 33 percent.
17. Per capita GDP will rise if GDP
A. Increases more rapidly than the population increases.
18. Per capita GDP will definitely fall if
A. The population falls.
19. Per capita GDP will definitely rise if
20. If population growth is less than output growth for a country,
21. If output growth exceeds population growth for a country,
22. Economic growth
23. On average, since 1900 U.S. output has grown roughly ____ times faster than population growth.
A. 5
24. On average, since 1900 the population of the United States has grown by roughly ____ percent per year.
25. On average, since 1900 U.S. output has grown by roughly ____ percent per year.
26. Which of the following countries experienced a decline in total output from 2000 to
2009? A. Canada.
27. Which of the following countries had the highest average growth rate for per capita GDP from 2000 to 2009?
28. The current U.S. economy is based primarily on the production of
29. As the U.S. economy relies more and more heavily on the production of services rather than goods,
A. GDP will decrease since there will be less real production.
30. Which of the following is considered a service in the calculation of
GDP? A.
Topic: WHAT AMERICA PRODUCES
31. Differences in size of real GDP across countries are best explained
by A. Population growth.
32. Which of the following has been a century-long trend in the United States?
33. Which of the following contains the two sectors whose percentage contribution to the real GDP has declined
since 1900?
34.
During the past 100 years, the United States has transformed into primarily
35. To an economist, the four factors of production
are A. Labor, workers, profit, and services.
36.
The ‘WHAT goods and services does the US produce’question can best be answered using data about which
of the following?
37. As of the year 2000, services accounted for what percentage of total U.S. output?
38. As of the year 2000, manufacturing, mining, and construction accounted for what percentage of total U.S.
output?
A. 15 percent.
39. As of the year 2000, agriculture accounted for what percentage of total U.S. output?
A. 1 percent.
40. Which component(s) of U.S. real GDP decreased in size relative to total U.S. real GDP from 1950 to 2000?
41. Which component(s) of U.S. real GDP increased in size relative to total U.S. real GDP from 1950 to 2000?
A. Only agriculture.
42. According to the World View chart in the text, from highest to lowest real GDP, which is correct?
43. According to the World View chart in the text, from highest to lowest real GDP per capita, which is correct?
A. United States, Japan, France, Canada, China.
44. As of 2010, per capita GDP in the United States was approximately how many times the world
average? A. 3.
45. As of 2010, per capita GDP in the United States was approximately
46. A capital-intensive production process is one
that A. Has a high ratio of labor to capital.
47. A labor-intensive production process is one that
48. The United States has a larger real GDP than China because
A. The U.S. population is smaller but works in capital-intensive jobs.
49.
As a country’s human capital capacity increases, we observe that the relative number of
50. Regarding increasing productivity, factor mobility is
A. Important in that it helps to fix a stable labor-intensive production process.
51. Factor mobility aids in economic development when
A. A region suffers a natural disaster such as an earthquake or tornado.
52. How will an increase in factor mobility, ceteris paribus, affect an economy’s production possibilities
curve? A. Shift the curve inward.
53. How will a decrease in technology from a natural disaster such as a hurricane, ceteris paribus, affect an
economy’s production possibilities curve?
54. A U.S. firm that outsources jobs would be
55. Although the necessary role of government in the economy is highly debated, many people agree that it
should
56. In providing a legal framework, the government
A. Protects patents to encourage entrepreneurship.
57. When the government provides a legal framework,
A. Private market transactions suffer and government market transactions suffer.
58. When the government provides a legal framework,
59. The term externalities refers to
A. Only positive benefits of a market activity borne by a third party.
60. An example of a positive externality is
A. Increased factory use of private sector robotics that came from government research.
61. The government regulates monopolies in order to
62. The government intervenes in the economy to protect labor
by A.
63. According to economists, which of the following is NOT a factor of production?
64. An example of human capital would be
65. The term factor of production refers to
66. Human capital is defined as the
67. How will an increase in the level of human capital, ceteris paribus, affect an economy’s production
possibilities curve?
68. As a nation’s average education level increases, the nation’s level of productivity
69. Which of the following will increase the level of human capital in an
economy? A. An increase in land mass.
70. In terms of an economy’s production possibilities curve, a decrease in the level of human capital, ceteris
paribus, will cause
71. Productivity is a measure of
A. Output per unit of input.
72. Productivity
A. Rises when the value of output rises relative to the cost of inputs.
73. Which of the following definitely means productivity has increased?
74. When economists describe a production process as capital-intensive, they mean that the
75. Production processes that use a high ratio of capital to labor inputs are referred to as
A. Labor–intensive.
76. Which of the following contributes to the high productivity of American
workers? A. The labor-intensive production process in the United States.
77. Which of the following is likely to be most capital-intensive?
78. The investment in human capital through education and training can result in
79. Factor mobility refers to
A. Technological change in the use of capital.
Topic: HOW AMERICA PRODUCES
80. When workers move from one industry to another in response to demand changes, this is an example of