One characteristic that has allowed the U.S. economy to change the mix of output in response to consumer demand is the

As of 2010, per capita GDP in the United States was approximately how many times the world average?

Multiple Choice

7.


9.


3.


5.

Answer
5.
Explanation
The United States produces five times the world average per capita GDP.

Per capita GDP will definitely rise if

Multiple Choice
The population falls and GDP does not fall.
There is a decrease in the size of the working population.
The rate of economic growth is less than the rate of population growth.
The rate of economic growth falls.
Answer
The population falls and GDP does not fall.

Explanation
Low population growth rates coupled with higher rates of economic growth make per capita GDP rise.

Per capita GDP will definitely fall if

Multiple Choice
The population falls.
The rate of economic growth falls.
The rate of economic growth is less than the rate of population growth.
There is a decrease in the size of the working population.
Answer
The rate of economic growth is less than the rate of population growth.
Explanation
In countries with high population growth rates, living standards will fall if GDP growth does not keep pace.

An example of human capital would be

Multiple Choice
A computer.
Carpentry skills.
A carpenter's saw.
All of the choices are correct.
Answer
Carpentry skills.
Explanation
Human capital represents the quality of labor, including skills and abilities.

Which of the following is considered a service in the calculation of GDP?

Multiple Choice
Manufacturing reclining chairs.
Constructing new homes.
Manufacturing automobiles.
Tax preparation.
Answer
Tax preparation.
Explanation
Any consumption spending on intangibles is for services.

One characteristic that has allowed the U.S. economy to change the mix of output in response to consumer demand is the

Multiple Choice

Labor-intensive production process.

Factor mobility which is the increased ease with which resources move from one industry to another.
Abundance of scarce resources.
Large number of proprietorships.
Answer
Factor mobility which is the increased ease with which resources move from one industry to another.
Explanation
Economies will be more responsive to change when resources can be easily reallocated to more productive uses.

The best definition of GDP is

Multiple Choice
The sum of the physical amounts of goods and services in the economy.
A measure of the per capita economic growth rate of the economy.
A dollar measure of final output produced during a given time period within a nation’s borders.
A physical measure of the capital stock of the economy.
Answer
A dollar measure of final output produced during a given time period within a nation’s borders.
Explanation
GDP is a measure of how well a nation is doing economically, especially in terms of its production of all final goods and services.

Which of the following contributes to the high productivity of American workers?

Multiple Choice
The low level of factor mobility.
The labor-intensive production process in the United States.
The decreasing investment in human capital.
The abundance of capital relative to labor.
Answer
The abundance of capital relative to labor.
Explanation
Ceteris paribus, the more capital a nation has relative to labor, the more productive its workers will be.

Outsourcing leads to

Multiple Choice
Decreases in total output, but with no changes in the number of domestic jobs available.
Increases in total output, but with temporary job losses for some domestic workers.
Increases in total output, but with permanent job losses for some domestic workers.
Decreases in total output, along with permanent job losses for some domestic workers.
Answer
Increases in total output, but with temporary job losses for some domestic workers.
Explanation
While outsourcing may eliminate some domestic jobs in the short run, it ultimately creates many more domestic jobs in the long run.

One characteristic that has allowed the U.S. economy to change the mix of output in response to consumer demand is the

Multiple Choice
Labor-intensive production process.
Factor mobility which is the increased ease with which resources move from one industry to another.
Large number of proprietorships.
Abundance of scarce resources.
Answer
Factor mobility which is the increased ease with which resources move from one industry to another.
Explanation
Economies will be more responsive to change when resources can be easily reallocated to more productive uses.

The investment in human capital through education and training can result in

Multiple Choice
Greater productivity.
Less capital-intensive production.
Low factor mobility.
Reduced output per labor hour.
Answer
Greater productivity.
Explanation
Human and physical capital both increase the productivity of workers.

Which of the following will contribute to accelerated growth for the U.S. economy?

Multiple Choice
A decrease in tax credits for research and development.
A decrease in factor mobility.
A decrease in government involvement in copyright laws.
Increased use of outsourcing for inputs and increased use of comparative advantage for trade in final goods and services.
Answer
Increased use of outsourcing for inputs and increased use of comparative advantage for trade in final goods and services.
Explanation
Outsourcing of inputs, as well as comparative advantage in selection of productive output, make a country more efficient in production and able to enjoy a higher standard of living.

In terms of an economy's production possibilities curve, a decrease in the level of human capital, ceteris paribus, will cause

Multiple Choice
An expansion of the curve.
An inward shift of the curve.
A movement along the curve.
A movement from the curve to a point inside the curve.
Answer
An inward shift of the curve.
Explanation
A decrease in any resource, including human capital, will decrease a nation's production possibilities curve.

When the government provides a legal framework,

Multiple Choice
Private market transactions suffer and government market transactions suffer.
Private market transactions suffer and government market transactions benefit.
Private market transactions benefit and government market transactions benefit.
None of the choices are correct.
Answer
Private market transactions benefit and government market transactions benefit.
Explanation
Without guarantees from both buyer and seller as established in contracts, many private market and government activities would suffer, thereby harming the economy.

Outsourcing leads to

Multiple Choice
Decreases in total output, along with permanent job losses for some domestic workers.
Decreases in total output, but with no changes in the number of domestic jobs available.
Increases in total output, but with temporary job losses for some domestic workers.
Increases in total output, but with permanent job losses for some domestic workers.
Answer
Increases in total output, but with temporary job losses for some domestic workers.
Explanation
While outsourcing may eliminate some domestic jobs in the short run, it ultimately creates many more domestic jobs in the long run.