Exam 2 Flashcards
Productivity is generally measured as:
Output per worker.
Increases in productivity per person lead to:
Increases in per capita income
Economic growth
Increase in GDP per capita
When people are educated, they become:
More productive to society, because they have more skills to apply to a job
Countries with low levels of GDP per capita usually also have:
Low levels of schooling
An example of a natural resource is:
A river
A forest
A coal deposit
If a country has a high level of growth in income, it:
Must be rapidly increasing its GDP per capita
The convergence theory states that:
Poorer countries will grow faster than rich ones
A reduction in current consumption to pay for the investment in capital intended to increase future production is known as the:
Investment trade- off effect
The poorer a country is:
The more difficult it is to pay for things that will bring it out of poverty.
According to the rule of 70, if a country grows at an average rate of 2 percent per year, what would happen after 35 years?
The country’s real GDP per capita would double
During periods of recession:
Unemployment is more common
Unemployment occurs when someone:
Wants to work but can’t find a job
The labor demand curve:
Is provided by firms who want to hire workers at each given wage
The equilibrium price of labor is called:
The wage
Structural employment:
Is unemployment that results from a mismatch between the skills workers can offer and the skills that are in demand
Real- wage unemployment can be caused by which of the following?
Minimum wage laws
The business cycle matters for unemployment because:
it affects the demand for labor
Those who oppose minimum wage legislation argue that:
Setting a wage above the market- clearing equilibrium creates unemployment
If the minimum wage is set at a level above the equilibrium wage:
It could cause unemployment
Unemployment insurance is:
Money that is paid by the government to people who are unemployed
In the macroeconomic model of aggregate supply and aggregate demand, price is:
Calculated as a weighted average of the prices of all goods and services
The aggregate demand curve slopes:
Downward, like individual demand curves
Higher interest rates make it:
More expensive to borrow
If prices increase only in the Unites States, then:
U.S. Goods become relatively more expensive than goods from other countries
If U.S. Prices increase relative to the rest of the world, we would expect:
Exports to decrease and NET EXPORTS to decrease
There is no relationship between the price level and which component of GDP?
(G) Government purchases
A decrease in consumer confidence will cause:
A shift in aggregate demand to the left
In the short run the aggregate supply curve:
Slopes upward
In the long run:
Aggregate supply is fixed
The effect of a shift in the aggregate demand curve due to an increase in consumer confidence will be:
An increase in both prices and output in the short run
