ECON 1100 – Global Economics (Section 07) Exam #2 – Spring 2011 (Version C) – Answer Key 1. _________________ refers to the skills, education, and training which individuals in the labor force possess. A. Human Capital 2. The Gini-Coefficient provides a quantitative measure of A. income equality/inequality within a society. 3. Per Capita GDP in Singapore is approximately $48,900. This figure: C. is greater than the Per Capita GDP of the United States as a whole (approximately $46,000), but is less than the Per Capita GDP of the state of Connecticut (approximately $55,319). 4. Suppose that “County A” were to realize a constant Real GDP Growth Rate of 2% per year. It follows that Real GDP would double A. in roughly 35 years. 5. Adam Smith was C. an 18th century Scottish economist. 6. Which of the following countries experienced an annual inflation rate of roughly 12,563% in 2008? D. Zimbabwe. 7. Between 1980 and 2007 the “percentage of income earned by the Top 10% of households in the United States” B. increased from roughly 32.13% of society’s income to roughly 48.05% of society’s income. 8. On September 4, 2009, Gov. Arnold Schwarzenegger offered a $100,000 reward for anyone who could provide information leading to the arrest and conviction of the arsonists who set a wildfire which was then burning in southern California (a fire which claimed the lives of two firefighters). In this situation, Gov. Schwarzenegger was attempting to obtain the desired information by D. offering a material incentive. 9. __________________ is the subfield of economics that compares the structure and performance of different types of economic organization. D. Comparative Economic Systems10. Maurice is a citizen of Canada, but lives, works, and attends school in the United States. Last year he went on vacation to Mexico during Spring Break. In order to pay for his college tuition, he works at a carwash in Kennesaw, GA. Last year he provided “car washing services” valued at $22,000. The value of these services would be included in the calculation of GDP for B. the United States, since that is where the production took place. 11. Suppose that between 2011 and 2014 both the Unemployment Rate and Inflation Rate were to decease in Germany. It follows that the value of the Misery Index in 2014 _____________ the value of the Misery Index in 2011. B. must be less than 12. ______________ refers to “the degree to which decision makers in an economy experience a real system that differs from the nominally defined system.” D. Corruption 13. The _____________________ are nations without large stocks of technologically advanced capital and a well educated labor force (such as Chile, Panama, Thailand, Bolivia, India, Rwanda, and Ethiopia) C. “Less Developed Countries” 14. Focusing on the “household at the 40th Percentile of earned income” in the United States, over the past three decades the “real income” of the household at this cutoff level B. increased from $41,950 to $45,207 between 1980 and 1989, and then further increased to $49,510 by 2007. 15. The “Catch-up effect” suggests that, all other factors fixed, B. those economies with currently low levels of GDP will tend to experience higher GDP growth rates. 16. Which of the following is NOT a basic characteristic of Capitalism? C. Consumption goods are distributed to households on the basis of “need.” 17. Based upon to the values of Gini-Coefficients noted in lecture, incomes in the “market oriented economies” of Singapore (52.SingG ) and the United States (45.USG ) are distributed less equally than in the “less market oriented economies” of Norway ( 23.SwdnG ) and Canada ( 32.CG ). Which of the following statements is also true? B. However, “GDP Per Capita (PPP)” is higher in the former countries ($48,900 in Singapore and $46,000 in the United States), than in the latter countries ($36,900 in Sweden and $38,200 in Canada). 18. A country would likely be able to realize “economic growth” as a result of C. being able to more easily access and use their available natural resources.19. The “Agency of International Development” is B. a branch of the U.S. State Department, which oversees the administration of U.S. foreign aid to developing countries. 20. Based upon the discussion in lecture and the textbook, which of the following economies has the highest level of corruption (i.e., is the “most corrupt”)? B. India. 21. Which of the following statements regarding “GDP in the U.S.” is accurate? A. “Nominal GDP was roughly 467.7 times larger in 2007 than in 1908.” 22. Based upon this graph, we can tell that A. income in Brazil was distributed less equally in 2011 than in 1983. 23. Suppose (Area A)=(.14), (Area B)=(.06), and (Area C)=(.30). It follows that between 1983 and 2011 the value of the Gini-Coefficient in Brazil B. increased from (.28) to (.40). 24. The Index of Economic Competitiveness (which was discussed in lecture) attempts to measure B. the capacity of the national economy to achieve growth over the medium term, controlling for the current level of development. 25. ___________________ refers to improvements (over time) in a society’s quality of life and standard of living. C. Economic Development 26. The “Great Inflation” refers to the period of high inflation in the U.S. B. during the early 1970’s through the early 1980’s (from roughly June 1973 to July 1982). 27. __________________ refers to “attempts to convince individuals to behave in a certain manner because doing so is the right thing to do.” A. Moral Persuasion 28. The Phillips Curve directly illustrates B. the tradeoff between unemployment and inflation that an economy faces. 29. “Real GDP Per Capita” is defined as C. the value of Real GDP divided by the value of total population. 30. From 1983-2009, the U.S. experienced Inflation Rates which B. were relatively low, exceeding a value of 4.83% in only one year during this 27 period.31. The “outward shift” of the PPC (from “1992 PPC” to “2011 PPC”) which occurred between 1992 and 2011 could be best described as C. Economic Growth. 32. If this society had instead chosen “Point B” in 1992, then the relevant PPC in 2011 would likely lie ___________________ in the graph above. D. somewhere beyond the curve labeled
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