ECON 1100 – Global Economics (Section 03) Exam #3 – Fall 2009 (Version C) – Answer Key Multiple Choice Questions (212 points each): 1. The “Distribution Function of Government” refers to b. Government policies aimed at altering the final consumption of goods/services across consumers. 2. After World War II, a consensus emerged in France for a “new economy” consisting of: d. a “Private Sector” (in which resources are owned and operated by individuals), a “Nationalized Sector” (in which resources are directly owned and directly operated by the national government), and a “Controlled Sector” (in which resources are owned by individuals, but the use of resources is dictated by the state). 3. Per Capita GDP in the United States as a whole is approximately a. $46,000, greater than the Per Capita GDP (PPP) of approximately $32,900 for the European Union as a whole. 4. ____________________ relied primarily upon free market institutions, but with a significant “social safety net.” b. The German Social Market Economy 5. The “replacement fertility rate” is a. the birth rate which would lead to a “constant population” over time. 6. Hans is a citizen of Austria, 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 daycare in Woodstock, GA. Last year he provided “daycare services” valued at $12,000. The value of these services would be included in the calculation of GDP for c. the United States, since that is where the production took place. 7. The ______________ are high income nations that have market economies based upon large stocks of technologically advanced capital and a well educated work force (such as the United States, Canada, Australia, New Zealand, and Japan). c. “Industrially Advanced Countries” 8. Based upon the current values of “life expectancy at birth” for different countries around the world which were discussed in lecture, c. life expectancy at birth in the U.S. (78.11 years) is neither the longest nor the shortest life expectancy in the world.9. From the mid 1950’s through the mid 1970’s, many countries throughout Europe (such as France and Germany) experienced a. relatively low levels of unemployment. 10. Per Capita GDP in Ireland is approximately $47,300. This figure: c. is greater than the Per Capita GDP of the state of Georgia (which is approximately $38,119), but is less than the Per Capita GDP of the state of Delaware (which is approximately $65,316). 11. In 2007: George earned $923,807 of income, of which he paid 24.0% in U.S. Federal Income Taxes; John earned $386,527 of income, of which he paid 30.7% in U.S. Federal Income Taxes; and Joe earned $319,853, of which he paid 20.7% in U.S. Federal Income Taxes. If “income” provides a measure of “economic capacity” and “average tax rate” provides a measure of “tax burden,” then these figures would suggest that the U.S. Federal Income Tax d. violates the notion of vertical equity. 12. In which of the following regions/countries would a typical worker be most likely to belong to a union? b. Scandinavian countries (e.g., Sweden, Finland, Norway). 13. The “Fabian Society” in the U.K. b. greatly influenced the political philosophy and platforms of the British Labor Party during the 20th Century. 14. The “Stabilization Function of Government” refers to c. Government policies aimed at minimizing fluctuations in the rate of economic growth over time. 15. ________________ refers to a situation where government revenues are less than government spending. c. A budget deficit 16. Nationalization refers to b. the acquisition of ownership and control of a privately owned enterprise by the national government, either with or without compensation to the original owners. 17. Ludwig Erhard (who became the German Director of Economic Administration in the American/British Occupation Zones in 1948) belonged to a group of economists called the “Ordoliberals,” who wanted to c. establish an economic system which relied primarily upon free markets, but with a significant “social safety net.”18. A Corporation is a. a legal entity that can, through the sale of stock, raise capital from a large number of individuals, each of whom shares in profits. 19. __________________ created a plan that “shook the French economy out of its stalemate and propelled it into the modern age.” c. Jean Monnet 20. By the late 1940’s unemployment in Great Britain b. was as low as 1.3%, a rate well below the rates (of well over 12%) which were experienced throughout the 1930’s. 21. If the United States were to enact trade policies with an objective of “Assisting Exports,” such policies would make it c. easier for U.S. firms to sell goods in other countries. 22. ________________ is the study of the performance of national economies as a whole, and the policies that governments use to improve their performance. b. Macroeconomics 23. A “Collective Good” is one that is c. non-rival in consumption and excludable. 24. Comparing Average Tax Rates in the United States resulting from the Federal Income tax in 2005 to those in 2000 c. the Average Tax Rate decreased across all income levels between 2000 and 2005. 25. Which of the following is NOT one of the primary policy tools of a Central Bank? c. Imposing Income Taxes. 26. In the United States, the “highest Marginal Tax Rate” currently imposed under the federal income tax is b. 35%, a “highest Marginal Tax Rate” which is lower than the “highest Marginal Tax Rate” of 39.6% which was in pace in 2000 but higher than the “highest Marginal Tax Rate” of 31% which was in place in 1992. 27. __________________ refers to monetary payments made by the government to certain individuals in society, with the impact of altering the distribution of income within a society. c. Income Support 28. The “General Agreement on Tariffs and Trade” b. was initially signed in 1947 by 23 countries, geographically from all reaches of the globe.29. “Fiscal Policy” is defined as government policies a. related to spending and revenue generation. 30. Which of the following statements regarding “GDP in the U.S.” is accurate? c. “Real GDP Per Capita increased between 1908 and 2004.” 31.
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