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ECON 1100 – Global Economics (Section 02) Exam #3 – Fall 2009 (Version B) Multiple Choice Questions (212 points each): 1. The U.S. Federal Income Tax a. was abolished by President Barack Obama on February 8, 2009, less than one month after taking office. b. is a Proportional Tax. c. is a Progressive Tax. d. is a Regressive Tax. 2. 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) a. “Industrially Advanced Countries” b. “Less Developed Countries” c. “Inferior Countries” d. “Second World Countries” 3. In Germany the __________________ was known as the “Economic Miracle.” a. period of prosperity which lasted from the end of World War I through the start of World War II, during which the unemployment rate was less than 2.5% in every single year b. prolonged period from the mid 1950’s through the mid 1970’s, during which the country experienced considerable economic growth, low levels of unemployment, and low levels of inflation c. tremendous, almost overnight (and as yet unexplained) increases in living standards in the areas which were formerly “East Germany,” which occurred in late 1990 following German Reunification d. first decade of the 21st century, during which time the Real GDP Per Capita increased to a value of $81,750 (higher than any other country in the world) 4. In 2008, the annual inflation rate in Zimbabwe was approximately _______. a. –12.5% b. 0.125% c. 12.5% d. 12,563% 5. Government provision of “high school education” is a good example of a. government provision of information. b. income support. c. redistribution in-kind. d. a barrier to trade.6. Which of the following industries would NOT be considered part of the “Commanding Heights” of an economy? a. Banking and Financial Markets. b. Railroad transportation. c. The sports-entertainment industry. d. Coal mining. 7. Suppose that for the world as a whole the current fertility rate is above the “replacement fertility rate.” This observation would imply that a. total global population must be remaining constant over time. b. total global population must be increasing over time. c. the population of every single country around the world must be increasing over time. d. More than one of the above answers is correct. 8. _____________________ refers to the production of goods and services, valued in each period according to current period prices. a. Real GDP b. Real GDP per capita c. Nominal GDP d. The Inflation Rate 9. The “Unemployment Rate” is defined as a. the number of people in the workforce who currently do not have a job. b. the ratio of number of people in a country who currently do not have a job to the number of people who currently do have a job. c. the percentage of the people in the workforce who currently do not have a job. d. the percentage of people in the workforce who have a job, but who feel that they are “undercompensated,” “unappreciated at work,” or “could easily find a better job.” 10. In most industrialized countries, the role of government in the economy ________ during the first part of the twentieth century and _________ during the last part of the twentieth century. a. increased; then decreased. b. decreased; then increased. c. increased; then continued to increase. d. decreased; then continued to decrease. 11. _________________ are financial enterprises with the primary function of protecting individuals and firms from exposure to risk. a. Investment Banks b. Insurance Companies c Union leaders d. Mutual Funds12. Johannes Semler was replaced by Ludwig Erhard as the German Director of Economic Administration in the American/British Occupation Zone after referring to U.S. food aid to Germany as a. ambrosia. b. chicken feed. c. dog food. d. gruel. 13. Under the current U.S. Federal Income Tax, the “Top 1% of wage earners” pay a. nearly 100% of all taxes collected. b. about 39.38% of all taxes collected, an amount roughly equal to the 40.33% of all taxes collected paid by the “bottom 95% of wage earners.” c. about 21.20% of all taxes collected, an amount exactly equal to their share of total adjusted gross income earned. d. virtually no taxes, due to all of the loopholes in the current tax code. 14. _______________ specifies what different parties must do under all possible realizations of external circumstances, and provides for enforcement or compensation for non-performance. a. A contract b. A union c. The Beveridge Report d. An insurance policy 15. _______________ is a system in which the government assumes the ultimate responsibility of improving the well-being of its citizens, particularly with respect to healthcare, education, employment, and social security. a. The Welfare State b. The Economic Miracle c. Nationalization d. Planification 16. The “________________ Function of Government” broadly refers to policies aimed at minimizing fluctuations in the rate of economic growth over time. a. Stabilization b. Taxation c. Allocation d. Distribution 17. The “General Agreement on Tariffs and Trade” a. would ultimately help create a “global economy,” in which economic activity would transcend national borders. b. was the primary cause of World War II. c. was an agreement signed in 1946 between Germany and France, making it illegal for either country to trade with any other country. d. More than one of the above answers is correct.18. Per Capita GDP in Singapore is $48,900, while Per Capita GDP in Mexico is only $12,500. These values imply that a. people in Singapore must be happier than people in Mexico. b. the market value of goods/services produced per person in Singapore is greater than in Mexico. c. people in Singapore are generally “more physically attractive” than are people in Mexico. d. More than one of the above answers is correct. 19. “The General Theory of Employment, Interest and Money” was written by a. The “Fabian” Fabrice Morvan b. Friedrich von Hayek c. John Maynard Keynes d. William Beveridge 20. The discussion in lecture of the professional career of Cincinnati Bengals quarterback Greg Cook (along with the comparison to the careers of Drew Brees and Chad Pennington) illustrated how a.


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