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kaplan mt445 exam




Question;1. In the United States and in most European countries;aging populations and declining birthrates threaten public finances. As the;population ages, there are fewer workers paying taxes relative to the number of;retired people receiving government benefits. Which of the following government;policies would NOT help reduce the pressure on public finances? (Points: 1);offer financial;incentives to increase the birthrate;reduce taxes paid by;current workers so that they an save for their future;reduce retiree;benefit payments;raise the retirement;age;2. In the first six months of 2003, branches of Commerce;Bank in New York City were robbed 14 times. The New York City Police;recommended steps the bank could take to deter robberies, including the;installation of plastic barriers called "bandit barriers." The police;were surprised the bank did not take their advice. According to a deputy;commissioner of police, "Commerce does very little of what we recommend.;They've told our detectives they have no interest in ever putting in the;barriers.;It would seem that Commerce bank would have a strong;incentive to install "bandit barriers" to deter robberies. Why;wouldn't they do it? (Points: 1);The banks would;rather delay installation of any theft deterring equipment in anticipation of;new lower cost innovations in the security devices market.;The banks must have;weighed the cost of installing bandit barriers against the benefits and decided;that they have "no interest in ever putting in the barriers".;The banks are;concerned that "bandit barriers" would send the wrong message to;customers -- that the bank is unsafe.;The banks probably;resent any interference from the police department.;3. Cassie's Quilts alters, reconstructs and restores;heirloom quilts. Cassie has just spent $800;purchasing, cleaning and reconstructing an antique quilt;which she expects to sell for $1,500 once she is finished. After having spent;$800, Cassie discovers that she would need some special period fabric that;would cost her $200 in material and time in order to complete the task.;Alternatively, she can sell the quilt "as is" now for $900. What is;the marginal cost of completing the task? (Points: 1);$200;$500;$1,000;$1,000 plus the value;of her time;4. The term "market" in economics refers to;(Points: 1);a place where money;changes hands.;a legal institution;where exchange can take place.;a group of buyers and;sellers of a product and the arrangement by which they come together to trade.;an organization which;sells goods and services.;5. The revenue received from the sale of an additional unit;of a product (Points: 1);is a marginal benefit;to the firm.;is called profit.;is called gross;sales.;is called a net gain.;6.;Table 2-3;Table 2-3 shows the number of labor hours required to;produce a digital camera and a pound of wheat in China and South Korea.;Refer to Table 2-3. China has a comparative advantage in;(Points: 1);both products.;wheat production.;digital camera;production.;neither product.;7. The production possibilities frontier model shows that;(Points: 1);if consumers decide;to buy more of a product its price will increase.;a market economy is;more efficient in producing goods and services than is a centrally planned;economy.;economic growth can;only be achieved by free market economies.;if all resources are;fully and efficiently utilized, more of one good can be produced only by;producing less of another good.;8. Which of the following countries does not come close to;the free market benchmark? (Points: 1);The United States;Japan;Cuba;France;9. In 2002, BMW made a tactical decision to use a robot to;attach the gearbox to the engines of its vehicles instead of using two workers;as it had done previously. The robot method had a higher cost but installed the;gearbox in exactly the right position. In making this decision, BMW (Points;1);faced no tradeoffs because;the robot method increased efficiency.;faced a tradeoff;between higher cost and lower precision (in installing the gearbox in exactly;the right position).;adopted a negative;technological change because it replaced workers with robots.;eroded some of its;competitiveness in the luxury car market because of its increased cost of;production.;10. A successful market economy requires well defined;property rights and (Points: 1);balanced supplies of;all factors of production.;an independent court;system to adjudicate disputes based on the law.;detailed government;regulations.;a safety net to;ensure that those who cannot participate in the market economy can earn an;income.;11. A major factor contributing to the slow growth rate of;less developed economies is (Points: 1);the lack of;well-defined and enforceable property rights.;the lack of natural;resources.;the lack of workers.;the high rate of;illiteracy.;12. Which of the following would cause both the equilibrium;price and equilibrium quantity of barley (assume that barley is an inferior;good) to increase? (Points: 1);An increase in;consumer income.;A drought that;sharply reduces barley output.;A decrease in;consumer income.;Unusually good;weather that results in a bumper crop of barley.;13.;Table 3-1;Refer to Table 3-1. The table above shows the demand;schedules for loose-leaf tee of two individuals (Sunil and Mia) and the rest of;the market. If the price of loose-tea raises from $3 to $4 the market quantity;demanded would (Points: 1);decrease by 32;pounds.;increase by 64;pounds.;increase by 32;pounds.;decrease by 64;pounds.;14. If the quantity demanded for a product exceeds the quantity;supplied the market price will rise until (Points: 1);the quantity demanded;equals the quantity supplied. The product will then no longer be scarce.;quantity demanded;equals quantity supplied. The equilibrium price will then be greater than the;market price.;only wealthy;consumers will be able to afford the product.;quantity demanded;equals quantity supplied. The market price will then equal the equilibrium;price.;15. What is the difference between an "increase in;supply" and an "increase in quantity supplied"? (Points: 1);There is no;difference between the two terms, they both refer to a shift of the supply;curve.;There is no;difference between the two terms, they both refer to a movement along a given;supply curve;An "increase in;supply" means the supply curve has shifted to the right while an;"increase in quantity supplied" means at any given price supply has;increased.;An "increase in;supply" means the supply curve has shifted to the right while an;"increase in quantity supplied" refers to a movement along a given;supply curve in response to an increase in price.;16.;Figure 3-4;Refer to Figure 3-4. The figure above represents the market;for canvas tote bags. Compare the conditions in the market when the price is;$50 and when the price is $35. Which of the following describes how the market;differs at these prices? (Points: 1);At each price there;is a surplus, the surplus is greater at $35 than at $50.;The difference;between quantity supplied and quantity demanded is greater at $50 than at $35.;At each price there;is a surplus, firms will lower the equilibrium price in order to eliminate the;surplus.;At each price the;supply of tote bags exceeds that demand for tote bags.;17. Brett buys a new cell phone for $100. He receives;consumer surplus of $80 from the purchase. How much does Brett value his cell;phone? (Points: 1);$180;$100;$80;$20;18. The difference between the highest price a consumer is;willing to pay for a good and the price the consumer actually pays is called;(Points: 1);producer surplus.;the substitution;effect.;the income effect.;consumer surplus.;19.;Figure 4-5;Refer to Figure 4-5. The figure above represents the market;for iced tea. Assume that this is a competitive market. If 20,000 units of iced;tea are sold (Points: 1);the deadweight loss;is equal to economic surplus.;producer surplus;equals consumer surplus.;the marginal benefit;of each of the 20,000 units of iced tea equals $3.;marginal benefit is;equal to marginal cost.;20. Economic surplus (Points: 1);does not exist when a;competitive market is in equilibrium.;is equal to the sum;of consumer surplus and producer surplus.;is the difference;between quantity demanded and quantity supplied when the market price for a;product is greater than the equilibrium price.;is equal to the;difference between consumer surplus and producer surplus.;21.;Figure 4-9;Figure 4-9 shows the market for cigarettes. The government;plans to impose a unit tax in this market.;Refer to Figure 4-9. What is the size of the unit tax?;(Points: 1);$8;$5;$3;Cannot be determined;from the figure.;22. Suppose the demand curve for a product is downward;sloping and the supply curve is upward sloping. If a unit tax is imposed in the;market for this product, (Points: 1);sellers bear the;entire burden of the tax.;the tax burden will;be shared among the government, buyers and sellers.;buyers bear the;entire burden of the tax.;the tax burden will;be shared by buyers and sellers.;23. Which of the following would result in a lower absolute;value of the price elasticity of demand for a product? (Points: 1);wide variety of;substitutes available for the good;short time period;considered;the good is a luxury;item;the expenditure on;the good large relative to one's budget;24. If the percentage change in price is 20 percent and the;value of the price elasticity of demand is -5, then quantity demanded (Points;1);will increase by 100;percent.;will increase by 5;percent.;will decrease by 100;percent.;impossible to;determine without additional information.;25. When demand is unit price elastic, a change in price;causes total revenue to stay the same because (Points: 1);the percentage change;in quantity demanded exactly offsets the percentage change in price.;buyers are buying the;same quantity.;total revenue never;changes with price changes.;the change in profit;is offset by the change in production cost.;26. Which of the following statements about the price;elasticity of demand is correct? (Points: 1);The elasticity of;demand for a good in general is equal to the elasticity of demand for a;specific brand of the good.;The absolute value of;the elasticity of demand ranges from zero to one.;Demand is more;elastic in the long run than it is in the short run.;Demand is more;elastic the smaller percentage of the consumer's budget the item takes up.;27. The price elasticity of the supply of teenage labor;services is approximately 1.36. Suppose the minimum wage rises from $6.60 per;hour to $7.00. Using the midpoint formula, calculate the approximately change;in the will the quantity supplied of teenage labor. (Points: 1);5.9 percent;13.6 percent;8 percent;There is insufficient;information to answer the question.;28. A firm has successfully adopted a positive technological;change when (Points: 1);it can produce more;output using the same inputs.;it produces less;pollution in its production process.;can pay its workers;less yet increase its output.;it sees an increase;in worker productivity.;29. Refer to Figure 10-5. Identify the minimum efficient;scale of production. (Points: 1);Qa;Qb;Qc;Qd;30.;Figure 10-7;Refer to Figure 10-7. The lines shown in the diagram are;isocost lines. Which of the following shows an increase in the firm's total;cost budget while the price of labor and capital remain unchanged? (Points: 1);the movement from CE;to BF;the movement from CE;to AF;the movement from BD;to AF;the movement from BD;to CE;31.;Table 10-2;Table 10-2 shows cost data for Lotus Lanterns, a producer of;whimsical night lights.;Refer to Table 10-2. What is the average variable cost per;unit of production when the firm produces 90 lanterns? (Points: 1);$490;$33.67;$7.67;$5.40;32. What is the difference between "diminishing;marginal returns" and "diseconomies of scale"? (Points: 1);Both concepts explain;why marginal cost increases after some point but diminishing marginal returns;applies only in the short run when there is at least one fixed factor, while;diseconomies of scale applies in the long run when all factors are variable.;Both concepts explain;why average total cost increases after some point but diminishing marginal;returns applies only in the short run when there is at least one fixed factor;while diseconomies of scale applies in the long run when all factors are;variable.;Diminishing marginal;returns which applies only in the short run, when at least one factor is fixed;explains why marginal cost increases, while diseconomies of scale which applies;in the long run, when all factors are variable, explains why average cost;increases.;Diminishing marginal;returns which applies only in the short run, when at least one factor is fixed;explains why average variable cost increases, while diseconomies of scale which;applies in the long run, when all factors are variable, explains why average;total cost increases.;33. The president of Toyota's Georgetown plant was quoted as;saying, "Demand for high volumes saps your energy. Over a period of time;it eroded our focus [and] thinned out the expertise and knowledge we;painstakingly built up over the years." This quote suggests that (Points;1);Toyota was;experiencing an excess demand for its automobiles which it had difficulty;keeping up with.;as Toyota expanded;its capacity, it experienced diseconomies of scale.;Toyota was focused on;"churning" out cars that it did not invest sufficiently in training;its workers.;high demand for;Toyota's cars prevented the company from focusing on its strength: auto design.;34.;Figure 11-1;Refer to Figure 11-1. If the firm is producing 200 units;(Points: 1);it breaks even.;it is making a loss.;it should cut back;its output to maximize profit.;it should increase its;output to maximize profit.;35. The demand for each seller's product in perfect;competition is horizontal at the market price because (Points: 1);each seller is too;small to affect market price.;the price is set by;the government.;all the sellers get;together and set the price.;all the demanders get;together and set the price.;36. Market supply is found by (Points: 1);vertically summing;the relevant part of each individual producer's marginal cost curve.;horizontally summing;the relevant part of each individual producer's marginal cost curve.;vertically summing;each individual producer's average total cost curve.;horizontally summing;each individual producer's average total cost curve.;37. Which of the following describes a situation in which a;good or service is produced at the lowest possible cost? (Points: 1);productive efficiency;allocative efficiency;marginal efficiency;profit maximization;38.;Figure 11-5;Figure 11-5 shows cost and demand curves facing a typical;firm in a constant-cost perfectly competitive industry.;Refer to Figure 11-5. What is the minimum price the firm;requires to produce output? (Points: 1);$20;$14;$5;It cannot be;determined;39. A possible advantage of a horizontal merger for the;economy is that (Points: 1);the merging firms;could avoid losses.;the merged firm might;reap economies of scale which could translate into lower prices.;the degree of;competition in the industry will be intensified.;the government stands;to collect more corporate income tax revenue.;40. A merger between the Ford Motor Company and General;Motors would be an example of a (Points: 1);vertical merger.;horizontal merger.;conglomerate merger.;trust.;41.;Figure 14-8;In 2006 the California government changed its regulatory;policy to allow competition into the cable television market. Figure 14-8 shows;the cable television market in California.;Refer to Figure 14-8. Following the policy change, the;subscription price falls from PM to Pc. What is the increase in consumer;surplus as a result of this change? (Points: 1);the area A+B+C;the area B+C;the area D+F;the area B+C+D;42. The Aluminum Company of America (Alcoa) had a monopoly;until the 1940s because (Points: 1);it was a public;enterprise.;it had a patent on;the manufacture of aluminum.;the company had a;secret technique for making aluminum from bauxite.;it had control of;almost all available supply of bauxite.;43. If a theatre company expects $250,000 in ticket revenue;from five performances and 288,000 in ticket revenue if it adds a sixth;performance, the (Points: 1);marginal revenue of;the sixth performance is $48,000.;marginal revenue of;the sixth performance is $38,000.;cost of staging the;sixth performance is probably higher than the cost of staging the previous;five.;company will be;making a loss on the sixth performance because its ticket sales will be less;than average received from the previous five.;44.;Figure 14-7;Figure 14-7 shows the cost and demand curves for the;Erickson Power Company.;Refer to Figure 14-7. Why won't regulators require that;Erickson Power produce the economically efficient output level? (Points: 1);because there is;insufficient demand at that output level;because at the;economically efficient output level, the marginal cost of producing the last;unit sold exceeds the consumers' marginal value for that last unit;because Erickson;Power will earn zero profit;because Erickson;Power will sustain persistent losses and will not continue in business in the;long run.;45. In the long run, if price is less than average cost;(Points: 1);there is an incentive;for firms to exit the market.;there is profit;incentive for firms to enter the market.;the market must be in;long-run equilibrium.;there is no incentive;for the number of firms in the market to change.;46.;Table 12-2;Eco Energy is a monopolistically competitive producer of a;sports beverage called Power On. Table 12-2 shows the firm's demand and cost;schedules.;Refer to Table 12-2. What is the maximum output (Q) that;maximizes profit and what is the price (P) charged? (Points: 1);P=$55, Q=5 cases;P=$50, Q=6 cases;P=$45, Q=7 cases;P=$40, Q=8 cases;47. If a monopolistically competitive firm breaks even, the;firm (Points: 1);is earning an;accounting profit and will have to pay taxes on that profit.;is earning zero;accounting and zero economic profit.;should advertise its;product to stimulate demand.;expand production.;48. Long run equilibrium under monopolistic competition is;similar to that under perfect competition in that (Points: 1);firms produce at the;minimum point of their average cost curves.;price equals marginal;cost.;firms earn normal;profits.;price equals marginal;revenue.;49. You have just opened a new Italian restaurant in your;hometown where there are three other Italian restaurants. Your restaurant is;doing a brisk business and you attribute your success to your distinctive;northern Italian cuisine using locally grown organic produce. What is likely to;happen to your business in the long run? (Points: 1);Your competitors are;likely to change their menus to make their products more similar to yours.;Your success will;invite others to open competing restaurants and ultimately your profits will be;driven to zero.;If your success;continues, you will be likely to establish a franchise and expand your market;size.;If you continue to;maintain consistent quality, you will be able to earn profits indefinitely.;50. OPEC periodically meets to agree to restrict the;cartel's oil output, and yet almost every member of OPEC produces more than its;own output quota. This suggests that OPEC has a (Points: 1);cooperative;equilibrium.;noncooperative;equilibrium.;new potential;entrants.;threat of substitute;goods.;51. What is a prisoners' dilemma? (Points: 1);a game that involves;no dominant strategies;a game in which;prisoners are stumped because they cannot communicate with each other;a game in which;players act in rational, self-interested ways that leave everyone worse off;a game in which;players collude to outfox authorities;52. Consider two oligopolistic industries selling the same;product in different locations. In the first industry, firms always match price;changes by any other firm in the industry. In the second industry, firms always;ignore price changes by any other firm. which of the following statements is;true about these two industries, holding everything else constant? (Points: 1);Market prices are;likely to be higher in the first industry in which firms always match price;changes by rival firms than in the second where firms ignore their rivals;price changes.;Market prices are;likely to be lower in the first industry where firms always match price changes;by rival firms than in the second where firms ignore their rivals' price;changes.;Market prices are;likely to be the same in both markets because they are both oligopolistic;markets.;No conclusions can be;drawn about the pricing behavior under these very different firm behavior.;53. Why does a prisoners' dilemma lead to a noncooperative;equilibrium? (Points: 1);because each player;had agreed before the game started to minimize the harm that he can inflict on;the other players;because each player;is uncertain how other players will play the game;because players must;choose from have a limited number of non-dominant strategies;because each rational;player has a dominant strategy to play a certain way regardless of what other;players do;54. The DeBeers Company of South Africa was able to block;competition through (Points: 1);economies of scale.;ownership of an;essential input.;government-imposed;barriers.;differentiating its;product.;55. Until the late 1990s, airlines would post proposed;changes in ticket prices on computer reservations systems several days before;the new ticket prices went into effect. Then the federal government took action;to end the practice. Now airlines can only post prices on their reservations;systems for tickets that are immediately available for sale.;Source: Scott McCartney, "Airfare Wars Show Why Deals;Arrive and Depart," Wall Street Journal, March 19, 2002.;Why would the federal government object to the old system of;posting prices before they went into effect? (Points: 1);because it is a form;of price discrimination in that consumers who need to travel immediately are;subject to different fares compared to those who will travel at a later date;when the price changes go into effect;because it is;essentially a form of price signaling, airlines try to determine the reaction;of competitors before committing to a price change;because it creates;chaos in the air travel market: if an airline plans to cut fares, then;consumers are likely to postpone purchases but if an airline plans to increase;fares, then a shortage will result.;because it makes it;more difficult for airlines to agree on ticket price changes and likely to;spark an airfare war;56. Demand in factor markets differs from demand in product;markets in that (Points: 1);the demand for a;factor of production is difficult to determine.;the demand for a;factor of production is influenced by workers' productivity and by the;producers' expected sales revenues, not by tastes and preferences of consumers.;demand for a factor;of production is based on the tastes and preferences of firms.;demand for a factor;of production is based on the tastes and preferences of resource owners.;57. Painters who paint water towers earn higher wages;relative to painters who paint houses because (Points: 1);the demand for tower;painters is greater than the demand for residential painters.;painting water towers;is more risky than painting houses.;the tower painters;union is probably more powerful than the wall painters' union.;the supply of water;tower painters exceeds the supply of wall painters.;58. According to the signaling hypothesis, (Points: 1);signaling about job;openings occur in help wanted classified ads.;a college diploma;signals to employers that a person has certain desirable characteristics.;a slowdown in output;signals to companies the need to hire more labor.;a high unemployment;rate is a signal to the government to take some policy action.;59. Customer discrimination occurs when (Points: 1);a firm pays workers;different wages based on irrelevant factors.;customers refuse to;buy products produced by a racially diverse workforce.;customers refuse to;buy products they believe to be of poor quality.;workers refuse to;serve customers of a different race.;60. Suppose a competitive firm is paying a wage of $12 an;hour and sells its product at $3 per unit. Assume that labor is the only input.;If, hiring another worker would increase output by three units per hour, then;to maximize profits the firm should (Points: 1);not change the number;of workers it currently hires.;not hire an;additional worker.;hire another worker.;There is not enough;information to answer the question.;61.;Table 16-2;Refer to Table 16-2. What is the profit-maximizing quantity;of labor that the firm should hire? (Points: 1);5 units;$4 units;$3 units;2 units;62. A decrease in the wage rate causes (Points: 1);an increase in the;quantity of labor demanded.;a rightward shift of;the firm's labor demand curve.;a leftward shift of;the firm's labor demand curve.;a decrease in labor's;productivity.;63. Consider this quote from an article in the Wall Street;Journal: "The stock of educated workers isn't increasing fast enough to;keep up with rising demand........ Employers are paying the typical four-year;college graduate [without graduate school] 75% more than they pay high-school;grads. Twenty-five years ago, they were paying 40% more. Employers insist on;ever better-educated, skilled workers.;Source: David Wessel, "Lack of Well-Educated Workers;Has Lots of Roots, No Quick Fix", Wall Street Journal, April 19, 2007;Page A2.;Which of the following best explains the rapid increase in;the wage differential between college graduates and high school graduates?;(Points: 1);The demand for;college educated workers shifted to the right while the supply of college;educated workers shifted to the left.;The supply of;high-school educated workers shifted to the right faster than the demand for;college educated workers shifted to the right.;The demand for;college educated workers shifted to the right faster than the supply of college;educated workers shifted to the right.;The demand for;high-school educated workers shifted to the left faster than the supply of;college educated workers shifted to the right.;64. Economic discrimination takes place when an employer;(Points: 1);pays workers the;lowest wage possible.;pays workers;different wages on the basis of some arbitrary characteristics of workers that;are irrelevant to the job performed.;pays lower wages to;workers who are not as productive as other workers.;pays workers compensating;wage differentials.;65. Suppose a competitive firm is paying a wage of $12 an;hour and sells its product at $3 per unit. Assume that labor is the only input.;If the last worker hired increases output by three units per hour, then to;maximize profits the firm should (Points: 1);not change the number;of workers it currently hires.;lay off some of its;workers.;hire additional;workers.;There is not enough;information to answer the question.;66. Scenario: In academia, professors in some disciplines;receive higher salaries than others. For example, professors teaching in;business schools receive higher salaries than professors in the English;department. Suppose in Unity College, assistant professors in the business;school earn $Wb while assistant professors in the English department earn $We;< Wb. Now suppose the government passes comparable worth legislation that;requires academic institutions to pay all faculty the same salaries.;Following the passage of comparable worth legislation, Unity;College responds by placing salaries at $Wa between the two existing salaries.;Which of the following is the result of the legislation? (Points: 1);The supply of English;professors increase and the supply of business professors decrease.;The demand for;English professors decrease and the demand for business professors increase.;There will be a;surplus in the market for English professors and a shortage in the market for;business professors.;There will be a;surplus in the market for English professors and the market for business;professors will not be affected.;67. Gross domestic product understates the total production;of final goods and services because of the omission of (Points: 1);exports.;inflation.;intermediate goods.;nonmarket household;production.;68. If prices in the economy rise, then (Points: 1);the purchasing power;of a dollar rises.;the purchasing power;of a dollar stays constant.;the purchasing power;of a dollar declines.;the purchasing power;of a dollar cannot be determined.;69.;Table 19-5;Consider the table above showing three stages of production;of an automobile.;Refer to Table 19-5. The value added by the automobile;dealer equals (Points: 1);$7,000.;$15,000.;$18,000.;$25,000.;70. The output of Mexican citizens who work in Texas would;be included in the (Points: 1);gross domestic;product of Mexico.;gross national;product of Mexico.;gross national;product of the United States.;net national product;of the United States.;71. Disposable personal income equals personal income;(Points: 1);minus personal tax;payments.;plus government;transfer payments.;minus personal tax;payments plus government transfer payments.;minus government;transfer payments plus personal tax payments.;72. If net taxes fall by $80 billion, we would expect;(Points: 1);the government;deficit to fall by $80 billion.;household savings to;rise by $80 billion.;household savings to;rise by less than $80 billion.;household savings to;fall by more than $80 billion.;73.;Scenario 21-1;Consider the following data for a closed economy;Refer to Scenario 21-1. Based on the information above, what;is the level of private saving in the economy? (Points: 1);$3 trillion;$4 trillion;$5 trillion;$8 trillion;74. Which of the following explains the causes of the;changes in the unemployment rate at the end of a recession? (Points: 1);Firms are hesitant to;rehire laid off workers as they continue to operate below capacity.;Firms rapidly hire;new workers at the first sign of on an increase in demand for their goods.;Discouraged workers;return to the labor force and this makes the unemployment rate fall.;Discouraged workers;leave the labor force and this makes the unemployment rate rise.;75. If the economy enters into a recession, the equilibrium;quantity of loanable funds should ________ and the real interest rate should;________. (Points: 1);fall, rise;fall, fall;rise, fall;rise, rise;76. Since 1990, real GDP per capita has ________ and this;measure ________ the actual growth in standards of living in the U.S. over this;time. (Points: 1);increased;understates;increased, overstates;decreased;understates;decreased, overstates;77. Purchases of which of the following goods would be;dramatically reduced during a recession? (Points: 1);tomatoes;ink pens;gasoline;refrigerators;78. Suppose that homemakers are included as employed in the;labor force statistics, rather than being counted as out of the labor force.;This would (Points: 1);increase the measured;unemployment rate.;increase the measured;labor force participation rate.;decrease the number;of persons in the labor force.;decrease the number;of persons in the working-age population.;79. Which of the following would decrease the unemployment;rate? (Points: 1);an increase in the;minimum wage;an increase in the efficiency;wage;an increase in labor;union membership;government aid to;retrain unemployed workers;80. The labor force equals the number of people (Points: 1);employed.;unemployed.;employed plus;unemployed.;in the working-age;population.;81. Globalization refers to (Points: 1);the process of;establishing a common world currency.;the willingness of;individuals within a given country to share knowledge with one another.;the process of;countries becoming more open to foreign trade and investment.;the reduction in;growth rates of real GDP per capita as a result of trade with foreign;countries.;82. The industrialized group of countries has growth rates;that are consistent with the findings of the economic growth model. That is;Ireland and Japan had ________ incomes in 1960 than the U.S. and Switzerland;and Ireland and Japan grew ________ than the U.S. and Switzerland between 1960;and 2004. (Points: 1);lower, more rapidly;greater, less rapidly;lower, less rapidly;greater, more rapidly;83. Productivity gains in the United States since 1995 have;been ________ productivity gains in other leading industrial nations. (Points;1);the same as;lower than;higher than;more variable than;84. Significant economic growth did not begin in the world;until (Points: 1);1000 A.D.;1750 A.D.;1820 A.D.;the 20th century A.D.;85. Co


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