Economics Worksheet: GDP, Productivity, and Economic Indicators

The primary determinant of a country's standard of living is

• the country's ability to prevail over foreign competition.

• the country's ability to produce goods and services.

• the total supply of money in the economy.

• the average age of the country's labor force.

Long-run growth in GDP and productivity is determined by

• physical and human capital, natural resources, and technology.

• technology, investment, and consumption.

• consumption, investment, and government expenditures.

• capital, natural resources, and government expenditures.

Which of the following policies would reduce frictional unemployment?

• abolition of a job retraining program

• implementing an unemployment insurance policy

• building an online job database that helps workers find jobs

• a decrease in the minimum wage

The CPI differs from the GDP deflator in that

• the CPI is a price index, while the GDP deflator is an inflation index.

• substitution bias is not a problem with the CPI, but it is a problem with the GDP deflator.

• increases in the prices of foreign produced goods that are sold to U.S. consumers show up in the CPI but not in the GDP deflator.

• increases in the prices of domestically produced goods that are sold to the U.S. government show up in the CPI but not in the GDP deflator.

Frictional unemployment is the result of

• The search process of matching workers with jobs.

• A slowdown in the economy.

• A persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.

• The ups and downs in inflation.

GDP is NOT a perfect measure of well-being because

• GDP is adjusted for changes in crime rates.

• GDP is not adjusted for pollution.

• GDP is adjusted for increases in drug addiction.

• the value of leisure is included in GDP.

Countries with high rates of economic growth tend to have

• longer workweeks.

• a labor force that is more productive.

• declining political stability.

• a lower life expectancy at birth.

A transfer payment is a payment made by

• consumers, but not in exchange for a tangible product.

• firms, but not in exchange for capital equipment.

• foreigners, but not in exchange for a domestically produced good or service.

• government, but not in exchange for a currently produced good or service.

Which of the following increases productivity?

• an increase in aggregate hours of work

• inventions of new machinery, equipment, or software

• a decline in health of the population

• decreases in the availability of computers and factory buildings

If some people who have been looking for a job feel despaired and give up looking,

• the unemployment rate will be higher

• the unemployment rate will not change

• the unemployment rate will be lower because of the exclusion of discouraged workers

• the labor force will be bigger