Online Answer

Temple University

Department of Economics

Economics 403

Economic Analysis

Name___________________________________

Directions: You must complete the entire exam. Your answers should be your own work; you may neither give nor receive help. This is a closed book exam. You may have 3 hours to complete the exam.

Part I. Multiple Choice (35 points)

1. Because population grows over time, the best indicator of average living standards is:

A) the unemployment rate.

B) total output.

C) output per person.

D) the inflation rate.

E) productivity.

2. The value of output was $1,000 billion in Northland and $2,000 billion in Southland. The population of Northland was 50 million and the population of Southland was 120 million. There were 30 million employed workers in Northland and 75 million employed workers in Southland. Average labor productivity was higher in _________ and the standard of living was _______.

A) Northland; the same in both countries

B) Northland; higher in Northland

C) Southland; higher in Northland

D) Southland; higher in Southland

E) Southland; the same in both countries

3. Gross domestic product (GDP) equals the ______ of final _______ produced within a country during a given period of time.

A) market value; goods

B) market value; services

C) market value; goods and services

D) quantity; goods

E) quantity; goods and services

4. If an automobile manufacturer pays $200 for a car windshield, $400 for four car tires, $100 for a car CD player, and sells cars made with these parts for $20,000, then each car the automobile manufacturer sells contributes how much to GDP?

A) $19,300

B) $20,000

C) $20,200

D) $20,400

E) $20,700

5. Suppose that the total expenditures for a typical household in 1995 equaled $5,500 per month, while the cost of purchasing exactly the same items in 2000 was $6,875. If 1995 is the base year,...