Econ 20b Sample Midterm

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1. A nation's standard of living is best measured by its
a.| real GDP.|
b.| real GDP per person.|
c.| nominal GDP.|
d.| nominal GDP per person.|

2. Productivity is defined as the quantity of
a.| labor required to produce a nation’s GDP.|
b.| labor required to produce one unit of goods and services.| c.| goods and services produced from each unit of labor input.| d.| goods and services produced per unit of time.|

3. The equipment and structures available to produce goods and services are called a.| physical capital.|
b.| human capital.|
c.| the production function.|
d.| technology.|
4. Human capital is the
a.| knowledge and skills that workers acquire through education, training, and experience.| b.| stock of equipment and structures that is used to produce goods and services.| c.| total number of hours worked in an economy.|

d.| same thing as technological knowledge.|

5. The CPI is more commonly used as a gauge of inflation than the GDP deflator is because a.| the CPI is easier to measure.|
b.| the CPI is calculated more often than the GDP deflator is.| c.| the CPI better reflects the goods and services bought by consumers.| d.| the GDP deflator cannot be used to gauge inflation.|

6. If 2002 is the base year, then the inflation rate in 2005 equals a.| |
b.| |
c.| |
d.| |
7. If the price of a Blu-Ray Disc player is three times the price of an MP3 player, then a Blue-Ray Disc player contributes a.| more than three times as much to GDP as does a MP3 player.| b.| less than three times as much to GDP as does a MP3 player.| c.| exactly three times as much to GDP as does a MP3 player.| d.| None of the above is necessarily correct.|

8. A farmer sells $50,000 of apples to individuals who take them home to eat and $75,000 of apples to a company that uses them all to produce cider. How much of the farmer’s sales will be included as apples in GDP?...
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