To correct for inflation, GDP numbers must be converted using the price level

1) To correct for inflation, GDP numbers must be converted using the price level in a given year known as the




Base year


Real year


Current year


Constant year


Inflation year


2) A production possibilities curve represents all of an economy's combinations for production that are






Possible and Efficient








Question 3


Which of the following is a technique used to determine the optimal level of an economic activity?




Cost/benefit analysis


Production possibilities curve analysis


GDP analysis


Opportunity cost analysis


Question 4


The bow shape of the production possibilities curve reflects




The opportunity cost concept


The concept of increasing opportunity costs


The concept of diminishing marginal returns


The marginal social cost/marginal social benefit principle


Question 5


Real per capita GDP is defined as




Population/real GDP




Real GDP/price index


Real GDP/population


Price index/GDP


Question 6


Marginal social cost refers to the




Cost incurred due to an action undertaken by society


Total expenditures by society on a good like a public park


Cost borne by society when 1 more unit of a good is produced


Cost to society of sub-standard production


Cost to society when an additional unit of a social good is produced


Question 7


If population in a country falls while GDP stays the same, the country's




Real GDP falls


Real GDP rises


Per capita GDP rises


Per capita GDP falls


Welfare falls


Question 8


With private property rights, the decision about how to use resources are made by




The government


Private firms


Individual resource owners


Resource committees


Question 9


The know-how and the means and methods of production available in an economy are known as








Human capital






Question 10


The purpose of a base year when constructing a price index is:



Showing how the output values rise from year to year


Encourage inflation


Providing a means to compare the economy's output across different time periods


To show why expenditures on government goods and services need to increase


Indicate the progress in keeping prices low


Question 11


Economic reasoning would not be necessary if


Our wants were limited


Resources were expansive


Scarcity were decreased


We could have everything we wanted


Politicians were better at running the economy




Question 12


The fundamental economic problem involves




Inflation and unemployment


Scarce resources and unlimited wants


Cheap foreign labor


Supply and demand




Question 13


Labor resources include


The equipment workers use to complete their work


Only non-management personnel


Any efforts of a person to produce goods


Only the physical efforts of an economy's people




Question 14


A country can shift out its production possibilities curve by




Improving its technology


Shifting its production from one good to another


Experiencing a population drop


Using its farmland more productively




Question 15


The means for satisfying wants are











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