Please answer all multiple choice questions

1. Which of the following is the BEST way to define "Say's Law?" (a) supply creates its own demand; (b) continue to add capital until the marginal product of capital is zero; (c) equilibrium takes place at the intersection of a supply curve and a demand curve; (d) the act of producing output in a closed economy generates enough income to buy back all of the output produced.

1. Which of the following diagrams best shows the interconnectedness of sectors, the flow of real spending as well as financial flows, and factors of production? (a) supply and demand; (b) circular flow; (c) the Solow Model; (d) the deGrom Slider.

1. If real GDP grew at an annual rate of 2 percent and nominal GDP grew at an annual rate of 5 percent, then the annualized growth of the GDP deflator likely was: (a) indeterminant with this information; (b) 7 percent; (c) 3 percent; (d) 10 percent.

1. Suppose the Federal Reserve's Index of Industrial Production increases from 147.5 to 148.9 between August and September. On an annualized basis, the Federal Reserve will report that: (a) industrial production increased by 12.0%; (b) industrial production increased by 12.1%; (c) industrial production increased by fractionally less than 12%; (d) industrial production increased by 3.8%.

1. First-time sales of newly constructed houses get counted in the GDP as: (a) personal consumption expenditures on durable goods; (b) personal consumption expenditures on services; (c) a financial asset; (d) gross private domestic investment.

1. The sustainable, or potential, growth rate of an economy can be measured broadly as: (a) growth in real GDP plus growth in net exports; (b) growth in total factor productivity; (c) growth in total factor productivity plus growth in the labor force; (d) growth in the capital stock plus growth in the labor force.

1. Suppose the constant dollar GDP is $25.0 trillion and the implicit GDP deflator during the same quarter is 120.0. Current dollar GDP in that quarter would be: (a) $30 trillion; (b) $3,000 trillion; (c) $20 trillion; (d) indeterminant from the data provided.

1. Which of the following is generally NOT considered a benefit of real economic growth? (a) growth results indirectly in better health, on average, among the country's residents; (b) it guarantees a better distribution of incomes across income classes; (c) incomes tend to increase; (d) more goods and services become available to the country's residents.

1. Roughly what percentage of GDP is comprised of personal consumption expenditures? (a) 20%; (b) 37%; (c) 52%; (d) 68%.

1. U.S. net exports have been negative for about four decades. These data suggest that: (a) net exports reduce U.S. GDP and are a sign of U.S. economic weakness relative to U.S. trading partners; (b) net exports reduce U.S. GDP and are a sign of relative strength of U.S. import markets relative to U.S. export markets; (c) net exports diminish the total volume of trade between the U.S. and U.S. trading partners; (d) goods made outside the U.S. are uniformly superior to those produced in the United States.

1. Components of GDP that disproportionately affect, and are disproportionately affected by, changes in real economic activity are called: (a) industrials; (b) cyclically sensitive; (c) elastic with respect to personal income; (d) heteroskedastic.

1. Over time, the share of national income accruing to labor and away from capital has: (a) increased; (b) remained broadly constant; (c) decreased; (d) increased at an increasing rate.

1. After accounting for seasonality, trend and irregularity in data, the remaining movement of data most likely is due to: (a) heteroskedasticity; (b) autocorrelation; (c) cyclicality; (d) random fluctuation.

1. An analyst assumes that a pattern in data observed over a very extended period of time will continue well into the future. This analyst commits the error of logic known as: (a) extrapolation; (b) anchoring; (c) data mining; (d) post hoc, ergo procter hoc.

1. Why aren't transfer payments included in calculations of GDP? (a) transfer payments are not included in the federal budget, so they cannot be included; (b) transfer payments are not income to recipients derived from the production of new goods and services; (c) transfer payments require recipients to provide services to the federal government; (d) only states make transfer payments.

1. China and India tend to have higher sustained growth in real GDP than most developed market countries, because: (a) China and India have relatively more rapid population growth; (b) China's and India's growth rates are measured off a smaller base than those of developed economies; (c) China and India have made rapid real economic growth a top national priority; (d) all of the above.

1. Data growing rapidly over a very long time period are plotted over time and the chart looks roughly parabolic. The analyst converts the data to logarithmic and, relative to the first plot, the logarithmic plot: (a) adds multicollinearity to econometric estimations; (b) shows more volatility within the data; (c) is flatter; (d) requires that both the horizontal and the vertical axes show data logarithmically.

1. Which of the following often is not considered a cost of economic growth? (a) environmental problems; (b) income inequality across and within countries; (c) loss of certain types of jobs even as new jobs emerge; (d) undesired and unanticipated deflation.

1. Which of the following is now the largest component of personal consumption expenditures within the National Income and Product Accounts? (a) spending on nondurable goods; (b) spending on services; (c) spending on durable goods; (d) spending on residential structures (housing).

1. Macroeconomists tend to watch sales of automotive vehicles in depth because such sales tend to be: (a) cyclically sensitive; (b) driven by trend, such as the trend in population growth; (c) completed in cash, rather than from credit; (d) reflective of domestic regulatory considerations that drive GDP growth.

1. A production functionexpresses a relationship between output and the factors of production. Which of the following is the best example of a production function? (a) a list of tasks; (b) a recipe; (c) an essay question on an in-class exam; (d) the lyrics of a song.

1. The Solow model suggests all of the following, except: (a) supply creates its own demand;(b) countries that devote a relatively larger share of output to investment will be wealthier; (c) growth will be faster the farther away a country's capital stock is from its steady-state; (d) new ideas are the driving force behind long-run economic growth.

1. A key assumption of the Solow Growth Model is that: (a) the marginal product of capital diminishes as additional units of capital are added; (b) output per capita declines as a nation's capital to labor ratio increases; (c) the marginal product of labor tends to rise as additional units of labor are added; (d) capital tends to depreciate at an increasing rate as a nation's output increases.

1. The level of capital per capita in an economy tends to increase until the marginal product of capital equals: (a) the sustainable growth rate of real GDP; (b) the marginal product of labor; (c) the economy's rate of depreciation; (d) the prevailing wage rate.

1. The Golden Rule rate of saving occurs where the spread, or gap, between which two of the following is greatest? (a) output per capita and depreciation; (b) output per capita and income per capita; (c) saving per capita and investment per capita; (d) output per capita and saving per capita.

1. Capital is said to be in a "steady state" when: (a) investment equals the rate of depreciation; (b) the spread, or gap, between income per capita and investment per capita is minimized; (c) the marginal product of capita equals the marginal product of labor; (d) the economy reaches long-term equilibrium.

1. Which of the following would NOT likely be considered a reason for the long-term slowdown in U.S. productivity gains? (a) aging of the fixed capital stock; (b) record-low interest rates that curtail capital investment; (c) technological advances that reduce the demand for resources and for various outputs; (d) low inflation rates since 2008 consistent with expansionary monetary policy.

1. Which of the following is a standard assumption of most growth models?

1. Key determinants of the quantity of labor and capital, respectively, employed by productive enterprises include: (a) the age of the labor force and the vintage of capital stocks; (b) prevailing wages and the rental cost of financial capital; (c) interest rates and the average P/E ratio of S&P 500 stocks; (d) none of the above.

1. Perhaps the best single explanation for the relative strength of productivity in one country compared with other countries is: (a) the relative quality of the labor forces; (b) the relative quantity of capital; (c) the relative amount of capital per worker; (d) the demographic make-up of the labor force, by age, gender and political preference.

1. All of the following are reasons why some countries are more efficient than others at using capital and labor, except: (a) efficient countries have higher quality and quantity work force education; (b) efficient countries have higher quality management styles; (c) mergers and acquisitions eliminate some of the most productive companies; (d) dissemination and adoption of capital is easier in the most efficient countries.

1. Which of the following does not offer a partial explanation for why developing economies often tend to grow faster than developed economies? (a) growth rates off a relatively smaller base naturally tend to be larger than off a larger base; (b) sometimes, developing economies can infuse the most modern technologies faster than developed economies; (c) developing economies typically have more modern and more advance and tech-savvy educational establishments than developed economies; (d) developing economies often have some more modern infrastructure than developed economies.

1. Total factor productivity tends to be a function of: (a) the quantity and quality of human capital; (b) the quality and quantity of tangible and intangible capital; (c) the availability and cost of credit and the strength of financial markets and institutions; (d) all of the above.

1. Workers whose job loss is attributable mainly to unfavorable business or economic conditions are typically called: (a) U-6 unemployed; (b) frictionally unemployed; (c) part of the marginally attached labor force; (d) cyclically unemployed.

1. Which of the following is NOT generally considered a determinant of the U.S. labor force participation rate? (a) cultural shifts, such as the increased presence of women in the work force; (b) persistent seasonal unemployment of labor; (c) persistent structural unemployment; (d) demographics, such as the aging of the labor force.

1. The U-3 unemployment rates measures the share of the labor force: (a) that is out of work; (b) that is out of working and seeking employment actively; (c) that is out of work, but may be employed part-time; (d) that is too discouraged to seek employment.

1. Over the course of the past half century, which statement about U.S. labor unions is MOST true? (a) emphasis in union negotiations with management have focused less on benefits and working conditions and more on wage levels; (b) government employees constitute larger and larger shares of union membership; (c) overall union membership generally has increased, especially in industrial unions; (d) union membership tends to increase as service-sector employment rises relative to manufacturing sector employment.

1. Structurally unemployed persons typically cannot find work because: (a) they lack the skill set required by potential employers; (b) they have a solid skill set, but cannot go to where open jobs exist; (c) they have physical, emotional or educational handicaps they undermine their hiring prospects; (d) all of the above.

1. The "natural rate of unemployment" measures the share of the labor force that is: (a) frictionally plus structurally unemployed; (b) unlikely to ever find gainful employment; (c) out of work and seeking employment, plus individuals working part-time but seeking full-time employment; (d) frictionally plus cyclically unemployed.

1. Each month, the Bureau of Labor Statistics reports data on the labor market situation during the prior month. These data are collected: (a) from two surveys, a household survey and an establishment survey; (b) from reports on initial claims for unemployment insurance issued by the individual states; (c) from data filings to the U.S. Department of Labor required under the Employment Act of 1946; (d) from 50% of U.S. households and businesses in response to questionnaires sent through the mail.

1. A doctor in the Dominican Republic migrates to the United States is denied the opportunity to practice medicine immediately. The doctor takes a job as an adjunct lecturer at Brooklyn College until qualifying to practice in New York State. While working at Brooklyn College, the doctor is: (a) considered a discouraged worker; (b) counted among the under-employed; (c) not considered part of the labor force; (d) eligible to collect New York State unemployment compensation.

1. Research over many decades concludes that increases in the statutory minimum wage: (a) causes job losses, especially among small businesses; (b) results in job gains in the overall economy; (c) causes job losses, especially among small businesses, but results in job gains in the overall economy; (d) result in declines in the labor force participation rate.

1. John Maynard Keynes was among the very first economists to write extensively about "wage rigidity, " which refers to: (a) failure of market wages to adjust to exogenous shocks to the economy; (b) the tendency for wages to fall when economic conditions weaken, but not to rise much when the economy strengthens; (c) the relative infrequency of statutory minimum wage increases; (d) the inflexibility of labor unions when issuing wage demands.

1. A shrinking gap between the expected lifetime productivity of college graduates when compared to non-college graduates can be referred to as a shrinking: (a) marginal product of non-college educated workers; (b) productivity premium; (c) the natural, or expected, result of much improved high school education; (d) none of the above.

1. By multiplying average length of the workweek by average hourly wages, analysts derive a relatively strong measure of: (a) average weekly wages; (b) total worker compensation; (c) worker productivity; (d) a lagging indicator of unemployment rates.

Your 15 year-old brother asked you the following question: "How strong right now is the U.S. economy?" In an essay, please provide an answer to your brother's question. The key to your answer should come from your reference to, and your analysis of, the most appropriate economic data.