Exam 6: Aggregate Incomes

Scenario: Red Country and Purple Country have identical aggregate production functions. The amount of physical capital stock available to each country is equal. Labor supply in Red Country is HR, while the labor supply in Purple Country is HP. -Refer to the scenario above.Population growth is relatively slower in Purple Country than in Red Country,but increased teacher salaries have helped increase high school and college graduation rates.Over time,how will output and total efficiency units of labor likely change in Purple Country?

Scenario: Two neighboring countries, Sweetland and Sourland, are identical in terms of size, population (800,000), education of workforce, and value of natural resources owned. -Refer to the scenario above.Workers in Sweetland are highly unionized.Among other factors,this makes it more difficult for firms in Sweetland to hire and fire workers than it is for firms in Sourland.It is likely that ________.

Why might we want to use the Human Development Index to compare standards of living between countries?

The income per capita was equal in two neighboring countries in a particular year.However,Country 1 had a higher income per worker than Country 2.Which of the following is likely to be true?

Scenario: Farm Country and Industry Country are two neighboring countries. Both countries produce only one good: good X. Production in both countries is a function of total efficiency units of labor and physical capital stock. -Refer to the scenario above.How could research and development (R&D)lead to increases in productivity?

Xenonia has a larger supply of labor than does Inventia.If the labor supply in both countries increases by the same amount while their physical capital stocks remain unchanged,________.

Which of the following should be used to compare the incomes of countries with equal populations but different unemployment rates?

The currency used in Spain is the euro,and the currency used in the U.S.is the dollar.Which of the following will lead to a decrease in the value of Spain's income per capita in dollars?

Scenario: Tree Country has a population of 18,000 people, of whom two-thirds are part of the workforce. The country's only asset is wood, where K = 18,000. The country only produces wooden furniture. In the figure below, Y stands for GDP, and H equals efficiency units of labor. -Refer to the scenario above.Which of the following is likely to reduce the total efficiency units of labor in Tree Country?

The aggregate production function shows a(n)________ relationship between ________ and output.

What role does research and development (R&D)play in increasing productivity?

The income per capita in Baltonia is 64,163 in Baltonian currency.If the price of a basket of goods worth $1 in the United States is 5.50 units of Baltonian currency,Baltonia's income per capita in PPP is ________.

Scenario: Two Countries, X and Y, have identical production functions. Country X's GDP is about 8,000,000 and Country Y's GDP is about 3,000,000. Additionally, technology factors are AX = 3 and AY = 10 for country X and Y, respectively. There are 125 workers in Country A and 200 workers in Country B. -Refer to the scenario above.Computing a hypothetical GDP per capita for Country Y allows us to ________.

Income per capita is gross domestic product (GDP)divided by ________.

The following table shows economic data for two countries. -Refer to the table above.During the next 2 years,GDP per capita remains constant in Country A.Population and GDP do not remain constant.Under which of the following growth rate scenarios is this possible?

The GDPs of Country X and Country Y were found to be equal in a particular year.However,the income per capita in Country X was higher than the income per capita in Country Y.This implies that ________.

The main reason income per capita and income per worker vary across countries is because ________.

The population of Potentia doubled in 20 years,while its income per capita remained unchanged during the same period of time.This implies that ________.

The following table shows economic data for two countries. -Refer to the table above.If the minimum wage increases from 10 rupee per hour to 15 rupee per hour in Country A and the retirement age in Country B decreases from 65 years to 60 years,all else equal,then ________.

The productivity of workers in an economy will be high if the economy has ________.