Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. Balance of payments; 2. depreciation; 3. balance of 1. Balance of payments; 2. depreciation; 3. balance of

payments on the current account (the current account); 4. payments on the current account (the current account); 4. sustainable;sustainable;_____describes continued _____describes continued long-run economic growthlong-run economic growth in the in the face of the limited supply of natural resources and the impact face of the limited supply of natural resources and the impact of growth on the environment.of growth on the environment.

_____decrease in value due to wear and tear, decay, decline in _____decrease in value due to wear and tear, decay, decline in price, etc. price, etc.

_____a country’s balance of payments on goods and services _____a country’s balance of payments on goods and services plus net international transfer payments and factor income.plus net international transfer payments and factor income.

_____a summary of a country’s transactions with other _____a summary of a country’s transactions with other countries, including two main elements: the countries, including two main elements: the balance of balance of payments on the current accountpayments on the current account and the and the balance of balance of payments on the financial accountpayments on the financial account..

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. Balance of payments; 2. depreciation; 3. balance of 1. Balance of payments; 2. depreciation; 3. balance of

payments on the current account (the current account); 4. payments on the current account (the current account); 4. sustainable;sustainable;____44__describes continued __describes continued long-run economic growthlong-run economic growth in the in the face of the limited supply of natural resources and the face of the limited supply of natural resources and the impact of growth on the environment.impact of growth on the environment.

____22__decrease in value due to wear and tear, decay, decline __decrease in value due to wear and tear, decay, decline in price, etc. in price, etc.

____33__a country’s balance of payments on goods and services __a country’s balance of payments on goods and services plus net international transfer payments and factor income.plus net international transfer payments and factor income.

____11__a summary of a country’s transactions with other __a summary of a country’s transactions with other countries, including two main elements: the countries, including two main elements: the balance of balance of payments on the current accountpayments on the current account and the and the balance of balance of payments on the financial accountpayments on the financial account..

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1.1. Rule of 70; 2. devaluation; 3. labor productivity Rule of 70; 2. devaluation; 3. labor productivity

(productivity); 4. revaluation(productivity); 4. revaluation;

_____an increase in the value of a currency that is set under a _____an increase in the value of a currency that is set under a fixed exchange rate regimefixed exchange rate regime. .

_____a mathematical formula that states that the time it takes _____a mathematical formula that states that the time it takes real GDPreal GDP per capita, or any other variable that grows per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by gradually over time, to double is approximately 70 divided by that variable’s annual growth rate.that variable’s annual growth rate.

_____output per worker._____output per worker.

_____a reduction in the value of a currency that is set under a _____a reduction in the value of a currency that is set under a fixed exchange rate regimefixed exchange rate regime..

_____an increase in the value of a currency that is set under a _____an increase in the value of a currency that is set under a fixed exchange rate regimefixed exchange rate regime. .

_____a mathematical formula that states that the time it takes _____a mathematical formula that states that the time it takes real GDPreal GDP per capita, or any other variable that grows per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by gradually over time, to double is approximately 70 divided by that variable’s annual growth rate.that variable’s annual growth rate.

_____output per worker._____output per worker.

_____a reduction in the value of a currency that is set under a _____a reduction in the value of a currency that is set under a fixed exchange rate regimefixed exchange rate regime..

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1.1. Rule of 70; 2. devaluation; 3. labor productivity Rule of 70; 2. devaluation; 3. labor productivity

(productivity); 4. revaluation(productivity); 4. revaluation;

____44__an increase in the value of a currency that is set under a __an increase in the value of a currency that is set under a fixed exchange rate regimefixed exchange rate regime. .

____11__a mathematical formula that states that the time it takes __a mathematical formula that states that the time it takes real GDPreal GDP per capita, or any other variable that grows per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by gradually over time, to double is approximately 70 divided by that variable’s annual growth rate.that variable’s annual growth rate.

____33__output per worker.__output per worker.

____22__a reduction in the value of a currency that is set under a __a reduction in the value of a currency that is set under a fixed exchange rate regimefixed exchange rate regime..

____44__an increase in the value of a currency that is set under a __an increase in the value of a currency that is set under a fixed exchange rate regimefixed exchange rate regime. .

____11__a mathematical formula that states that the time it takes __a mathematical formula that states that the time it takes real GDPreal GDP per capita, or any other variable that grows per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by gradually over time, to double is approximately 70 divided by that variable’s annual growth rate.that variable’s annual growth rate.

____33__output per worker.__output per worker.

____22__a reduction in the value of a currency that is set under a __a reduction in the value of a currency that is set under a fixed exchange rate regimefixed exchange rate regime..

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. infrastructure; 2. physical capital; 3. foreign exchange 1. infrastructure; 2. physical capital; 3. foreign exchange

reserves; 4. human capital; reserves; 4. human capital;

_____stocks of foreign currency that governments can use to _____stocks of foreign currency that governments can use to buy their own currency on the foreign exchange market.buy their own currency on the foreign exchange market.

__________items items such as roads, power lines, ports, information such as roads, power lines, ports, information networks, and other parts of an networks, and other parts of an economyeconomy, that provides the , that provides the underpinnings, or foundation, for economic activity. underpinnings, or foundation, for economic activity.

_____human made goods such as buildings and machines used _____human made goods such as buildings and machines used to produce other goods and services.to produce other goods and services.

_____the improvement in labor created by the education and _____the improvement in labor created by the education and knowledge embodied in the workforce.knowledge embodied in the workforce.

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. infrastructure; 2. physical capital; 3. foreign exchange 1. infrastructure; 2. physical capital; 3. foreign exchange

reserves; 4. human capital; reserves; 4. human capital;

____33__stocks of foreign currency that governments can use to __stocks of foreign currency that governments can use to buy their own currency on the foreign exchange market.buy their own currency on the foreign exchange market.

____11____items items such as roads, power lines, ports, information such as roads, power lines, ports, information networks, and other parts of an networks, and other parts of an economyeconomy, that provides the , that provides the underpinnings, or foundation, for economic activity. underpinnings, or foundation, for economic activity.

____22__human made goods such as buildings and machines used __human made goods such as buildings and machines used to produce other goods and services.to produce other goods and services.

____44__the improvement in labor created by the education and __the improvement in labor created by the education and knowledge embodied in the workforce.knowledge embodied in the workforce.

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. technology; 2. research and development; 3. balance of 1. technology; 2. research and development; 3. balance of

payments on goods and services; 4. merchandise trade payments on goods and services; 4. merchandise trade balance (trade balance)balance (trade balance)

_____the technical means for the production of goods _____the technical means for the production of goods and services.and services.

_____spending to create and implement new _____spending to create and implement new technologies.technologies.

_____the difference between the value of _____the difference between the value of exportsexports and the and the value of value of importsimports during a given period. during a given period.

_____the difference between a country’s exports and _____the difference between a country’s exports and imports of goods alone—not including servicesimports of goods alone—not including services

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. technology; 2. research and development; 3. balance of 1. technology; 2. research and development; 3. balance of

payments on goods and services; 4. merchandise trade payments on goods and services; 4. merchandise trade balance (trade balance)balance (trade balance)

____11__the technical means for the production of goods __the technical means for the production of goods and services.and services.

____22__spending to create and implement new __spending to create and implement new technologies.technologies.

____33__the difference between the value of __the difference between the value of exportsexports and and the value of the value of importsimports during a given period. during a given period.

____44__the difference between a country’s exports and __the difference between a country’s exports and imports of goods alone—not including servicesimports of goods alone—not including services

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview

1. Convergence hypothesis; 2. aggregate production 1. Convergence hypothesis; 2. aggregate production function; 3. exchange market intervention; 4. floating function; 3. exchange market intervention; 4. floating exchange rate;exchange rate;_____government purchases or sales of currency in the _____government purchases or sales of currency in the foreign foreign exchange marketexchange market. .

_____an _____an exchange rate regimeexchange rate regime in which the government lets in which the government lets the the exchange rateexchange rate go wherever the market takes it. go wherever the market takes it.

_____a hypothetical function that shows how productivity (_____a hypothetical function that shows how productivity (real real GDPGDP per worker) depends on the quantities of per worker) depends on the quantities of physical capitalphysical capital per worker and per worker and human capitalhuman capital per worker as well as the state per worker as well as the state of technology.of technology.

_____a theory of economic growth that holds that international _____a theory of economic growth that holds that international differences in differences in real GDPreal GDP per capita tend to narrow over time per capita tend to narrow over time because countries with low because countries with low GDP per capitaGDP per capita generally have generally have higher growth rates.higher growth rates.

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. Convergence hypothesis; 2. aggregate production 1. Convergence hypothesis; 2. aggregate production

function; 3. exchange market intervention; 4. floating function; 3. exchange market intervention; 4. floating exchange rate;exchange rate;____33__government purchases or sales of currency in the __government purchases or sales of currency in the foreign foreign exchange marketexchange market. .

____44__an __an exchange rate regimeexchange rate regime in which the government lets in which the government lets the the exchange rateexchange rate go wherever the market takes it. go wherever the market takes it.

____22__a hypothetical function that shows how productivity (__a hypothetical function that shows how productivity (real real GDPGDP per worker) depends on the quantities of per worker) depends on the quantities of physical capitalphysical capital per worker and per worker and human capitalhuman capital per worker as well as the state per worker as well as the state of technology.of technology.

____11__a theory of economic growth that holds that __a theory of economic growth that holds that international differences in international differences in real GDPreal GDP per capita tend to per capita tend to narrow over time because countries with low narrow over time because countries with low GDP per capitaGDP per capita generally have higher growth rates.generally have higher growth rates.

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview

1. Total factor productivity; 2. fixed exchange rate; 3. 1. Total factor productivity; 2. fixed exchange rate; 3. exchange rate regime; 4. growth accounting;exchange rate regime; 4. growth accounting;

_____estimates the contribution of each of the major factors _____estimates the contribution of each of the major factors (physical and human capital, labor, and technology) in the (physical and human capital, labor, and technology) in the aggregate production functionaggregate production function..

_____the amount of output that can be produced with a given _____the amount of output that can be produced with a given amount of factor inputs.amount of factor inputs.

_____an _____an exchange rate regimeexchange rate regime in which the government keeps in which the government keeps the the exchange rateexchange rate against some other currency at or near a against some other currency at or near a particular target.particular target.

_____a rule governing policy toward the _____a rule governing policy toward the exchange rateexchange rate. .

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview

1. Total factor productivity; 2. fixed exchange rate; 3. 1. Total factor productivity; 2. fixed exchange rate; 3. exchange rate regime; 4. growth accounting;exchange rate regime; 4. growth accounting;

____44__estimates the contribution of each of the major factors __estimates the contribution of each of the major factors (physical and human capital, labor, and technology) in the (physical and human capital, labor, and technology) in the aggregate production functionaggregate production function..

____11__the amount of output that can be produced with a given __the amount of output that can be produced with a given amount of factor inputs.amount of factor inputs.

____22__an __an exchange rate exchange rate in which the government keeps the in which the government keeps the exchange rateexchange rate against some other currency at or near a against some other currency at or near a particular target.particular target.

____33__a rule governing policy toward the __a rule governing policy toward the exchange rateexchange rate. .

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. Balance of payments on the financial account (the financial 1. Balance of payments on the financial account (the financial

account); 2. exchange rates; 3. appreciates; 4. equilibrium account); 2. exchange rates; 3. appreciates; 4. equilibrium exchange rateexchange rate

_____the _____the exchange rateexchange rate at which the quantity of a currency at which the quantity of a currency demanded in the demanded in the foreign exchange marketforeign exchange market is equal to the is equal to the quantity supplied.quantity supplied.

_____the difference between a country’s sales of assets to _____the difference between a country’s sales of assets to foreigners and its purchases of assets from foreigners during foreigners and its purchases of assets from foreigners during a given period.a given period.

_____to increase in value _____to increase in value

_____the price at which currencies trade, determined by the _____the price at which currencies trade, determined by the foreign exchange marketforeign exchange market. .

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. Balance of payments on the financial account (the financial 1. Balance of payments on the financial account (the financial

account); 2. exchange rates; 3. appreciates; 4. equilibrium account); 2. exchange rates; 3. appreciates; 4. equilibrium exchange rateexchange rate

____44__the __the exchange rateexchange rate at which the quantity of a currency at which the quantity of a currency demanded in the demanded in the foreign exchange marketforeign exchange market is equal to the is equal to the quantity supplied.quantity supplied.

____11__the difference between a country’s sales of assets to __the difference between a country’s sales of assets to foreigners and its purchases of assets from foreigners during foreigners and its purchases of assets from foreigners during a given period.a given period.

____33__to increase in value __to increase in value

____22__the price at which currencies trade, determined by the __the price at which currencies trade, determined by the foreign exchange marketforeign exchange market. .

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. Diminishing returns to physical capital; 2. depreciates; 3. 1. Diminishing returns to physical capital; 2. depreciates; 3.

real exchange rate; 4. purchasing power parity;real exchange rate; 4. purchasing power parity;

_____in an _____in an aggregate production functionaggregate production function when the amount of when the amount of human capitalhuman capital per worker and the state of technology are per worker and the state of technology are held fixed, each successive increase in the amount of held fixed, each successive increase in the amount of physical capitalphysical capital per worker leads to a smaller increase in per worker leads to a smaller increase in productivity.productivity.

_____(between two countries’ currencies) the nominal _____(between two countries’ currencies) the nominal exchange rate at which a given basket of goods and services exchange rate at which a given basket of goods and services would cost the same amount in each country.would cost the same amount in each country.

_____the exchange rate adjusted for international differences _____the exchange rate adjusted for international differences in aggregate price levels.in aggregate price levels.

_____to reduce the purchasing value of (money). _____to reduce the purchasing value of (money).

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview1. Diminishing returns to physical capital; 2. depreciates; 3. 1. Diminishing returns to physical capital; 2. depreciates; 3.

real exchange rate; 4. purchasing power parity;real exchange rate; 4. purchasing power parity;

____11__in an __in an aggregate production functionaggregate production function when the amount of when the amount of human capitalhuman capital per worker and the state of technology are per worker and the state of technology are held fixed, each successive increase in the amount of held fixed, each successive increase in the amount of physical capitalphysical capital per worker leads to a smaller increase in per worker leads to a smaller increase in productivity.productivity.

____44__(between two countries’ currencies) the nominal __(between two countries’ currencies) the nominal exchange rate at which a given basket of goods and services exchange rate at which a given basket of goods and services would cost the same amount in each country.would cost the same amount in each country.

____33___the exchange rate adjusted for international ___the exchange rate adjusted for international differences in aggregate price levels.differences in aggregate price levels.

____22__to reduce the purchasing value of (money). __to reduce the purchasing value of (money).

Mr. Weiss

Test 6 – Sections 7 & 8 – Vocabulary Test 6 – Sections 7 & 8 – Vocabulary ReviewReview