28. Country A has a GDP-per-capita of $500, and Country B has a GDP-per-capita of $75,000. Which of the following is NOT a plausible reason for Country B's higher GDP-per-capita? (A) Country B has more open and inclusive economic and political institutions. (B) Country B has more natural resource wealth. (C) Country B has lower productivity. (D) Country B has more capital. 29. After lockdowns were declared globally in 2020, the price of oil crashed from $64 per barrel in January to $18 per barrel in April. What is the most likely reason that lockdowns contributed to the oil price crash? (A) Supply increased due to oil companies reallocating resources to help with the COVID-19 pandemic. (B) Supply decreased due to oil workers being furloughed. (C) Demand increased from factories producing Personal Protective Equipment for essential workers. (D) Demand decreased since fewer people were commuting to work. 30. Suppose that the GDP deflator is 150, and nominal GDP is $7.5 billion. What is the real GDP? (A) $7.5 billion. (B) $5 billion. (C) $500,000. (D) $50 million.
28. Country A has a GDP-per-capita of $500, and Country B has a GDP-per-capita of $75,000. Which of the following is NOT a plausible reason for Country B's higher GDP-per-capita? (A) Country B has more open and inclusive economic and political institutions. (B) Country B has more natural resource wealth. (C) Country B has lower productivity. (D) Country B has more capital. 29. After lockdowns were declared globally in 2020, the price of oil crashed from $64 per barrel in January to $18 per barrel in April. What is the most likely reason that lockdowns contributed to the oil price crash? (A) Supply increased due to oil companies reallocating resources to help with the COVID-19 pandemic. (B) Supply decreased due to oil workers being furloughed. (C) Demand increased from factories producing Personal Protective Equipment for essential workers. (D) Demand decreased since fewer people were commuting to work. 30. Suppose that the GDP deflator is 150, and nominal GDP is $7.5 billion. What is the real GDP? (A) $7.5 billion. (B) $5 billion. (C) $500,000. (D) $50 million.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:28. Country A has a GDP-per-capita of $500, and Country B has a GDP-per-capita
of $75,000. Which of the following is NOT a plausible reason for Country B's higher
GDP-per-capita?
(A) Country B has more open and inclusive economic and political institutions.
(B) Country B has more natural resource wealth.
(C) Country B has lower productivity.
(D) Country B has more capital.
29. After lockdowns were declared globally in 2020, the price of oil crashed from $64
per barrel in January to $18 per barrel in April. What is the most likely reason that
lockdowns contributed to the oil price crash?
(A) Supply increased due to oil companies reallocating resources to help with the
COVID-19 pandemic.
(B) Supply decreased due to oil workers being furloughed.
(C) Demand increased from factories producing Personal Protective Equipment for
essential workers.
(D) Demand decreased since fewer people were commuting to work.
30. Suppose that the GDP deflator is 150, and nominal GDP is $7.5 billion. What is
the real GDP?
(A) $7.5 billion.
(B) $5 billion.
(C) $500,000.
(D) $50 million.
Expert Solution
Step 1
- Exception is “Country B has lower productivity”
Higher GDP per capital denotes higher standards of living and wealth. This can be achieved by open economic policies, higher labor and capital productivity, and natural resources.
- Answer is “Demand decreased since fewer people were commuting to work”
When the lockdowns initiated, the demand for crude oil collapsed as people worked from home and business closed for a shorter period of time. This result in demand for oil to decrease and the demand curve shifts to the left, leading to lower crude prices.
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