2. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Balance of payments; 2. depreciation; 3. balance of payments on the current account (the current account); 4. sustainable; _____describes continued long-run economic growth in the face of the limited supply of natural resources and the impact of growth on the environment. _____decrease in value due to wear and tear, decay, decline in price, etc. _____a country’s balance of payments on goods and services plus net international transfer payments and factor income. _____a summary of a country’s transactions with other countries, including two main elements: the balance of payments on the current account and the balance of payments on the financial account.

3. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Balance of payments; 2. depreciation; 3. balance of payments on the current account (the current account); 4. sustainable; __4__describes continued long-run economic growth in the face of the limited supply of natural resources and the impact of growth on the environment. __2__decrease in value due to wear and tear, decay, decline in price, etc. __3__a country’s balance of payments on goods and services plus net international transfer payments and factor income. __1__a summary of a country’s transactions with other countries, including two main elements: the balance of payments on the current account and the balance of payments on the financial account.

4. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1.Rule of 70; 2. devaluation; 3. labor productivity (productivity); 4. revaluation 1.Rule of 70; 2. devaluation; 3. labor productivity (productivity); 4. revaluation ; _____an increase in the value of a currency that is set under a fixed exchange rate regime. _____a mathematical formula that states that the time it takes real GDP per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by that variable’s annual growth rate. _____output per worker. _____a reduction in the value of a currency that is set under a fixed exchange rate regime. _____an increase in the value of a currency that is set under a fixed exchange rate regime. _____a mathematical formula that states that the time it takes real GDP per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by that variable’s annual growth rate. _____output per worker. _____a reduction in the value of a currency that is set under a fixed exchange rate regime.

5. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1.Rule of 70; 2. devaluation; 3. labor productivity (productivity); 4. revaluation 1.Rule of 70; 2. devaluation; 3. labor productivity (productivity); 4. revaluation ; __4__an increase in the value of a currency that is set under a fixed exchange rate regime. __1__a mathematical formula that states that the time it takes real GDP per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by that variable’s annual growth rate. __3__output per worker. __2__a reduction in the value of a currency that is set under a fixed exchange rate regime. __4__an increase in the value of a currency that is set under a fixed exchange rate regime. __1__a mathematical formula that states that the time it takes real GDP per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by that variable’s annual growth rate. __3__output per worker. __2__a reduction in the value of a currency that is set under a fixed exchange rate regime.

6. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. infrastructure; 2. physical capital; 3. foreign exchange reserves; 4. human capital; _____stocks of foreign currency that governments can use to buy their own currency on the foreign exchange market. _____items such as roads, power lines, ports, information networks, and other parts of an economy, that provides the underpinnings, or foundation, for economic activity. _____human made goods such as buildings and machines used to produce other goods and services. _____the improvement in labor created by the education and knowledge embodied in the workforce.

7. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. infrastructure; 2. physical capital; 3. foreign exchange reserves; 4. human capital; __3__stocks of foreign currency that governments can use to buy their own currency on the foreign exchange market. __1__items such as roads, power lines, ports, information networks, and other parts of an economy, that provides the underpinnings, or foundation, for economic activity. __2__human made goods such as buildings and machines used to produce other goods and services. __4__the improvement in labor created by the education and knowledge embodied in the workforce.

8. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. technology; 2. research and development; 3. balance of payments on goods and services; 4. merchandise trade balance (trade balance) _____the technical means for the production of goods and services. _____spending to create and implement new technologies. _____the difference between the value of exports and the value of imports during a given period. _____the difference between a country’s exports and imports of goods alone—not including services

9. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. technology; 2. research and development; 3. balance of payments on goods and services; 4. merchandise trade balance (trade balance) __1__the technical means for the production of goods and services. __2__spending to create and implement new technologies. __3__the difference between the value of exports and the value of imports during a given period. __4__the difference between a country’s exports and imports of goods alone—not including services

10. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Convergence hypothesis; 2. aggregate production function; 3. exchange market intervention; 4. floating exchange rate; _____government purchases or sales of currency in the foreign exchange market. _____an exchange rate regime in which the government lets the exchange rate go wherever the market takes it. _____a hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology. _____a theory of economic growth that holds that international differences in real GDP per capita tend to narrow over time because countries with low GDP per capita generally have higher growth rates.

11. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Convergence hypothesis; 2. aggregate production function; 3. exchange market intervention; 4. floating exchange rate; __3__government purchases or sales of currency in the foreign exchange market. __4__an exchange rate regime in which the government lets the exchange rate go wherever the market takes it. __2__a hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology. __1__a theory of economic growth that holds that international differences in real GDP per capita tend to narrow over time because countries with low GDP per capita generally have higher growth rates.

12. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Total factor productivity; 2. fixed exchange rate; 3. exchange rate regime; 4. growth accounting; _____estimates the contribution of each of the major factors (physical and human capital, labor, and technology) in the aggregate production function. _____the amount of output that can be produced with a given amount of factor inputs. _____an exchange rate regime in which the government keeps the exchange rate against some other currency at or near a particular target. _____a rule governing policy toward the exchange rate.

13. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Total factor productivity; 2. fixed exchange rate; 3. exchange rate regime; 4. growth accounting; __4__estimates the contribution of each of the major factors (physical and human capital, labor, and technology) in the aggregate production function. __1__the amount of output that can be produced with a given amount of factor inputs. __2__an exchange rate in which the government keeps the exchange rate against some other currency at or near a particular target. __3__a rule governing policy toward the exchange rate.

14. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Balance of payments on the financial account (the financial account); 2. exchange rates; 3. appreciates; 4. equilibrium exchange rate _____the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied. _____the difference between a country’s sales of assets to foreigners and its purchases of assets from foreigners during a given period. _____to increase in value _____the price at which currencies trade, determined by the foreign exchange market. _____the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied. _____the difference between a country’s sales of assets to foreigners and its purchases of assets from foreigners during a given period. _____to increase in value _____the price at which currencies trade, determined by the foreign exchange market.

15. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Balance of payments on the financial account (the financial account); 2. exchange rates; 3. appreciates; 4. equilibrium exchange rate __4__the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied. __1__the difference between a country’s sales of assets to foreigners and its purchases of assets from foreigners during a given period. __3__to increase in value __2__the price at which currencies trade, determined by the foreign exchange market. __4__the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied. __1__the difference between a country’s sales of assets to foreigners and its purchases of assets from foreigners during a given period. __3__to increase in value __2__the price at which currencies trade, determined by the foreign exchange market.

16. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Diminishing returns to physical capital; 2. depreciates; 3. real exchange rate; 4. purchasing power parity; _____in an aggregate production function when the amount of human capital per worker and the state of technology are held fixed, each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity. _____(between two countries’ currencies) the nominal exchange rate at which a given basket of goods and services would cost the same amount in each country. _____the exchange rate adjusted for international differences in aggregate price levels. _____to reduce the purchasing value of (money).

17. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review 1. Diminishing returns to physical capital; 2. depreciates; 3. real exchange rate; 4. purchasing power parity; __1__in an aggregate production function when the amount of human capital per worker and the state of technology are held fixed, each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity. __4__(between two countries’ currencies) the nominal exchange rate at which a given basket of goods and services would cost the same amount in each country. __3___the exchange rate adjusted for international differences in aggregate price levels. __2__to reduce the purchasing value of (money).

18. Mr. Weiss Test 6 – Sections 7 & 8 – Vocabulary Review