Question 1

Approximately what percentage of families in the U.S. own homes?

Accepted Answer

A)  10% 
B)  25% 
C)  50% 
D)  67% 
A)  10% 
B)  25% 
C)  50% 
D)  67% D

Question 2

Which of the following factors contribute to economic growth?

Accepted Answer

A)  A decrease in physical capital 
B)  An increase in the availability of natural resources 
C)  An increase in the price level 
D)  A decrease in unemployment 
A)  A decrease in physical capital 
B)  An increase in the availability of natural resources 
C)  An increase in the price level 
D)  A decrease in unemployment B

Question 3

Economic growth is best measured by the increase in

Accepted Answer

A)  nominal GDP. 
B)  potential output. 
C)  disposable personal income in current dollars. 
D)  disposable personal income in real dollars. 
A)  nominal GDP. 
B)  potential output. 
C)  disposable personal income in current dollars. 
D)  disposable personal income in real dollars. B

Question 4

Figure 8-1  
-Refer to Figure 8-1. Economic growth is represented by a movement

Accepted Answer

A)  from C to D. 
B)  from D to E. 
C)  from F to A. 
D)  from B to C. 
A)  from C to D. 
B)  from D to E. 
C)  from F to A. 
D)  from B to C.

Question 5

Which of the following statements is true?

Accepted Answer

A)  Measuring economic growth as the rate of increase in actual real GDP is a valid measure. 
B)  Measuring economic growth as the rate of increase in actual real GDP leads to an inaccurate measure of economic growth. 
C)  Economic growth must be measured in nominal terms converted to real values each year. 
D)  Economic growth must be measured in real GDP terms and converted to nominal terms each year. 
A)  Measuring economic growth as the rate of increase in actual real GDP is a valid measure. 
B)  Measuring economic growth as the rate of increase in actual real GDP leads to an inaccurate measure of economic growth. 
C)  Economic growth must be measured in nominal terms converted to real values each year. 
D)  Economic growth must be measured in real GDP terms and converted to nominal terms each year.

Question 6

An increase in technology will shift the long-run aggregate supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 7

Holding everything else unchanged, if a nation's output grows at approximately 2.4% per year and its population doubles in 45 years, calculate the approximate rate of change in per capita real GDP.

Accepted Answer

A)  0.8% per year 
B)  1.6% per year 
C)  2.4% per year 
D)  4% per year 
A)  0.8% per year 
B)  1.6% per year 
C)  2.4% per year 
D)  4% per year

Question 8

If the production possibilities curve shifts outward, the long-run aggregate supply curve will shift rightward.

Accepted Answer

A) True 
 B)False

Question 9

Figure 8-4  
-Refer to Figure 8-4. The production function displays

Accepted Answer

A)  increasing marginal returns to labor. 
B)  constant marginal returns to labor. 
C)  increasing marginal returns to labor initially followed by diminishing marginal returns. 
D)  diminishing marginal returns to labor. 
A)  increasing marginal returns to labor. 
B)  constant marginal returns to labor. 
C)  increasing marginal returns to labor initially followed by diminishing marginal returns. 
D)  diminishing marginal returns to labor.

Question 10

All else constant, if real GDP doubles in 12 years, its average annual growth rate is

Accepted Answer

A)  approximately 6% . 
B)  approximately 5%. 
C)  approximately 4%. 
D)  approximately 3%. 
A)  approximately 6% . 
B)  approximately 5%. 
C)  approximately 4%. 
D)  approximately 3%.

Question 11

Economists do not use actual values of real GDP to measure economic growth because

Accepted Answer

A)  real GDP holds price level constant, but in reality price level changes from year to year. 
B)  changes in real GDP could be due to fluctuations in the level of economic activity. 
C)  economic growth encompasses more than just growth in output. 
D)  changes in real GDP do not provide any information about income distribution. 
A)  real GDP holds price level constant, but in reality price level changes from year to year. 
B)  changes in real GDP could be due to fluctuations in the level of economic activity. 
C)  economic growth encompasses more than just growth in output. 
D)  changes in real GDP do not provide any information about income distribution.

Question 12

Figure 8-6  
-Refer to Figure 8-6. Assume that the economy is initially in long-run equilibrium. If oil prices in the economy increased dramatically and remained high for so long that most of the industries in the economy had to significantly form new capital and retool much of its existing capital, the economy would suffer. In this event,

Accepted Answer

A)  the long-run aggregate supply and the short-run aggregate supply curves would shift left, reducing the future industrial capacity and prospects for economic growth. 
B)  the aggregate demand curve would shift left, reducing the future industrial capacity and prospects for economic growth. 
C)  only the short-run aggregate supply curve would shift left, permanently reducing the economy's potential output. 
D)  the long-run aggregate supply, the short-run aggregate supply, and the aggregate demand curves would shift left, sending the economy into a long recession. 
A)  the long-run aggregate supply and the short-run aggregate supply curves would shift left, reducing the future industrial capacity and prospects for economic growth. 
B)  the aggregate demand curve would shift left, reducing the future industrial capacity and prospects for economic growth. 
C)  only the short-run aggregate supply curve would shift left, permanently reducing the economy's potential output. 
D)  the long-run aggregate supply, the short-run aggregate supply, and the aggregate demand curves would shift left, sending the economy into a long recession.

Question 13

Using a three-panel diagram of the labor market, the aggregate production function, and long-run aggregate supply, show and explain the effect of a decrease in the labor supply on wages, employment, and potential output.

Accepted Answer

To illustrate the effect of a decrease i

Question 14

Suppose the world's population in 2012 is 7.1 billion and is projected to grow at a rate of 1.2% per year. In approximately what year will the world's population be 14.2 billion?

Accepted Answer

A)  in the year 2021 
B)  in the year 2054 
C)  in the year 2072 
D)  in the year 3000 
A)  in the year 2021 
B)  in the year 2054 
C)  in the year 2072 
D)  in the year 3000

Question 15

Holding all else constant, a country's standard of living will decline if its

Accepted Answer

A)  nominal GDP grows at a faster rate than real GDP. 
B)  nominal GDP grows at a slower rate than real GDP. 
C)  the rate of population growth exceeds the rate of growth of real GDP. 
D)  the rate of population growth is less than the rate of growth of real GDP. 
A)  nominal GDP grows at a faster rate than real GDP. 
B)  nominal GDP grows at a slower rate than real GDP. 
C)  the rate of population growth exceeds the rate of growth of real GDP. 
D)  the rate of population growth is less than the rate of growth of real GDP.

Question 16

Figure 8-2  
-Refer to Figure 8-2. A cyclical increase in the level of economic activity is represented by a

Accepted Answer

A)  shift from curve CD to curve AB. 
B)  shift from curve CD to curve EF. 
C)  movement from point Q to point O on the frontier CD. 
D)  movement from point R inside the frontier CD to point P on the frontier CD. 
A)  shift from curve CD to curve AB. 
B)  shift from curve CD to curve EF. 
C)  movement from point Q to point O on the frontier CD. 
D)  movement from point R inside the frontier CD to point P on the frontier CD.

Question 17

Towards the end of the twentieth century, some of the world's more affluent countries experienced robust growth. Which of the following is not linked to high growth performance?

Accepted Answer

A)  encouragement of competitive behavior 
B)  private sector research and development 
C)  strict regulations in labor markets 
D)  liberal trade policies 
A)  encouragement of competitive behavior 
B)  private sector research and development 
C)  strict regulations in labor markets 
D)  liberal trade policies

Question 18

Economic growth can be achieved through

Accepted Answer

A)  a decrease in the supply of labor. 
B)  a decrease in the labor force participation rate.. 
C)  an increase in the production of capital goods. 
D)  a reduction in expenditures on research and development. 
A)  a decrease in the supply of labor. 
B)  a decrease in the labor force participation rate.. 
C)  an increase in the production of capital goods. 
D)  a reduction in expenditures on research and development.

Question 19

Towards the end of the twentieth century, some of the world's more affluent countries experienced robust growth while others experienced growth slowdown or even stagnation. Which of the following is not a reason for the divergent growth trend?

Accepted Answer

A)  disparities in the rate of accumulation of human capital 
B)  unwillingness to enforce property rights 
C)  disparities in the employment rate 
D)  differences in macroeconomic policymaking that allow producers to take a long-term view 
A)  disparities in the rate of accumulation of human capital 
B)  unwillingness to enforce property rights 
C)  disparities in the employment rate 
D)  differences in macroeconomic policymaking that allow producers to take a long-term view

Question 20

Which of the following statements is true?

Accepted Answer

A)  Technological gains tend to reduce the demand for labor because producers substitute technology and capital for labor. 
B)  Technological change and capital investment tend to increase real wages because labor productivity increases. 
C)  Technological change and capital investment tend to reduce the quantity of labor employed, and reduce real wages. 
D)  Technological change and capital investment tend to reduce the demand for labor and increase the supply of labor leading to an indeterminate effect on real wages. 
A)  Technological gains tend to reduce the demand for labor because producers substitute technology and capital for labor. 
B)  Technological change and capital investment tend to increase real wages because labor productivity increases. 
C)  Technological change and capital investment tend to reduce the quantity of labor employed, and reduce real wages. 
D)  Technological change and capital investment tend to reduce the demand for labor and increase the supply of labor leading to an indeterminate effect on real wages.

Approximately what percentage of families in the U.S. own homes?

Which of the following factors contribute to economic growth?

Economic growth is best measured by the increase in

Figure 8-1 -Refer to Figure 8-1. Economic growth is represented by a movement

Which of the following statements is true?

An increase in technology will shift the long-run aggregate supply curve to the left.

Holding everything else unchanged, if a nation's output grows at approximately 2.4% per year and its population doubles in 45 years, calculate the approximate rate of change in per capita real GDP.

If the production possibilities curve shifts outward, the long-run aggregate supply curve will shift rightward.

Figure 8-4 -Refer to Figure 8-4. The production function displays

All else constant, if real GDP doubles in 12 years, its average annual growth rate is

Economists do not use actual values of real GDP to measure economic growth because

Using a three-panel diagram of the labor market, the aggregate production function, and long-run aggregate supply, show and explain the effect of a decrease in the labor supply on wages, employment, and potential output.

Suppose the world's population in 2012 is 7.1 billion and is projected to grow at a rate of 1.2% per year. In approximately what year will the world's population be 14.2 billion?

Holding all else constant, a country's standard of living will decline if its

Figure 8-2 -Refer to Figure 8-2. A cyclical increase in the level of economic activity is represented by a

Towards the end of the twentieth century, some of the world's more affluent countries experienced robust growth. Which of the following is not linked to high growth performance?

Economic growth can be achieved through

Towards the end of the twentieth century, some of the world's more affluent countries experienced robust growth while others experienced growth slowdown or even stagnation. Which of the following is not a reason for the divergent growth trend?

Which of the following statements is true?

Economics: the Study of Choice

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

Filters

Exam 8: Economic Growth

Approximately what percentage of families in the U.S. own homes?

Which of the following factors contribute to economic growth?

Economic growth is best measured by the increase in

Figure 8-1 -Refer to Figure 8-1. Economic growth is represented by a movement

Which of the following statements is true?

An increase in technology will shift the long-run aggregate supply curve to the left.

Holding everything else unchanged, if a nation's output grows at approximately 2.4% per year and its population doubles in 45 years, calculate the approximate rate of change in per capita real GDP.

If the production possibilities curve shifts outward, the long-run aggregate supply curve will shift rightward.

Figure 8-4 -Refer to Figure 8-4. The production function displays

All else constant, if real GDP doubles in 12 years, its average annual growth rate is

Economists do not use actual values of real GDP to measure economic growth because

Using a three-panel diagram of the labor market, the aggregate production function, and long-run aggregate supply, show and explain the effect of a decrease in the labor supply on wages, employment, and potential output.

Suppose the world's population in 2012 is 7.1 billion and is projected to grow at a rate of 1.2% per year. In approximately what year will the world's population be 14.2 billion?

Holding all else constant, a country's standard of living will decline if its

Figure 8-2 -Refer to Figure 8-2. A cyclical increase in the level of economic activity is represented by a

Towards the end of the twentieth century, some of the world's more affluent countries experienced robust growth. Which of the following is not linked to high growth performance?

Economic growth can be achieved through

Towards the end of the twentieth century, some of the world's more affluent countries experienced robust growth while others experienced growth slowdown or even stagnation. Which of the following is not a reason for the divergent growth trend?

Which of the following statements is true?

Economics: the Study of Choice

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

Filters