Question 1

Which of the following measures the growth rate of an economy?

Accepted Answer

A) The percentage change in real GDP from one period to another. 
B) Investment as a percentage of GDP. 
C) Real GDP divided by nominal GDP. 
D) GDP per worker. 
A) The percentage change in real GDP from one period to another. 
B) Investment as a percentage of GDP. 
C) Real GDP divided by nominal GDP. 
D) GDP per worker.

Question 2

While short-run growth increases capacity,long-run growth increases capacity utilization.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following measures productivity?

Accepted Answer

A) The ratio of current GDP to GDP in the base period. 
B) Percentage increase in GDP. 
C) GDP per capita. 
D) GDP per worker. 
A) The ratio of current GDP to GDP in the base period. 
B) Percentage increase in GDP. 
C) GDP per capita. 
D) GDP per worker.

Question 4

Dissaving occurs when households spend more on consumption than they receive as disposable income.

Accepted Answer

A) True 
 B)False

Question 5

Explain the difference between short-run capacity utilization and long-run growth in terms of the PPC.

Accepted Answer

Short-run recovery occurs because of inc

Question 6

Which of the following would shift the long-run aggregate supply curve to the right?

Accepted Answer

A) The elimination of government-subsidized college loans. 
B) The elimination of job training programs. 
C) A decrease in the marginal propensity to save. 
D) Political and economic stability. 
A) The elimination of government-subsidized college loans. 
B) The elimination of job training programs. 
C) A decrease in the marginal propensity to save. 
D) Political and economic stability.

Question 7

Tax incentives that encourage businesses to purchase more capital goods could result in a long run movement in Figure 17.4 from point

Accepted Answer

A) C to point D. 
B) B to point C. 
C) A to point C. 
D) E to point B. 
A) C to point D. 
B) B to point C. 
C) A to point C. 
D) E to point B.

Question 8

From the long-run perspective of economic growth,saving

Accepted Answer

A) Threatens growth because of the paradox of thrift. 
B) Causes the long-run aggregate supply curve to shift to the left. 
C) Is a basic source of investment financing. 
D) Shifts the production possibilities curve inward. 
A) Threatens growth because of the paradox of thrift. 
B) Causes the long-run aggregate supply curve to shift to the left. 
C) Is a basic source of investment financing. 
D) Shifts the production possibilities curve inward.

Question 9

Expansionary monetary and fiscal policies are designed to move the economy in Figure 17.1,in the short run,from point

Accepted Answer

A) D to point C. 
B) C to point B. 
C) D to point B. 
D) A to point D. 
A) D to point C. 
B) C to point B. 
C) D to point B. 
D) A to point D.

Question 10

When a large number of teenagers enter the workforce,there should be

Accepted Answer

A) No change in productivity. 
B) A decrease in average productivity. 
C) An increase in average productivity. 
D) A decrease in total productivity. 
A) No change in productivity. 
B) A decrease in average productivity. 
C) An increase in average productivity. 
D) A decrease in total productivity.

Question 11

If total output is $1,000 and total labor-hours are 20,labor productivity is

Accepted Answer

A) $20,000. 
B) $50. 
C) $20. 
D) $2,000. 
A) $20,000. 
B) $50. 
C) $20. 
D) $2,000.

Question 12

Between 1978 and 1984,the average yearly change in productivity

Accepted Answer

A) Increased geometrically. 
B) Increased arithmetically. 
C) Was significantly less than the average yearly change in productivity for 1995-2000. 
D) Was similar to the average yearly change in productivity for 1995-2000. 
A) Increased geometrically. 
B) Increased arithmetically. 
C) Was significantly less than the average yearly change in productivity for 1995-2000. 
D) Was similar to the average yearly change in productivity for 1995-2000.

Question 13

A long-run expansion in capacity

Accepted Answer

A) Shifts the production possibilities curve rightward. 
B) Shifts the production possibilities curve leftward. 
C) Moves the economy to a point closer to its existing production possibilities curve. 
D) Moves the economy upward to the left along its existing production possibilities curve. 
A) Shifts the production possibilities curve rightward. 
B) Shifts the production possibilities curve leftward. 
C) Moves the economy to a point closer to its existing production possibilities curve. 
D) Moves the economy upward to the left along its existing production possibilities curve.

Question 14

Which of the following situations would cause the greatest increase in labor productivity?

Accepted Answer

A) The employment rate increases and capital remains the same. 
B) The increase in the employment rate is greater than the increase in capital. 
C) The increase in capital is greater than the increase in the employment rate. 
D) The employment rate remains the same and capital decreases. 
A) The employment rate increases and capital remains the same. 
B) The increase in the employment rate is greater than the increase in capital. 
C) The increase in capital is greater than the increase in the employment rate. 
D) The employment rate remains the same and capital decreases.

Question 15

If real GDP rises from $500 billion to $510 billion,the economic growth rate is

Accepted Answer

A) 10 percent. 
B) 1.96 percent. 
C) 2 percent. 
D) -2 percent. 
A) 10 percent. 
B) 1.96 percent. 
C) 2 percent. 
D) -2 percent.

Question 16

Doomsday prophets focus on resource constraints to support their predictions that growth will come to a screeching halt.

Accepted Answer

A) True 
 B)False

Question 17

Long-run macroeconomic growth

Accepted Answer

A) Shifts the production possibilities curve outward. 
B) Shifts the aggregate demand curve to the right. 
C) Shifts the aggregate supply curve to the left. 
D) Moves the economy closer to the production possibilities curve. 
A) Shifts the production possibilities curve outward. 
B) Shifts the aggregate demand curve to the right. 
C) Shifts the aggregate supply curve to the left. 
D) Moves the economy closer to the production possibilities curve.

Question 18

The best measure of living standards is

Accepted Answer

A) The ratio of current GDP to GDP in the base period. 
B) Investment as a percentage of GDP. 
C) GDP per capita. 
D) GDP per worker. 
A) The ratio of current GDP to GDP in the base period. 
B) Investment as a percentage of GDP. 
C) GDP per capita. 
D) GDP per worker.

Question 19

Better short-run use of current capacity

Accepted Answer

A) Moves the economy closer to the production possibilities curve,while long-run growth shifts that curve outward. 
B) Increases capacity,while long-run economic growth increases capacity utilization. 
C) Shifts the aggregate supply curve outward,while long-run economic growth moves the economy up the aggregate supply curve. 
D) And long-run growth both shift the aggregate supply curve outward. 
A) Moves the economy closer to the production possibilities curve,while long-run growth shifts that curve outward. 
B) Increases capacity,while long-run economic growth increases capacity utilization. 
C) Shifts the aggregate supply curve outward,while long-run economic growth moves the economy up the aggregate supply curve. 
D) And long-run growth both shift the aggregate supply curve outward.

Question 20

Which of the following is not a source of productivity gain?

Accepted Answer

A) Higher skills. 
B) Technological advance. 
C) Economic growth. 
D) Improved management. 
A) Higher skills. 
B) Technological advance. 
C) Economic growth. 
D) Improved management.

Exam 17: Growth and Productivity: Long-Run Possibilities

Which of the following measures the growth rate of an economy?

While short-run growth increases capacity,long-run growth increases capacity utilization.

Which of the following measures productivity?

Dissaving occurs when households spend more on consumption than they receive as disposable income.

Explain the difference between short-run capacity utilization and long-run growth in terms of the PPC.

Which of the following would shift the long-run aggregate supply curve to the right?

Tax incentives that encourage businesses to purchase more capital goods could result in a long run movement in Figure 17.4 from point

From the long-run perspective of economic growth,saving

Expansionary monetary and fiscal policies are designed to move the economy in Figure 17.1,in the short run,from point

When a large number of teenagers enter the workforce,there should be

If total output is $1,000 and total labor-hours are 20,labor productivity is

Between 1978 and 1984,the average yearly change in productivity

A long-run expansion in capacity

Which of the following situations would cause the greatest increase in labor productivity?

If real GDP rises from $500 billion to $510 billion,the economic growth rate is

Doomsday prophets focus on resource constraints to support their predictions that growth will come to a screeching halt.

Long-run macroeconomic growth

The best measure of living standards is

Better short-run use of current capacity

Which of the following is not a source of productivity gain?

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

Filters