Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

A shift in the production function will shift the long-run aggregate supply curve.

Accepted Answer

A) True 
 B)False

Question 3

Use the following to answer questions .
Exhibit: Economic Growth, AD and AS Analysis  
-(Exhibit: Economic Growth, AD and AS Analysis) Assume that the economy is initially in long-run equilibrium. What happens if the price of oil, a key input, increases significantly in the economy?

Accepted Answer

A)  The long-run aggregate supply and the short-run aggregate supply curves shift left. 
B)  The short-run aggregate supply curve shifts left. 
C)  The aggregate demand and the short-run aggregate supply curves shift left. 
D)  The long-run aggregate supply, the short-run aggregate supply, and the aggregate demand curves shift left. 
A)  The long-run aggregate supply and the short-run aggregate supply curves shift left. 
B)  The short-run aggregate supply curve shifts left. 
C)  The aggregate demand and the short-run aggregate supply curves shift left. 
D)  The long-run aggregate supply, the short-run aggregate supply, and the aggregate demand curves shift left.

Question 4

All of the following are sources of economic growth except

Accepted Answer

A)  increases in human capital. 
B)  an increase in the savings rate. 
C)  an increase in consumption spending to stimulate production. 
D)  increases in physical capital. 
A)  increases in human capital. 
B)  an increase in the savings rate. 
C)  an increase in consumption spending to stimulate production. 
D)  increases in physical capital.

Question 5

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 6

Economic growth
I. is represented by an outward shift of the production possibilities curve.
II. is defined in terms of a series of events that increase the economy's ability to produce goods and services.
III. refers to a process that increases potential output.
IV. occurs when the economy operates on its production possibilities frontier.

Accepted Answer

A)  I and IV only 
B)  I, II, and III 
C)  I, III, and IV 
D)  I, II, III, and IV 
A)  I and IV only 
B)  I, II, and III 
C)  I, III, and IV 
D)  I, II, III, and IV

Question 7

A change in the availability of natural resources will shift the aggregate production function.

Accepted Answer

A) True 
 B)False

Question 8

Suppose a nation's real GDP grows at approximately 3.6% per year and its per capita real GDP grows by 2.2%. Calculate the approximate rate of population growth.

Accepted Answer

A)  0.6% per year 
B)  1.4% per year 
C)  -1.4% per year 
D)  5.8% per year 
A)  0.6% per year 
B)  1.4% per year 
C)  -1.4% per year 
D)  5.8% per year

Question 9

The 2015 Going for Growth study suggested that:

Accepted Answer

A)  reform efforts have been substantial enough in most countries to complete eliminate priority areas completely. 
B)  reform efforts have been the same across priority areas. 
C)  reform efforts have been stronger in some priority areas than in others. 
D)  the Going for Growth agenda is no longer important because economic growth per capita has improved in most countries 
A)  reform efforts have been substantial enough in most countries to complete eliminate priority areas completely. 
B)  reform efforts have been the same across priority areas. 
C)  reform efforts have been stronger in some priority areas than in others. 
D)  the Going for Growth agenda is no longer important because economic growth per capita has improved in most countries

Question 10

Use the following to answer questions .
Exhibit: Production Possibilities Curves 2  
-(Exhibit: Production Possibilities Curves 2) Assume that a nation is operating on production possibilities curve CD. Economic growth is best illustrated 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 11

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

Accepted Answer

A) True 
 B)False

Question 12

Shifts to the right in the long-run aggregate supply curve are the result of

Accepted Answer

A)  upward shifts in the production function. 
B)  increases in aggregate demand. 
C)  decreases in the supply of labor. 
D)  reductions in the demand for labor. 
A)  upward shifts in the production function. 
B)  increases in aggregate demand. 
C)  decreases in the supply of labor. 
D)  reductions in the demand for labor.

Question 13

Use the following to answer questions.
Exhibit: Aggregate Production Function, Labor Market, and LRAS  
-(Exhibit: Aggregate Production Function, Labor Market, and LRAS) In the labor market represented in Panel (b),
I. the equilibrium real wage equals $40,000.
II. at the equilibrium real wage, 100 million workers are employed.
III. the equilibrium real wage is that which prevails when the economy achieves its natural level of employment.

Accepted Answer

A)  I only 
B)  I and II only 
C)  I, II, and III 
D)  None of the above; to determine if the labor market is in equilibrium, we need information on the economy's aggregate production function. 
A)  I only 
B)  I and II only 
C)  I, II, and III 
D)  None of the above; to determine if the labor market is in equilibrium, we need information on the economy's aggregate production function.

Question 14

Consider a firm that produces output using labor and capital. The firm's stock of capital is fixed and in order to increase output, it must employ more workers. Which of the following occurs as the number of workers increases?

Accepted Answer

A)  Output per worker rises. 
B)  Capital per worker falls. 
C)  Wage per worker falls. 
D)  Total output increases exponentially. 
A)  Output per worker rises. 
B)  Capital per worker falls. 
C)  Wage per worker falls. 
D)  Total output increases exponentially.

Question 15

During the industrial revolution (the period between the Civil War and World War I), the United States had a massive influx of working age immigrants. What happens in the labor market?

Accepted Answer

A)  The supply of labor curve shifts to the right. 
B)  The demand for labor curve shifts to the right. 
C)  The supply of labor and the demand for labor curves shift to the right. 
D)  There will be an upward movement along the labor supply curve. 
A)  The supply of labor curve shifts to the right. 
B)  The demand for labor curve shifts to the right. 
C)  The supply of labor and the demand for labor curves shift to the right. 
D)  There will be an upward movement along the labor supply curve.

Question 16

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 17

Use the following to answer questions .
Exhibit: Aggregate Production Function  
-(Exhibit: Aggregate Production Function) Which of the following could cause the production function to shift upward?

Accepted Answer

A)  an increase in the quantity of labor employed 
B)  an increase in the economy's average price level 
C)  an increase in the availability of natural resources 
D)  an increase in the real wage rate 
A)  an increase in the quantity of labor employed 
B)  an increase in the economy's average price level 
C)  an increase in the availability of natural resources 
D)  an increase in the real wage rate

Question 18

Economic growth is best viewed as short-run changes in nominal GDP.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following events would be most likely to increase an economy's potential output?

Accepted Answer

A)  a tax increase 
B)  an increase in transfer payments by the government 
C)  an improvement in technology 
D)  an increase in net exports 
A)  a tax increase 
B)  an increase in transfer payments by the government 
C)  an improvement in technology 
D)  an increase in net exports

Question 20

Which of the following will not increase labor's productivity?

Accepted Answer

A)  education 
B)  technology 
C)  new capital 
D)  growth in output 
A)  education 
B)  technology 
C)  new capital 
D)  growth in output

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

A shift in the production function will shift the long-run aggregate supply curve.

Use the following to answer questions . Exhibit: Economic Growth, AD and AS Analysis -(Exhibit: Economic Growth, AD and AS Analysis) Assume that the economy is initially in long-run equilibrium. What happens if the price of oil, a key input, increases significantly in the economy?

All of the following are sources of economic growth except

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.

A change in the availability of natural resources will shift the aggregate production function.

Suppose a nation's real GDP grows at approximately 3.6% per year and its per capita real GDP grows by 2.2%. Calculate the approximate rate of population growth.

The 2015 Going for Growth study suggested that:

Use the following to answer questions . Exhibit: Production Possibilities Curves 2 -(Exhibit: Production Possibilities Curves 2) Assume that a nation is operating on production possibilities curve CD. Economic growth is best illustrated by a

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

Shifts to the right in the long-run aggregate supply curve are the result of

Consider a firm that produces output using labor and capital. The firm's stock of capital is fixed and in order to increase output, it must employ more workers. Which of the following occurs as the number of workers increases?

During the industrial revolution (the period between the Civil War and World War I), the United States had a massive influx of working age immigrants. What happens in the labor market?

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?

Use the following to answer questions . Exhibit: Aggregate Production Function -(Exhibit: Aggregate Production Function) Which of the following could cause the production function to shift upward?

Economic growth is best viewed as short-run changes in nominal GDP.

Which of the following events would be most likely to increase an economy's potential output?

Which of the following will not increase labor's productivity?

Economics: the Study of Choice

Demand and Supply

Applications of Supply and Demand

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

Filters

Exam 8: Economic Growth

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

A shift in the production function will shift the long-run aggregate supply curve.

Use the following to answer questions . Exhibit: Economic Growth, AD and AS Analysis -(Exhibit: Economic Growth, AD and AS Analysis) Assume that the economy is initially in long-run equilibrium. What happens if the price of oil, a key input, increases significantly in the economy?

All of the following are sources of economic growth except

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.

A change in the availability of natural resources will shift the aggregate production function.

Suppose a nation's real GDP grows at approximately 3.6% per year and its per capita real GDP grows by 2.2%. Calculate the approximate rate of population growth.

The 2015 Going for Growth study suggested that:

Use the following to answer questions . Exhibit: Production Possibilities Curves 2 -(Exhibit: Production Possibilities Curves 2) Assume that a nation is operating on production possibilities curve CD. Economic growth is best illustrated by a

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

Shifts to the right in the long-run aggregate supply curve are the result of

Consider a firm that produces output using labor and capital. The firm's stock of capital is fixed and in order to increase output, it must employ more workers. Which of the following occurs as the number of workers increases?

During the industrial revolution (the period between the Civil War and World War I), the United States had a massive influx of working age immigrants. What happens in the labor market?

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?

Use the following to answer questions . Exhibit: Aggregate Production Function -(Exhibit: Aggregate Production Function) Which of the following could cause the production function to shift upward?

Economic growth is best viewed as short-run changes in nominal GDP.

Which of the following events would be most likely to increase an economy's potential output?

Which of the following will not increase labor's productivity?

Economics: the Study of Choice

Demand and Supply

Applications of Supply and Demand

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

Filters