Exam 6: Economic Growth

Suppose there is a rise in the price level, but no change in the money wage rate. As a result, the quantity of labor demanded

Using the Rule of 70, if the country of Flowerdom's current growth rate of real GDP per person was 7 percent a year, how long would it take the country's real GDP per person to double?

-Dismalia is an economy that behaves according to the classical growth model. The country's subsistence real GD an hour. The relationship between capital per hour of labor and real GDP per hour of labor are shown in the tabl above. Initially, the population of Dismalia is constant, and real GDP is at its subsistence level. Then a technolog advance increases productivity. a) What are the initial capital per hour of labor and real GDP per hour of labor? b) What happens to real GDP per hour of labor immediately following the technological advance? c) What happens to Dismalia's population following the technological advance? d) What is the eventual quantity of capital per hour of labor and real GDP per hour of labor in Dismalia?

If the price level rises by 2 percent and workers' money wages increase by 2 percent, then the

When the population increases with no change in labor productivity, employment and potential GDP _ .

In a report from the Pew Research Center, findings show that "The American public continues to have a mixed opinion about free trade agreements...there is less agreement that free trade has promoted economic growth or led to lower prices on products sold in the United States. ..almost 60 percent of Americans "say that free trade is good for the people of developing countries, compared with just 19 percent who say it does not make a difference and 9 percent who think that free trade agreements are bad for the publics of developing countries. The report provides

Human capital is, in part, the

Suppose capital per hour of labor grows at 3.0 percent per year and technological change grows at 1)0 percent per year. Using the one- third rule, the growth rate of real GDP per hour of labor is Percent per year.

The aggregate production function relating real GDP to labor hours

The calculation of the contribution of an increase in labor and capital and the contribution of technological change to real GDP growth is called _ .

The curvature of the production function shows that as employment increases, the productivity of labor

Factors that influence labor productivity include .

An increase in labor productivity

Which of the following does NOT increase labor productivity?

If the price level increases and workers' money wage rates remain constant,which of the following w occur? I. The quantity of labor supplied will decrease. II. The real wage rate will decrease. III. The labor supply curve will shift rightward.

Because the productivity of labor decreases as the quantity of labor employed increases,

According to the new growth theory

Which of the following ideas apply to the neoclassical growth theory? I. The rate of technological change influences the rate of economic growth. II. Technological change promotes saving and investment. III. Convergence of economic growth rates across countries.

A central proposition of the new growth theory is that

-In the above figure, suppose the economy is initially at point a. According to classical growth theory, an increase in technology will