Question 1

If capital per worker rises,

Accepted Answer

A)  firms respond by raising their prices. 
B)  labor productivity decreases. 
C)  labor productivity increases. 
D)  no technological progress occurs. 
A)  firms respond by raising their prices. 
B)  labor productivity decreases. 
C)  labor productivity increases. 
D)  no technological progress occurs.

Question 2

Of the three economic growth theories, which is the most optimistic about the chances of real GDP per person growing indefinitely? Which is the most pessimistic? What accounts for the differences?

Accepted Answer

The most optimistic is the new growth th

Question 3

Suppose that capital per hour of labor increases by 15 percent and that real GDP per hour of labor increases by 10 percent. What is the contribution to the increase in real GDP per hour of labor from the change in capital per hour of labor?

Accepted Answer

A)  It increased real GDP per hour of labor by 5 percent. 
B)  It increased real GDP per hour of labor by 10 percent. 
C)  It increased real GDP per hour of labor by 3.3 percent. 
D)  It increased real GDP per hour of labor by 15 percent. 
A)  It increased real GDP per hour of labor by 5 percent. 
B)  It increased real GDP per hour of labor by 10 percent. 
C)  It increased real GDP per hour of labor by 3.3 percent. 
D)  It increased real GDP per hour of labor by 15 percent.

Question 4

In the world of Malthus, real GDP per person eventually stops growing. The primary reason for the decrease in economic growth is that

Accepted Answer

A)  savings were not required in order for investment to occur. 
B)  there are diminishing returns to labor that drives the real wage back to the subsistence level. 
C)  the neoclassical growth model had not yet been invented. 
D)  rising wage rates would severely reduce the rate of growth of labor productivity. 
A)  savings were not required in order for investment to occur. 
B)  there are diminishing returns to labor that drives the real wage back to the subsistence level. 
C)  the neoclassical growth model had not yet been invented. 
D)  rising wage rates would severely reduce the rate of growth of labor productivity.

Question 5

In the United States, real wage rates have risen because the

Accepted Answer

A)  labor demand curve has shifted leftward and the labor supply curve has not shifted. 
B)  labor supply curve has shifted rightward and the labor demand curve has not shifted. 
C)  labor demand curve has shifted rightward more than the labor supply curve has shifted rightward. 
D)  labor demand curve has shifted leftward more than the labor supply curve has shifted rightward. 
A)  labor demand curve has shifted leftward and the labor supply curve has not shifted. 
B)  labor supply curve has shifted rightward and the labor demand curve has not shifted. 
C)  labor demand curve has shifted rightward more than the labor supply curve has shifted rightward. 
D)  labor demand curve has shifted leftward more than the labor supply curve has shifted rightward.

Question 6

In the neoclassical theory of growth, growth in is the result of luck.

Accepted Answer

A)  technology 
B)  saving 
C)  the real interest rate 
D)  income 
A)  technology 
B)  saving 
C)  the real interest rate 
D)  income

Question 7

Within neoclassical growth theory, technological change _ saving and _ investment.

Accepted Answer

A)  increases; increases 
B)  decreases; decreases 
C)  increases; decreases 
D)  decreases; increases 
A)  increases; increases 
B)  decreases; decreases 
C)  increases; decreases 
D)  decreases; increases

Question 8

An increase in the population and hence the supply of labor causes a

Accepted Answer

A)  surplus of labor at the original real wage rate and the real wage rate will fall. 
B)  shortage of labor at the original real wage rate and the real wage rate will fall. 
C)  surplus of labor at the original real wage rate and the real wage rate will rise. 
D)  shortage of labor at the original real wage rate and the real wage rate will rise. 
A)  surplus of labor at the original real wage rate and the real wage rate will fall. 
B)  shortage of labor at the original real wage rate and the real wage rate will fall. 
C)  surplus of labor at the original real wage rate and the real wage rate will rise. 
D)  shortage of labor at the original real wage rate and the real wage rate will rise.

Question 9

In 2008, of the following which nations had the highest level of real GDP per person?

Accepted Answer

A)  France. 
B)  Canada. 
C)  Japan. 
D)  China. 
A)  France. 
B)  Canada. 
C)  Japan. 
D)  China.

Question 10

As labor continues to increase, a nation will

Accepted Answer

A)  see a movement along the aggregate production function, but real GDP will increase less and less. 
B)  see a movement along the aggregate production function, but real GDP will decrease less and less. 
C)  see a movement along the aggregate production function, but no shift in it. 
D)  see a shift of the aggregate production function, but no movement along it. 
A)  see a movement along the aggregate production function, but real GDP will increase less and less. 
B)  see a movement along the aggregate production function, but real GDP will decrease less and less. 
C)  see a movement along the aggregate production function, but no shift in it. 
D)  see a shift of the aggregate production function, but no movement along it.

Question 11

If real GDP is $13,500 billion and aggregate hours are 110 billion, labor productivity equals

Accepted Answer

A)  $104 per hour. 
B)  $123 per hour. 
C)  $675 per hour. 
D)  $6.75 per hour. 
A)  $104 per hour. 
B)  $123 per hour. 
C)  $675 per hour. 
D)  $6.75 per hour.

Question 12

Which of the following ideas apply to the neoclassical growth theory?
I. Technological change results from chance.
II. Growth in real GDP stops if technology stops advancing.

Accepted Answer

A)  I only 
B)  II only 
C)  neither I nor II 
D)  both I and II 
A)  I only 
B)  II only 
C)  neither I nor II 
D)  both I and II

Question 13

In general, a higher real wage rate decreases the quantity of labor supplied because fewer people enter the labor force.

Accepted Answer

A) True 
 B)False

Question 14

Growth accounting divides the growth of labor productivity into two components, which are

Accepted Answer

A)  the labor/capital ratio and the price of labor relative to the price of capital. 
B)  growth in capital per hour of labor and technological change. 
C)  real GDP per person and the amount of capital per worker. 
D)  real GDP per hour of labor and real GDP per dollar of capital. 
A)  the labor/capital ratio and the price of labor relative to the price of capital. 
B)  growth in capital per hour of labor and technological change. 
C)  real GDP per person and the amount of capital per worker. 
D)  real GDP per hour of labor and real GDP per dollar of capital.

Question 15

According to the classical growth theory of Thomas Malthus,

Accepted Answer

A)  increases in real GDP per person are only temporary. 
B)  technological advances lead to permanent increases in real GDP per person. 
C)  the population growth rate is fixed. 
D)  labor productivity increases continuously. 
A)  increases in real GDP per person are only temporary. 
B)  technological advances lead to permanent increases in real GDP per person. 
C)  the population growth rate is fixed. 
D)  labor productivity increases continuously.

Question 16

Suppose that capital per hour of labor has increased by 9 percent. If real GDP per hour of labor has risen by 10 percent, the one- third rule states that, holding technology constant, capital per hour of labor accounts for

Accepted Answer

A)  4 percent of the growth rate in real GDP per hour of labor, with technology accounting for the remaining 6 percent. 
B)  7 percent of the growth rate in real GDP per hour of labor, with technology accounting for the remaining 3 percent. 
C)  3 percent of the growth rate in real GDP per hour of labor, with technology accounting for the remaining 7 percent. 
D)  2 percent of the growth rate in real GDP per hour of labor, with technology accounting for the remaining 8 percent. 
A)  4 percent of the growth rate in real GDP per hour of labor, with technology accounting for the remaining 6 percent. 
B)  7 percent of the growth rate in real GDP per hour of labor, with technology accounting for the remaining 3 percent. 
C)  3 percent of the growth rate in real GDP per hour of labor, with technology accounting for the remaining 7 percent. 
D)  2 percent of the growth rate in real GDP per hour of labor, with technology accounting for the remaining 8 percent.

Question 17

-In the above figure, suppose the economy is initially on LD0 and LS0. As a result of an increase in technology, classical growth theory predicts

Accepted Answer

A)  the real wage rate will first fall, then rise. 
B)  there will be an increase in population. 
C)  the subsistence real wage rate will rise. 
D)  the subsistence real wage rate will fall. 
A)  the real wage rate will first fall, then rise. 
B)  there will be an increase in population. 
C)  the subsistence real wage rate will rise. 
D)  the subsistence real wage rate will fall.

Question 18

Suppose that the labor market is currently in equilibrium at a wage rate of $2.60. Suppose that the subsistence wage rate is $2.20. According to the classical theory of growth, which of the following describes subsequent events in the economy?

Accepted Answer

A)  Population will grow because the current real wage rate is above the subsistence wage rate. 
B)  The economy is in equilibrium with labor supply equal to labor demand, so the economy stays at this real wage rate. 
C)  Population will decline because labor supply exceeds the subsistence level of labor supply. 
D)  Real wages will continue to grow above the subsistence level. 
A)  Population will grow because the current real wage rate is above the subsistence wage rate. 
B)  The economy is in equilibrium with labor supply equal to labor demand, so the economy stays at this real wage rate. 
C)  Population will decline because labor supply exceeds the subsistence level of labor supply. 
D)  Real wages will continue to grow above the subsistence level.

Question 19

Strategy to Address Dependence on Foreign Workers, Labour Market Demands
The prime minister of Malaysia announced his government's "immediate focus would be to enhanc development and improve the quality of education." By "the constant upgrading of skills of the co workforce" he hoped to improve the country's "global competitiveness and raise average incomes of workers.."
Thestar.com.my 11/21/200
The story describes

Accepted Answer

A)  a plan to increase human capital. 
B)  improvements in Malaysia's incentive system. 
C)  a plan increase physical capital. 
D)  a consequence of economic growth. 
A)  a plan to increase human capital. 
B)  improvements in Malaysia's incentive system. 
C)  a plan increase physical capital. 
D)  a consequence of economic growth.

Question 20

Which of following was a period of below- average economic growth in the United States?

Accepted Answer

A)  the 1930s 
B)  the 1920s 
C)  the 1960s 
D)  all of the above 
A)  the 1930s 
B)  the 1920s 
C)  the 1960s 
D)  all of the above

If capital per worker rises,

Of the three economic growth theories, which is the most optimistic about the chances of real GDP per person growing indefinitely? Which is the most pessimistic? What accounts for the differences?

Suppose that capital per hour of labor increases by 15 percent and that real GDP per hour of labor increases by 10 percent. What is the contribution to the increase in real GDP per hour of labor from the change in capital per hour of labor?

In the world of Malthus, real GDP per person eventually stops growing. The primary reason for the decrease in economic growth is that

In the United States, real wage rates have risen because the

In the neoclassical theory of growth, growth in is the result of luck.

Within neoclassical growth theory, technological change _ saving and _ investment.

An increase in the population and hence the supply of labor causes a

In 2008, of the following which nations had the highest level of real GDP per person?

As labor continues to increase, a nation will

If real GDP is $13,500 billion and aggregate hours are 110 billion, labor productivity equals

Which of the following ideas apply to the neoclassical growth theory? I. Technological change results from chance. II. Growth in real GDP stops if technology stops advancing.

In general, a higher real wage rate decreases the quantity of labor supplied because fewer people enter the labor force.

Growth accounting divides the growth of labor productivity into two components, which are

According to the classical growth theory of Thomas Malthus,

Suppose that capital per hour of labor has increased by 9 percent. If real GDP per hour of labor has risen by 10 percent, the one- third rule states that, holding technology constant, capital per hour of labor accounts for

-In the above figure, suppose the economy is initially on LD₀and LS₀. As a result of an increase in technology, classical growth theory predicts

Suppose that the labor market is currently in equilibrium at a wage rate of $2.60. Suppose that the subsistence wage rate is $2.20. According to the classical theory of growth, which of the following describes subsequent events in the economy?

Which of following was a period of below- average economic growth in the United States?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 6: Economic Growth

If capital per worker rises,

Of the three economic growth theories, which is the most optimistic about the chances of real GDP per person growing indefinitely? Which is the most pessimistic? What accounts for the differences?

Suppose that capital per hour of labor increases by 15 percent and that real GDP per hour of labor increases by 10 percent. What is the contribution to the increase in real GDP per hour of labor from the change in capital per hour of labor?

In the world of Malthus, real GDP per person eventually stops growing. The primary reason for the decrease in economic growth is that

In the United States, real wage rates have risen because the

In the neoclassical theory of growth, growth in is the result of luck.

Within neoclassical growth theory, technological change _ saving and _ investment.

An increase in the population and hence the supply of labor causes a

In 2008, of the following which nations had the highest level of real GDP per person?

As labor continues to increase, a nation will

If real GDP is $13,500 billion and aggregate hours are 110 billion, labor productivity equals

Which of the following ideas apply to the neoclassical growth theory? I. Technological change results from chance. II. Growth in real GDP stops if technology stops advancing.

In general, a higher real wage rate decreases the quantity of labor supplied because fewer people enter the labor force.

Growth accounting divides the growth of labor productivity into two components, which are

According to the classical growth theory of Thomas Malthus,

Suppose that capital per hour of labor has increased by 9 percent. If real GDP per hour of labor has risen by 10 percent, the one- third rule states that, holding technology constant, capital per hour of labor accounts for

-In the above figure, suppose the economy is initially on LD0 and LS0. As a result of an increase in technology, classical growth theory predicts

Suppose that the labor market is currently in equilibrium at a wage rate of $2.60. Suppose that the subsistence wage rate is $2.20. According to the classical theory of growth, which of the following describes subsequent events in the economy?

Which of following was a period of below- average economic growth in the United States?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

-In the above figure, suppose the economy is initially on LD₀and LS₀. As a result of an increase in technology, classical growth theory predicts