Question 1

Which of the following is consistent with the classical theory of growth?

Accepted Answer

A)  permanent increases in living standards 
B)  permanent increases in real wages 
C)  permanent growth in productivity 
D)  rapid population growth in poor countries 
A)  permanent increases in living standards 
B)  permanent increases in real wages 
C)  permanent growth in productivity 
D)  rapid population growth in poor countries

Question 2

Which of the following is TRUE regarding the real wage rate? The real wage rate
I. equals 100 × (money wage)/(price level).
II. measures the quantity of goods and services an hour's work can buy.

Accepted Answer

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

Question 3

An advance in technology increases the productivity of labor. As a result, the nation's production function shifts and the labor curve shifts rightward.

Accepted Answer

A)  upward; demand for 
B)  upward; supply of 
C)  downward; demand for 
D)  downward; supply of 
A)  upward; demand for 
B)  upward; supply of 
C)  downward; demand for 
D)  downward; supply of

Question 4

If the money wage rate is $10.00 per hour and the price level is 60, the real wage rate is

Accepted Answer

A)  $18.75 per hour. 
B)  $10.00 per hour. 
C)  $12.50 per hour. 
D)  $16.67 per hour. 
A)  $18.75 per hour. 
B)  $10.00 per hour. 
C)  $12.50 per hour. 
D)  $16.67 per hour.

Question 5

In new growth theory, does not experience diminishing returns.

Accepted Answer

A)  the marginal product of labor 
B)  the demand for labor 
C)  knowledge capital 
D)  the demand for capital 
A)  the marginal product of labor 
B)  the demand for labor 
C)  knowledge capital 
D)  the demand for capital

Question 6

Looking at the world between 1960 to 2008, over these 48 years we see that

Accepted Answer

A)  the nations of Africa had the fastest economic growth rate. 
B)  of the rich industrial countries, Japan grew the fastest. 
C)  of the rich industrial nations, Canada grew the fastest. 
D)  of the rich industrial countries, Japan grew the slowest. 
A)  the nations of Africa had the fastest economic growth rate. 
B)  of the rich industrial countries, Japan grew the fastest. 
C)  of the rich industrial nations, Canada grew the fastest. 
D)  of the rich industrial countries, Japan grew the slowest.

Question 7

Greater labor force participation for households at higher real wage rate is one reason that

Accepted Answer

A)  the supply of labor curve is upward sloping. 
B)  the demand for labor curve is downward sloping. 
C)  the supply of labor curve is downward sloping. 
D)  the demand for labor curve is upward sloping. 
A)  the supply of labor curve is upward sloping. 
B)  the demand for labor curve is downward sloping. 
C)  the supply of labor curve is downward sloping. 
D)  the demand for labor curve is upward sloping.

Question 8

In 2005, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98 million. In 2006, real GDP was $4.59 billion and population was 2.97 million.
-In 2008, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98 million. In 2009, real GDP was $4.59 billion and population was 2.97 million. Armenia's real GDP per person in 2009 was

Accepted Answer

A)  $132 
B)  $1,545 
C)  $380 
D)  $1,413 
A)  $132 
B)  $1,545 
C)  $380 
D)  $1,413

Question 9

-In the above figure, at a wage rate of $20 per hour,

Accepted Answer

A)  the labor demand curve will shift rightward. 
B)  there is a shortage of labor. 
C)  there is a surplus of labor. 
D)  the labor supply curve will shift rightward. 
A)  the labor demand curve will shift rightward. 
B)  there is a shortage of labor. 
C)  there is a surplus of labor. 
D)  the labor supply curve will shift rightward.

Question 10

Suppose a nation's population grows by 2 percent and, at the same time, its GDP grows by 5 percent. Approximately how fast will real GDP per person increase?

Accepted Answer

A)  2 percent per year 
B)  3 percent per year 
C)  5 
D)  10 percent per year 
A)  2 percent per year 
B)  3 percent per year 
C)  5 
D)  10 percent per year

Question 11

The real wage rate will fall if the

Accepted Answer

A)  labor supply curve shifts rightward and the labor demand curve does not shift. 
B)  labor demand curve shifts rightward more than the labor supply curve shifts rightward. 
C)  labor supply curve shifts leftward and the labor demand curve does not shift. 
D)  labor demand curve shifts rightward and the labor supply curve does not shift. 
A)  labor supply curve shifts rightward and the labor demand curve does not shift. 
B)  labor demand curve shifts rightward more than the labor supply curve shifts rightward. 
C)  labor supply curve shifts leftward and the labor demand curve does not shift. 
D)  labor demand curve shifts rightward and the labor supply curve does not shift.

Question 12

The real wage rate equals

Accepted Answer

A)  (100) × (price level)/(money wage rate). 
B)  (money wage) + (number of hours worked)/(price level). 
C)  (100) × (money wage rate)/(price level). 
D)  (money wage rate) × (price level). 
A)  (100) × (price level)/(money wage rate). 
B)  (money wage) + (number of hours worked)/(price level). 
C)  (100) × (money wage rate)/(price level). 
D)  (money wage rate) × (price level).

Question 13

If capital per hour of labor increases 6 percent and real GDP per hour of labor increases by 4 percent, then according to the one- third rule technological change

Accepted Answer

A)  accounted for 3 percent of the 6 percent growth. 
B)  accounted for 1/3 of the 4 percent growth. 
C)  accounted for 2 percent of the 4 percent growth. 
D)  was negative. 
A)  accounted for 3 percent of the 6 percent growth. 
B)  accounted for 1/3 of the 4 percent growth. 
C)  accounted for 2 percent of the 4 percent growth. 
D)  was negative.

Question 14

Productivity growth

Accepted Answer

A)  was high in the 1960s, slowed after 1973, and accelerated after 1983. 
B)  was constant from 1960 to the present. 
C)  consistently fell between 1960 and the present. 
D)  was low in the 1960s, speeded up after 1973, and slowed after 1983. 
A)  was high in the 1960s, slowed after 1973, and accelerated after 1983. 
B)  was constant from 1960 to the present. 
C)  consistently fell between 1960 and the present. 
D)  was low in the 1960s, speeded up after 1973, and slowed after 1983.

Question 15

If the price level rises faster than the money wage rate, the real wage rate falls.

Accepted Answer

A) True 
 B)False

Question 16

In neoclassical growth theory, technological progress is the key to continuous growth in labor productivity.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

Accepted Answer

A)  discoveries of new technology 
B)  investment in human capital 
C)  investment in new capital 
D)  resource conservation 
A)  discoveries of new technology 
B)  investment in human capital 
C)  investment in new capital 
D)  resource conservation

Question 18

The people of Palm Island are willing to work 80 hours a day for a real wage rate of $4 an hour. Then each dollar increase in the real wage, they are willing to work 10 additional hours a day. Palm Island's production possibiliti the table above.
a) Draw Palm Island's demand for labor curve.
b) Draw Palm Island's supply of labor curve.
c) What are the full- employment equilibrium real wage rate and quantity of labor in Palm Island's economy?
d) What is Palm Island's potential GDP?

Accepted Answer

quantity of labor employed. For example,

Question 19

The supply of labor curve

Accepted Answer

A)  is horizontal. 
B)  is vertical. 
C)  slopes downward. 
D)  slopes upward. 
A)  is horizontal. 
B)  is vertical. 
C)  slopes downward. 
D)  slopes upward.

Question 20

Separating the sources of economic growth is the purpose behind

Accepted Answer

A)  macroeconomics. 
B)  the production possibilities curve. 
C)  growth accounting. 
D)  the national income accounts. 
A)  macroeconomics. 
B)  the production possibilities curve. 
C)  growth accounting. 
D)  the national income accounts.

Which of the following is consistent with the classical theory of growth?

Which of the following is TRUE regarding the real wage rate? The real wage rate I. equals 100 × (money wage)/(price level). II. measures the quantity of goods and services an hour's work can buy.

An advance in technology increases the productivity of labor. As a result, the nation's production function shifts and the labor curve shifts rightward.

If the money wage rate is $10.00 per hour and the price level is 60, the real wage rate is

In new growth theory, does not experience diminishing returns.

Looking at the world between 1960 to 2008, over these 48 years we see that

Greater labor force participation for households at higher real wage rate is one reason that

-In the above figure, at a wage rate of $20 per hour,

Suppose a nation's population grows by 2 percent and, at the same time, its GDP grows by 5 percent. Approximately how fast will real GDP per person increase?

The real wage rate will fall if the

The real wage rate equals

If capital per hour of labor increases 6 percent and real GDP per hour of labor increases by 4 percent, then according to the one- third rule technological change

Productivity growth

If the price level rises faster than the money wage rate, the real wage rate falls.

In neoclassical growth theory, technological progress is the key to continuous growth in labor productivity.

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

The supply of labor curve

Separating the sources of economic growth is the purpose behind

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

Which of the following is consistent with the classical theory of growth?

Which of the following is TRUE regarding the real wage rate? The real wage rate I. equals 100 × (money wage)/(price level). II. measures the quantity of goods and services an hour's work can buy.

An advance in technology increases the productivity of labor. As a result, the nation's production function shifts and the labor curve shifts rightward.

If the money wage rate is $10.00 per hour and the price level is 60, the real wage rate is

In new growth theory, does not experience diminishing returns.

Looking at the world between 1960 to 2008, over these 48 years we see that

Greater labor force participation for households at higher real wage rate is one reason that

-In the above figure, at a wage rate of $20 per hour,

Suppose a nation's population grows by 2 percent and, at the same time, its GDP grows by 5 percent. Approximately how fast will real GDP per person increase?

The real wage rate will fall if the

The real wage rate equals

If capital per hour of labor increases 6 percent and real GDP per hour of labor increases by 4 percent, then according to the one- third rule technological change

Productivity growth

If the price level rises faster than the money wage rate, the real wage rate falls.

In neoclassical growth theory, technological progress is the key to continuous growth in labor productivity.

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

The supply of labor curve

Separating the sources of economic growth is the purpose behind

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