Question 1

How will an increase in physical capital affect labor productivity, labor demand, and potential GDP?

Accepted Answer

An increase in capital increases labor p

Question 2

Which one of the following statements about growth theories is correct?

Accepted Answer

A)  In neoclassical growth theory, technological progress is the result of rapid increases in saving and investment in capital per person. 
B)  In classical growth theory, real GDP per person is unrelated to the subsistence wage rate. 
C)  In classical growth theory physical resources are unlimited. 
D)  In the new growth theory, knowledge is not subject to diminishing returns. 
A)  In neoclassical growth theory, technological progress is the result of rapid increases in saving and investment in capital per person. 
B)  In classical growth theory, real GDP per person is unrelated to the subsistence wage rate. 
C)  In classical growth theory physical resources are unlimited. 
D)  In the new growth theory, knowledge is not subject to diminishing returns.

Question 3

If the price level rises by 5 percent and workers' money wage rates remain constant, firms'

Accepted Answer

A)  quantity of labor demanded will decrease. 
B)  supply of jobs will decrease. 
C)  quantity of labor demanded will increase. 
D)  None of the above answers are correct. 
A)  quantity of labor demanded will decrease. 
B)  supply of jobs will decrease. 
C)  quantity of labor demanded will increase. 
D)  None of the above answers are correct.

Question 4

"IT Policy Can Spur Economic Growth, Industry Says"
As staffers on Capitol Hill know all too well, the growth of technology has created an economy increasingly reliant on energy consumption, as BlackBerrys, laptops, and other devices become ever necessities. The right policies, however, can make IT growth a part of the energy solution rather tha problem, IT representatives said Monday at a forum, in a congressional office, hosted by the Inform Technology & Innovation Foundation.
Information technology could reduce the expected growth in carbon emissions by one third over 10 said Daniel Castro, a senior analyst with the ITIF.
Information and communication technology has "great promise in driving economic growth as well reducing emissions," added David Isaacs, director of government affairs for Hewlett- Packard, but "policy should drive these results."
News.cnet.com 11/17/20
In order to drive economic growth in real GDP per person, the changes in information technology t article addresses must

Accepted Answer

A)  cause a movement along the aggregate production function. 
B)  increase labor supply. 
C)  decrease the demand for labor. 
D)  increase labor productivity. 
A)  cause a movement along the aggregate production function. 
B)  increase labor supply. 
C)  decrease the demand for labor. 
D)  increase labor productivity.

Question 5

Using growth accounting, technological change is calculated as the

Accepted Answer

A)  growth of capital utilization. 
B)  change in output per unit of labor. 
C)  difference between potential and actual economic growth. 
D)  growth in labor productivity not explained by the growth capital per hour of labor. 
A)  growth of capital utilization. 
B)  change in output per unit of labor. 
C)  difference between potential and actual economic growth. 
D)  growth in labor productivity not explained by the growth capital per hour of labor.

Question 6

-In the above figure, suppose the economy is initially on LD0 and LS0. According to the classical growth theory, an advance in technology would initially

Accepted Answer

A)  increase the subsistence real wage rate. 
B)  increase the population. 
C)  shift the LS curve from LS0 to LS1. 
D)  increase the real wage rate. 
A)  increase the subsistence real wage rate. 
B)  increase the population. 
C)  shift the LS curve from LS0 to LS1. 
D)  increase the real wage rate.

Question 7

A decrease in population shifts the

Accepted Answer

A)  labor supply curve leftward 
B)  labor demand curve leftward. 
C)  labor demand curve rightward. 
D)  labor supply curve rightward. 
A)  labor supply curve leftward 
B)  labor demand curve leftward. 
C)  labor demand curve rightward. 
D)  labor supply curve rightward.

Question 8

Full employment corresponds to

Accepted Answer

A)  being at the point where the marginal product of labor equals zero. 
B)  equilibrium in the labor market, with real GDP being equal to potential GDP. 
C)  equilibrium in the labor market, and real GDP exceeding potential GDP. 
D)  labor demand being greater than labor supply and real GDP being equal to potential GDP. 
A)  being at the point where the marginal product of labor equals zero. 
B)  equilibrium in the labor market, with real GDP being equal to potential GDP. 
C)  equilibrium in the labor market, and real GDP exceeding potential GDP. 
D)  labor demand being greater than labor supply and real GDP being equal to potential GDP.

Question 9

Along the aggregate production function, as the quantity of labor rises, real GDP

Accepted Answer

A)  falls 
B)  rises 
C)  may fall, rise, or stay the same 
D)  stays the same 
A)  falls 
B)  rises 
C)  may fall, rise, or stay the same 
D)  stays the same

Question 10

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

Accepted Answer

A) True 
 B)False

Question 11

Suppose capital per hour of labor grows at 3.0 percent per year and the growth rate of real GDP per hour of labor is 2.0 percent per year. Thus technological change leads to _ percent per year change in real GDP per hour of labor.

Accepted Answer

A)  4.0 
B)  3.0 
C)  1.0 
D)  5.0 
A)  4.0 
B)  3.0 
C)  1.0 
D)  5.0

Question 12

Assume that capital per hour of labor grows 4 percent and real GDP per hour of labor grows 3 percent. According to the one- third rule, what part of the 3 percent growth of real GDP per hour of labor is attributable to the growth of capital?

Accepted Answer

A)  1.33 percentage point 
B)  1 percentage point 
C)  1.67 percentage point 
D)  2.67 percentage points 
A)  1.33 percentage point 
B)  1 percentage point 
C)  1.67 percentage point 
D)  2.67 percentage points

Question 13

What are the basic arguments of the neoclassical growth theory?

Accepted Answer

The neoclassical growth theory explains

Question 14

What is the effect on real GDP per person if labor productivity increases?

Accepted Answer

Real GDP equals (aggregate hours) × (lab

Question 15

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

Accepted Answer

Labor productivity is (real GD

Question 16

If new capital increases labor productivity, the supply of labor and the demand for labor
)

Accepted Answer

A)  increases; decreases 
B)  stays the same; increases 
C)  increases; increases 
D)  decreases; stays the same 
A)  increases; decreases 
B)  stays the same; increases 
C)  increases; increases 
D)  decreases; stays the same

Question 17

Neoclassical growth theory assumes that technological progress

Accepted Answer

A)  is determined by investment. 
B)  responds to economic incentives. 
C)  is determined by saving. 
D)  is a purely chance event. 
A)  is determined by investment. 
B)  responds to economic incentives. 
C)  is determined by saving. 
D)  is a purely chance event.

Question 18

Productivity growth

Accepted Answer

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

Question 19

The one- third rule predicts that if capital per hour of labor increases by 6 percent and real GDP per hour of labor increases by 6 percent, then the increase in capital per hour of labor increases real GDP per hour of labor by and technological change increases real GDP per hour of labor by .

Accepted Answer

A)  6 percent; 0 percent 
B)  4 percent; 2 percent 
C)  0 percent; 6 percent 
D)  2 percent; 4 percent 
A)  6 percent; 0 percent 
B)  4 percent; 2 percent 
C)  0 percent; 6 percent 
D)  2 percent; 4 percent

Question 20

The classical growth theory's view of the economy and its ability to achieve growth can be compared to a perpetual motion machine.

Accepted Answer

A) True 
 B)False

How will an increase in physical capital affect labor productivity, labor demand, and potential GDP?

Which one of the following statements about growth theories is correct?

If the price level rises by 5 percent and workers' money wage rates remain constant, firms'

Using growth accounting, technological change is calculated as the

-In the above figure, suppose the economy is initially on LD₀and LS₀. According to the classical growth theory, an advance in technology would initially

A decrease in population shifts the

Full employment corresponds to

Along the aggregate production function, as the quantity of labor rises, real GDP

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

Suppose capital per hour of labor grows at 3.0 percent per year and the growth rate of real GDP per hour of labor is 2.0 percent per year. Thus technological change leads to _ percent per year change in real GDP per hour of labor.

Assume that capital per hour of labor grows 4 percent and real GDP per hour of labor grows 3 percent. According to the one- third rule, what part of the 3 percent growth of real GDP per hour of labor is attributable to the growth of capital?

What are the basic arguments of the neoclassical growth theory?

What is the effect on real GDP per person if labor productivity increases?

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

If new capital increases labor productivity, the supply of labor and the demand for labor )

Neoclassical growth theory assumes that technological progress

Productivity growth

The one- third rule predicts that if capital per hour of labor increases by 6 percent and real GDP per hour of labor increases by 6 percent, then the increase in capital per hour of labor increases real GDP per hour of labor by and technological change increases real GDP per hour of labor by .

The classical growth theory's view of the economy and its ability to achieve growth can be compared to a perpetual motion machine.

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

How will an increase in physical capital affect labor productivity, labor demand, and potential GDP?

Which one of the following statements about growth theories is correct?

If the price level rises by 5 percent and workers' money wage rates remain constant, firms'

Using growth accounting, technological change is calculated as the

-In the above figure, suppose the economy is initially on LD0 and LS0. According to the classical growth theory, an advance in technology would initially

A decrease in population shifts the

Full employment corresponds to

Along the aggregate production function, as the quantity of labor rises, real GDP

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

Suppose capital per hour of labor grows at 3.0 percent per year and the growth rate of real GDP per hour of labor is 2.0 percent per year. Thus technological change leads to _ percent per year change in real GDP per hour of labor.

Assume that capital per hour of labor grows 4 percent and real GDP per hour of labor grows 3 percent. According to the one- third rule, what part of the 3 percent growth of real GDP per hour of labor is attributable to the growth of capital?

What are the basic arguments of the neoclassical growth theory?

What is the effect on real GDP per person if labor productivity increases?

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

If new capital increases labor productivity, the supply of labor and the demand for labor )

Neoclassical growth theory assumes that technological progress

Productivity growth

The one- third rule predicts that if capital per hour of labor increases by 6 percent and real GDP per hour of labor increases by 6 percent, then the increase in capital per hour of labor increases real GDP per hour of labor by and technological change increases real GDP per hour of labor by .

The classical growth theory's view of the economy and its ability to achieve growth can be compared to a perpetual motion machine.

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. According to the classical growth theory, an advance in technology would initially