Question 1

The more education that workers have, the is their human capital and _ _ is their productivity.

Accepted Answer

A)  larger; smaller 
B)  larger; higher 
C)  smaller; smaller 
D)  smaller; larger 
A)  larger; smaller 
B)  larger; higher 
C)  smaller; smaller 
D)  smaller; larger

Question 2

In neoclassical growth theory, technological change .

Accepted Answer

A)  is influenced by population growth 
B)  is influenced by the rate of economic growth 
C)  occurs by chance 
D)  occurs at a steady rate 
A)  is influenced by population growth 
B)  is influenced by the rate of economic growth 
C)  occurs by chance 
D)  occurs at a steady rate

Question 3

Economic growth is measured by

Accepted Answer

A)  changes in nominal GDP. 
B)  changes in real GDP. 
C)  changes in the employment rate. 
D)  All of the above are used to measure economic growth. 
A)  changes in nominal GDP. 
B)  changes in real GDP. 
C)  changes in the employment rate. 
D)  All of the above are used to measure economic growth.

Question 4

An assumption of neoclassical growth theory is that

Accepted Answer

A)  more growth encourages more technological change. 
B)  technological change is random. 
C)  technological change can be influenced by savings. 
D)  None of the above answers is correct. 
A)  more growth encourages more technological change. 
B)  technological change is random. 
C)  technological change can be influenced by savings. 
D)  None of the above answers is correct.

Question 5

Classical growth theory states that

Accepted Answer

A)  growth is maximized when everyone is fully employed. 
B)  advances in technology will always insure a permanent increase in real GDP per person. 
C)  growth is easy in the beginning but difficult in the later stages. 
D)  growth is followed by increases in the population, eventually leaving real GDP per person unchanged. 
A)  growth is maximized when everyone is fully employed. 
B)  advances in technology will always insure a permanent increase in real GDP per person. 
C)  growth is easy in the beginning but difficult in the later stages. 
D)  growth is followed by increases in the population, eventually leaving real GDP per person unchanged.

Question 6

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.
a) What is the equilibrium real wage rate and the level of employment?
b) What is potential GDP? If you cannot determine a precise amount, give the range in which potential GDP m

Accepted Answer

a) The equilibrium real wage rate is $15

Question 7

An aggregate production function shows the relationship between

Accepted Answer

A)  real GDP and leisure. 
B)  leisure and unemployment. 
C)  real GDP and the quantity of labor employed. 
D)  real GDP and unemployment. 
A)  real GDP and leisure. 
B)  leisure and unemployment. 
C)  real GDP and the quantity of labor employed. 
D)  real GDP and unemployment.

Question 8

is the knowledge and skill that people have obtained from education and on- the- job training.

Accepted Answer

A)  Capital 
B)  Labor productivity 
C)  Human capital 
D)  Technology 
A)  Capital 
B)  Labor productivity 
C)  Human capital 
D)  Technology

Question 9

Over the last 100 years, the average U.S. growth rate in real GDP per person was about

Accepted Answer

A)  12.5 percent per year. 
B)  2 percent per year. 
C)  1 percent per year. 
D)  6 percent per year. 
A)  12.5 percent per year. 
B)  2 percent per year. 
C)  1 percent per year. 
D)  6 percent per year.

Question 10

Use the table below to answer this question. The data show national savings rates as a percentage of GDP; the growth rate of real GDP per person; and birth rates in 2006.   www.econstats.com; www.os- connect.com
If the data support the neoclassical growth theory, we would expect to see

Accepted Answer

A)  the United States with the highest economic growth rate because a lower savings rate means more income is spent on consumption. 
B)  Canada with the highest economic growth rate because it has the highest real GDP per person. 
C)  the United States with the highest economic growth rate because it has the highest birth rate. 
D)  Japan with the highest economic growth rate because the high saving means that more capital is accumulated. 
A)  the United States with the highest economic growth rate because a lower savings rate means more income is spent on consumption. 
B)  Canada with the highest economic growth rate because it has the highest real GDP per person. 
C)  the United States with the highest economic growth rate because it has the highest birth rate. 
D)  Japan with the highest economic growth rate because the high saving means that more capital is accumulated.

Question 11

Which of the following is used to calculate the standard of living?

Accepted Answer

A)  real GDP/population 
B)  real GDP/aggregate hours 
C)  the one- third rule 
D)  ((real GDP in the current year - real GDP in previous year)/real GDP in previous year) x 100 
A)  real GDP/population 
B)  real GDP/aggregate hours 
C)  the one- third rule 
D)  ((real GDP in the current year - real GDP in previous year)/real GDP in previous year) x 100

Question 12

The aggregate production function shows that an economy increases its real GDP in the short run by

Accepted Answer

A)  using more labor. 
B)  increasing its physical capital stock. 
C)  exploring for new deposits of natural resources. 
D)  developing new technologies. 
A)  using more labor. 
B)  increasing its physical capital stock. 
C)  exploring for new deposits of natural resources. 
D)  developing new technologies.

Question 13

Why was there a slowdown in productivity growth in the 1970s?

Accepted Answer

A)  Workers had less capital to work with than in previous decades. 
B)  The labor force engaged in less education and training in the 1970s. 
C)  The energy price increases caused research efforts to be directed at saving energy rather than increasing productivity. 
D)  The oil crisis in the 1970s decreased aggregate demand. 
A)  Workers had less capital to work with than in previous decades. 
B)  The labor force engaged in less education and training in the 1970s. 
C)  The energy price increases caused research efforts to be directed at saving energy rather than increasing productivity. 
D)  The oil crisis in the 1970s decreased aggregate demand.

Question 14

What is the real wage rate?

Accepted Answer

The real wage rate is the nominal wage r

Question 15

In 2006, capital per hour of labor was $250 and real GDP per hour of labor was $50. In 2007, real GDP per hour of labor was $55. If there was no change in technology between 2006 and 2007, then capital per hour of labor in 2007 was .

Accepted Answer

A)  $275 
B)  $252 
C)  $325 
D)  $280 
A)  $275 
B)  $252 
C)  $325 
D)  $280

Question 16

The aggregate production function describes the relationship between

Accepted Answer

A)  real GDP and the price level. 
B)  real GDP and the unemployment rate. 
C)  the rate of growth of real GDP and inflation. 
D)  real GDP and the quantity of labor employed. 
A)  real GDP and the price level. 
B)  real GDP and the unemployment rate. 
C)  the rate of growth of real GDP and inflation. 
D)  real GDP and the quantity of labor employed.

Question 17

If the price level rises by 3 percent and workers' money wages increase by 3 percent, then the

Accepted Answer

A)  quantity of labor demand will increase. 
B)  quantity of labor demand will decrease. 
C)  quantity of labor demanded does not change because there is no change in the real wage rate. 
D)  Any of the above could occur depending on the magnitude on the dollar increase in the price level versus the dollar increase in the wage rate. 
A)  quantity of labor demand will increase. 
B)  quantity of labor demand will decrease. 
C)  quantity of labor demanded does not change because there is no change in the real wage rate. 
D)  Any of the above could occur depending on the magnitude on the dollar increase in the price level versus the dollar increase in the wage rate.

Question 18

The relationship between education and economic growth can best be summarized by saying that

Accepted Answer

A)  education has benefits beyond those who receive the education, which encourages economic growth. 
B)  educated people are less apt to consume goods that deplete economic resources, which encourages economic growth. 
C)  educational expenditures tend to be inflationary, which discourages economic growth. 
D)  educational expenditures tend to divert funds from productive investments, which discourages economic growth. 
A)  education has benefits beyond those who receive the education, which encourages economic growth. 
B)  educated people are less apt to consume goods that deplete economic resources, which encourages economic growth. 
C)  educational expenditures tend to be inflationary, which discourages economic growth. 
D)  educational expenditures tend to divert funds from productive investments, which discourages economic growth.

Question 19

Discuss the aggregate production function. How does the aggregate production function relate to the labor market and potential GDP?

Accepted Answer

The aggregate production function shows

Question 20

Neoclassical growth theory is based on the proposition that real GDP per person grows when

Accepted Answer

A)  saving decreases. 
B)  the population growth rate increases. 
C)  technological advances occur. 
D)  the population growth rate decreases. 
A)  saving decreases. 
B)  the population growth rate increases. 
C)  technological advances occur. 
D)  the population growth rate decreases.

The more education that workers have, the is their human capital and _ _ is their productivity.

In neoclassical growth theory, technological change .

Economic growth is measured by

An assumption of neoclassical growth theory is that

Classical growth theory states that

An aggregate production function shows the relationship between

is the knowledge and skill that people have obtained from education and on- the- job training.

Over the last 100 years, the average U.S. growth rate in real GDP per person was about

Use the table below to answer this question. The data show national savings rates as a percentage of GDP; the growth rate of real GDP per person; and birth rates in 2006. www.econstats.com; www.os- connect.com If the data support the neoclassical growth theory, we would expect to see

Which of the following is used to calculate the standard of living?

The aggregate production function shows that an economy increases its real GDP in the short run by

Why was there a slowdown in productivity growth in the 1970s?

What is the real wage rate?

In 2006, capital per hour of labor was $250 and real GDP per hour of labor was $50. In 2007, real GDP per hour of labor was $55. If there was no change in technology between 2006 and 2007, then capital per hour of labor in 2007 was .

The aggregate production function describes the relationship between

If the price level rises by 3 percent and workers' money wages increase by 3 percent, then the

The relationship between education and economic growth can best be summarized by saying that

Discuss the aggregate production function. How does the aggregate production function relate to the labor market and potential GDP?

Neoclassical growth theory is based on the proposition that real GDP per person grows when

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

The more education that workers have, the is their human capital and _ _ is their productivity.

In neoclassical growth theory, technological change .

Economic growth is measured by

An assumption of neoclassical growth theory is that

Classical growth theory states that

An aggregate production function shows the relationship between

is the knowledge and skill that people have obtained from education and on- the- job training.

Over the last 100 years, the average U.S. growth rate in real GDP per person was about

Use the table below to answer this question. The data show national savings rates as a percentage of GDP; the growth rate of real GDP per person; and birth rates in 2006. www.econstats.com; www.os- connect.com If the data support the neoclassical growth theory, we would expect to see

Which of the following is used to calculate the standard of living?

The aggregate production function shows that an economy increases its real GDP in the short run by

Why was there a slowdown in productivity growth in the 1970s?

What is the real wage rate?

In 2006, capital per hour of labor was $250 and real GDP per hour of labor was $50. In 2007, real GDP per hour of labor was $55. If there was no change in technology between 2006 and 2007, then capital per hour of labor in 2007 was .

The aggregate production function describes the relationship between

If the price level rises by 3 percent and workers' money wages increase by 3 percent, then the

The relationship between education and economic growth can best be summarized by saying that

Discuss the aggregate production function. How does the aggregate production function relate to the labor market and potential GDP?

Neoclassical growth theory is based on the proposition that real GDP per person grows when

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