Question 1

Labor productivity is

Accepted Answer

A)  the average amount of real GDP produced per hour of labor. 
B)  the rate of change in the amount of real GDP produced per hour of labor. 
C)  the average amount of real GDP produced per worker times the number of workers. 
D)  the average amount of real GDP produced per worker times the number of people. 
A)  the average amount of real GDP produced per hour of labor. 
B)  the rate of change in the amount of real GDP produced per hour of labor. 
C)  the average amount of real GDP produced per worker times the number of workers. 
D)  the average amount of real GDP produced per worker times the number of people.

Question 2

Slowdoniaʹs current growth rate of real GDP per person is 2 percent a year. How long will it take to double real GDP per person?

Accepted Answer

A)  35 years 
B)  approximately 10 years 
C)  28.6 years 
D)  half a year 
A)  35 years 
B)  approximately 10 years 
C)  28.6 years 
D)  half a year

Question 3

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

Accepted Answer

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

Question 4

Because of the choices people make in the pursuit of profit, new growth theory argues that

Accepted Answer

A)  technology growth slows down in the long -run. 
B)  population growth increases will bring real GDP per person back to subsistence level. 
C)  the economy can enjoy persisting economic growth. 
D)  the capital stock experiences diminishing returns. 
A)  technology growth slows down in the long -run. 
B)  population growth increases will bring real GDP per person back to subsistence level. 
C)  the economy can enjoy persisting economic growth. 
D)  the capital stock experiences diminishing returns.

Question 5

Over the past 100 years real GDP per person in the United States, on average, has

Accepted Answer

A)  increased by about 5 percent per year. 
B)  increased by about 10 percent per year. 
C)  increased by about 2 percent per year. 
D)  decreased by about 5 percent per year. 
A)  increased by about 5 percent per year. 
B)  increased by about 10 percent per year. 
C)  increased by about 2 percent per year. 
D)  decreased by about 5 percent per year.

Question 6

The table below shows data for China.
$$\begin{array} { | l | c | c | l | } 
\hline & \begin{array} { l } 
\text { Population } \
\text { (millions) }
\end{array} & \begin{array} { l } 
\text { Real GDP } \
\text { (yuan, billions) }
\end{array} & \begin{array} { l } 
\text { Nominal GDP } \
\text { (yuan, billions) }
\end{array} \
\hline 2000 & 1267 & 4999 & 9921 \
\hline 2003 & 1292 & 6498 & 13582 \
\hline 2006 & 1315 & 8776 & 21087 \
\hline
\end{array}$$
The standard of living between 2003 and 2006 increased by .

Accepted Answer

A)  1.8 percent 
B)  35 percent 
C)  55.3 percent 
D)  32.7 percent 
A)  1.8 percent 
B)  35 percent 
C)  55.3 percent 
D)  32.7 percent

Question 7

Which of the following statements regarding human capital is INCORRECT ?

Accepted Answer

A)  Writing and mathematics, the most basic of human skills, are crucial elements in economic progress. 
B)  The accumulation of human capital is the source of both increased productivity and technological advance. 
C)  Human capital is the accumulated skill and knowledge of human beings. 
D)  Education is the only vehicle for the creation of human capital because training simply reinforces what has already been learned. 
A)  Writing and mathematics, the most basic of human skills, are crucial elements in economic progress. 
B)  The accumulation of human capital is the source of both increased productivity and technological advance. 
C)  Human capital is the accumulated skill and knowledge of human beings. 
D)  Education is the only vehicle for the creation of human capital because training simply reinforces what has already been learned.

Question 8

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

Accepted Answer

A)  10 years 
B)  2 years 
C)  1 year 
D)  49 years 
A)  10 years 
B)  2 years 
C)  1 year 
D)  49 years

Question 9

According to the new growth theory

Accepted Answer

A)  knowledge is not subject to diminishing returns. 
B)  the rate of technological progress is determined by chance. 
C)  the labor demand curve does not shift rightward over time. 
D)  the concept of a labor market is not necessary. 
A)  knowledge is not subject to diminishing returns. 
B)  the rate of technological progress is determined by chance. 
C)  the labor demand curve does not shift rightward over time. 
D)  the concept of a labor market is not necessary.

Question 10

New growth theory proposes that real GDP per person grows because of and that growth_________ .

Accepted Answer

A)  the pursuit of profit; can persist indefinitely 
B)  technological change; can only increase above the subsistence level temporarily 
C)  productivity shocks; occurs randomly 
D)  productivity shocks; can persist indefinitely 
A)  the pursuit of profit; can persist indefinitely 
B)  technological change; can only increase above the subsistence level temporarily 
C)  productivity shocks; occurs randomly 
D)  productivity shocks; can persist indefinitely

Question 11

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

Accepted Answer

A) True 
 B)False

Question 12

An increase in labor productivity shifts the labor ________curve _________.

Accepted Answer

A)  demand; leftward 
B)  supply; leftward 
C)  supply; rightward 
D)  demand; rightward 
A)  demand; leftward 
B)  supply; leftward 
C)  supply; rightward 
D)  demand; rightward

Question 13

According to the neoclassical growth theory,

Accepted Answer

A)  forces other than GDP growth determine population growth. 
B)  higher saving rates generate permanently faster growth in GDP per person. 
C)  increases in labor productivity are only temporary. 
D)  technological change depends on peopleʹs choices. 
A)  forces other than GDP growth determine population growth. 
B)  higher saving rates generate permanently faster growth in GDP per person. 
C)  increases in labor productivity are only temporary. 
D)  technological change depends on peopleʹs choices.

Question 14

A decrease in the real wage rate

Accepted Answer

A)  shifts the labor supply curve leftward. 
B)  shifts the labor demand curve rightward. 
C)  shifts the labor demand curve leftward. 
D)  none of the above because a change in the real wage rate does not shift either the labor demand or labor supply curve. 
A)  shifts the labor supply curve leftward. 
B)  shifts the labor demand curve rightward. 
C)  shifts the labor demand curve leftward. 
D)  none of the above because a change in the real wage rate does not shift either the labor demand or labor supply curve.

Question 15

-In the above figure, if the real wage is $20 per hour, a labor

Accepted Answer

A)  surplus will occur and the real wage will fall. 
B)  surplus will occur and the real wage will rise. 
C)  shortage will occur and the real wage will rise. 
D)  shortage will occur and the real wage will fall. 
A)  surplus will occur and the real wage will fall. 
B)  surplus will occur and the real wage will rise. 
C)  shortage will occur and the real wage will rise. 
D)  shortage will occur and the real wage will fall.

Question 16

Neoclassical growth theory predicts that

Accepted Answer

A)  growth in real GDP can continue indefinitely. 
B)  growth in real GDP can increase without any increase in investment. 
C)  advances in technology increase the productivity of capital, which leads to an increase in investment and rising real GDP per person. 
D)  advances in technology are a result of discoveries motivated by the pursuit of profits. 
A)  growth in real GDP can continue indefinitely. 
B)  growth in real GDP can increase without any increase in investment. 
C)  advances in technology increase the productivity of capital, which leads to an increase in investment and rising real GDP per person. 
D)  advances in technology are a result of discoveries motivated by the pursuit of profits.

Question 17

In addition to saving and investment in capital, making an even larger contribution to long -term economic growth in real GDP per person

Accepted Answer

A)  is a larger work force. 
B)  is higher current consumption. 
C)  is lower current consumption. 
D)  are technological advances. 
A)  is a larger work force. 
B)  is higher current consumption. 
C)  is lower current consumption. 
D)  are technological advances.

Question 18

$$\begin{array} { | l | l | l | } 
\hline \begin{array} { c } 
\text { Real wage rate } \
\text { (2005 dollars) }
\end{array} & \begin{array} { l } 
\text { Labordemand } \
\text { (billions of } \
\text { hours peryear) }
\end{array} & \begin{array} { l } 
\text { Labor supply } \
\text { (billions of } \
\text { hours per year) }
\end{array} \
\hline 5 & 360 & 260 \
\hline 10 & 325 & 275 \
\hline 15 & 300 & 300 \
\hline 20 & 280 & 330 \
\hline
\end{array}$$ 
 $\begin{array}{|l|l|}
\hline \text { Employment } & \text { Real GDF } \
\text { (billions of } & \text { (trillions of } \
\text { hours per year) } & 2005 \text { dollars) }\
\hline 100 & 20 \
\hline 200 & 3.0 \
\hline 300 & 3.8 \
\hline 400 & 4.4 \
\hline
\end{array}$
-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 must lie.

Accepted Answer

a) The equilibrium real wage rate is $15

Question 19

Which of the following policies improves prospects for more rapid economic growth?

Accepted Answer

A)  policies to increase the educational attainment of the labor force 
B)  encouragement of political instability 
C)  limitations on international trade 
D)  policies to increase government expenditure 
A)  policies to increase the educational attainment of the labor force 
B)  encouragement of political instability 
C)  limitations on international trade 
D)  policies to increase government expenditure

Question 20

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. Armeniaʹs real GDP per person in 2009 was

Accepted Answer

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

Labor productivity is

Slowdoniaʹs current growth rate of real GDP per person is 2 percent a year. How long will it take to double real GDP per person?

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

Because of the choices people make in the pursuit of profit, new growth theory argues that

Over the past 100 years real GDP per person in the United States, on average, has

The table below shows data for China. Population (millions) Real GDP (yuan, billions) Nominal GDP (yuan, billions) 2000 1267 4999 9921 2003 1292 6498 13582 2006 1315 8776 21087 The standard of living between 2003 and 2006 increased by .

Which of the following statements regarding human capital is INCORRECT ?

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

According to the new growth theory

New growth theory proposes that real GDP per person grows because of and that growth_________ .

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

An increase in labor productivity shifts the labor curve _.

According to the neoclassical growth theory,

A decrease in the real wage rate

-In the above figure, if the real wage is $20 per hour, a labor

Neoclassical growth theory predicts that

In addition to saving and investment in capital, making an even larger contribution to long -term economic growth in real GDP per person

Which of the following policies improves prospects for more rapid economic growth?

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. Armeniaʹs real GDP per person in 2009 was

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 6: Economic Growth

Labor productivity is

Slowdoniaʹs current growth rate of real GDP per person is 2 percent a year. How long will it take to double real GDP per person?

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

Because of the choices people make in the pursuit of profit, new growth theory argues that

Over the past 100 years real GDP per person in the United States, on average, has

The table below shows data for China. Population (millions) Real GDP (yuan, billions) Nominal GDP (yuan, billions) 2000 1267 4999 9921 2003 1292 6498 13582 2006 1315 8776 21087 The standard of living between 2003 and 2006 increased by .

Which of the following statements regarding human capital is INCORRECT ?

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

According to the new growth theory

New growth theory proposes that real GDP per person grows because of and that growth_________ .

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

An increase in labor productivity shifts the labor ________curve _________.

According to the neoclassical growth theory,

A decrease in the real wage rate

-In the above figure, if the real wage is $20 per hour, a labor

Neoclassical growth theory predicts that

In addition to saving and investment in capital, making an even larger contribution to long -term economic growth in real GDP per person

Which of the following policies improves prospects for more rapid economic growth?

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. Armeniaʹs real GDP per person in 2009 was

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

An increase in labor productivity shifts the labor curve _.