Question 1

All else equal, an increase in population decreases potential GDP.

Accepted Answer

A) True 
 B)False

Question 2

An advance in technology that increases productivity and an increase in the working-age population results in a

Accepted Answer

A)  rightward shift of the labor supply curve and of the labor demand curve. 
B)  rightward shift of the labor supply curve. 
C)  movement along the production function. 
D)  rightward shift of the labor demand curve. 
A)  rightward shift of the labor supply curve and of the labor demand curve. 
B)  rightward shift of the labor supply curve. 
C)  movement along the production function. 
D)  rightward shift of the labor demand curve.

Question 3

Population increases are the limiting factor in the growth process in

Accepted Answer

A)  neoclassical growth theory. 
B)  real growth theory. 
C)  classical growth theory. 
D)  the new growth theory. 
A)  neoclassical growth theory. 
B)  real growth theory. 
C)  classical growth theory. 
D)  the new growth theory.

Question 4

Classical growth theory states that

Accepted Answer

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

Question 5

If the price level rises by 5 percent and workersʹ money wage rates remain constant, firmsʹ

Accepted Answer

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

Question 6

If the price level increases and workersʹ money wage rates remain constant,which of the following will occur?
I. The quantity of labor supplied will decrease.
II. The real wage rate will decrease.
III. The labor supply curve will shift rightward.

Accepted Answer

A)  I and II 
B)  I only 
C)  II and III 
D)  I, II and III 
A)  I and II 
B)  I only 
C)  II and III 
D)  I, II and III

Question 7

ʺWhy India Cannot Sustain High Economic Growthʺ, by Kunal KumarKundu
In his article about Indiaʹs prospects for growth, the author notes that ʺPer capita availability of food grain is falling as population is growing faster than food grain production. Deplorable rural infrastructure leads to India wasting an amount of food grain Indiaʹs agriculture is still so very
Highly monsoon dependent. ʺ
If the author is suggesting that Indiaʹs growth prospects are explained by the classical growth theory, we also expect that

Accepted Answer

A)  the subsistence wage will increase. 
B)  labor productivity, which has risen in recent years, will eventually decline. 
C)  real GDP per worker will increase. 
D)  the economy will perpetually grow. 
A)  the subsistence wage will increase. 
B)  labor productivity, which has risen in recent years, will eventually decline. 
C)  real GDP per worker will increase. 
D)  the economy will perpetually grow.

Question 8

Workers who pursue an education directly increase their

Accepted Answer

A)  physical capital. 
B)  human capital. 
C)  saving. 
D)  financial capital. 
A)  physical capital. 
B)  human capital. 
C)  saving. 
D)  financial capital.

Question 9

If a nationʹs population grows, then,

Accepted Answer

A)  growth in real GDP per person will be greater than the growth of real GDP. 
B)  growth in real GDP per person will be less than the growth of real GDP. 
C)  there must be an increase in real GDP per person. 
D)  there can be no economic growth. 
A)  growth in real GDP per person will be greater than the growth of real GDP. 
B)  growth in real GDP per person will be less than the growth of real GDP. 
C)  there must be an increase in real GDP per person. 
D)  there can be no economic growth.

Question 10

Which of the following directly creates growth in labor productivity?
I. Growth in capital per hour of labor.
II. Technological change.
III. Population growth.

Accepted Answer

A)  II only 
B)  I and II 
C)  I only 
D)  I and III 
A)  II only 
B)  I and II 
C)  I only 
D)  I and III

Question 11

Which of the following statements about world growth during the last half of the 20th century is correct?

Accepted Answer

A)  Due to rapid growth, real GDP per person in China is now about 50 percent of that in the United States. 
B)  Real GDP per person in Hong Kong and Singapore are approaching or surpassing that in the United States. 
C)  Growth rates in South American countries have exceeded those in North America. 
D)  In every decade, Japan has experienced faster growth than the United States. 
A)  Due to rapid growth, real GDP per person in China is now about 50 percent of that in the United States. 
B)  Real GDP per person in Hong Kong and Singapore are approaching or surpassing that in the United States. 
C)  Growth rates in South American countries have exceeded those in North America. 
D)  In every decade, Japan has experienced faster growth than the United States.

Question 12

Employment and total) potential GDP increase if the

Accepted Answer

A)  labor demand curve shifts leftward and the labor supply curve does not shift. 
B)  labor demand curve shifts leftward more than the labor supply curve shifts rightward. 
C)  labor supply curve shifts rightward and the labor demand curve does not shift. 
D)  None of the above answers are correct. 
A)  labor demand curve shifts leftward and the labor supply curve does not shift. 
B)  labor demand curve shifts leftward more than the labor supply curve shifts rightward. 
C)  labor supply curve shifts rightward and the labor demand curve does not shift. 
D)  None of the above answers are correct.

Question 13

Which of the following is consistent with classical growth theory?

Accepted Answer

A)  As real GDP increases, there will be a decrease in the rate of population growth. 
B)  Real GDP per person will increase because technological change induces investment. 
C)  Competition destroys innovation and decreases profit. 
D)  Real GDP per person will never permanently increase. 
A)  As real GDP increases, there will be a decrease in the rate of population growth. 
B)  Real GDP per person will increase because technological change induces investment. 
C)  Competition destroys innovation and decreases profit. 
D)  Real GDP per person will never permanently increase.

Question 14

Which of the following is TRUE regarding the labor market?
I. The labor supply curve slopes upward because firms maximize profits as they hire more workers.
II. If the real wage rate falls, the quantity of labor firms demand increases.
III. The demand for labor curve slopes downward because as the real wage rate falls, workers demand to work fewer hours.

Accepted Answer

A)  II only 
B)  I and II 
C)  I and III 
D)  I, II and III 
A)  II only 
B)  I and II 
C)  I and III 
D)  I, II and III

Question 15

List and explain the factors that can increase labor productivity.

Accepted Answer

The three factors that can increase labo

Question 16

When the population increases with no change in labor productivity, employment and potential GDP .

Accepted Answer

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

Question 17

-In the above figure, if the real wage is $10 per hour, a labor

Accepted Answer

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

Question 18

Economic growth is measured by

Accepted Answer

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

Question 19

Since 1960, which of the following countries had average growth rates in real GDP per person higher than that of the United States?

Accepted Answer

A)  Hong Kong 
B)  South Korea 
C)  Singapore 
D)  All of the above answers are correct. 
A)  Hong Kong 
B)  South Korea 
C)  Singapore 
D)  All of the above answers are correct.

Question 20

According to new growth theory, technological change is driven by

Accepted Answer

A)  firmsʹ attempts to increase their profit. 
B)  foreign firmsʹ attempts to increase their sales in the domestic market. 
C)  government policies. 
D)  random chance. 
A)  firmsʹ attempts to increase their profit. 
B)  foreign firmsʹ attempts to increase their sales in the domestic market. 
C)  government policies. 
D)  random chance.

All else equal, an increase in population decreases potential GDP.

An advance in technology that increases productivity and an increase in the working-age population results in a

Population increases are the limiting factor in the growth process in

Classical growth theory states that

If the price level rises by 5 percent and workersʹ money wage rates remain constant, firmsʹ

If the price level increases and workersʹ money wage rates remain constant,which of the following will occur? I. The quantity of labor supplied will decrease. II. The real wage rate will decrease. III. The labor supply curve will shift rightward.

Workers who pursue an education directly increase their

If a nationʹs population grows, then,

Which of the following directly creates growth in labor productivity? I. Growth in capital per hour of labor. II. Technological change. III. Population growth.

Which of the following statements about world growth during the last half of the 20th century is correct?

Employment and total) potential GDP increase if the

Which of the following is consistent with classical growth theory?

List and explain the factors that can increase labor productivity.

When the population increases with no change in labor productivity, employment and potential GDP .

-In the above figure, if the real wage is $10 per hour, a labor

Economic growth is measured by

Since 1960, which of the following countries had average growth rates in real GDP per person higher than that of the United States?

According to new growth theory, technological change is driven by

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

All else equal, an increase in population decreases potential GDP.

An advance in technology that increases productivity and an increase in the working-age population results in a

Population increases are the limiting factor in the growth process in

Classical growth theory states that

If the price level rises by 5 percent and workersʹ money wage rates remain constant, firmsʹ

If the price level increases and workersʹ money wage rates remain constant,which of the following will occur? I. The quantity of labor supplied will decrease. II. The real wage rate will decrease. III. The labor supply curve will shift rightward.

Workers who pursue an education directly increase their

If a nationʹs population grows, then,

Which of the following directly creates growth in labor productivity? I. Growth in capital per hour of labor. II. Technological change. III. Population growth.

Which of the following statements about world growth during the last half of the 20th century is correct?

Employment and total) potential GDP increase if the

Which of the following is consistent with classical growth theory?

List and explain the factors that can increase labor productivity.

When the population increases with no change in labor productivity, employment and potential GDP .

-In the above figure, if the real wage is $10 per hour, a labor

Economic growth is measured by

Since 1960, which of the following countries had average growth rates in real GDP per person higher than that of the United States?

According to new growth theory, technological change is driven by

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