Question 1

Human capital is the

Accepted Answer

A)  technology used by humans to produce GDP. 
B)  plant and equipment produced by humans and not by machines. 
C)  skill and knowledge accumulated by humans. 
D)  machinery used by humans to produce GDP. 
A)  technology used by humans to produce GDP. 
B)  plant and equipment produced by humans and not by machines. 
C)  skill and knowledge accumulated by humans. 
D)  machinery used by humans to produce GDP.

Question 2

If both the supply of labor and the demand for labor increase, then

Accepted Answer

A)  potential GDP increases. 
B)  the real wage rate increases. 
C)  full employment decreases. 
D)  potential GDP decreases. 
A)  potential GDP increases. 
B)  the real wage rate increases. 
C)  full employment decreases. 
D)  potential GDP decreases.

Question 3

Which of the following contributes to an increase in labor productivity?

Accepted Answer

A)  increased consumption expenditure 
B)  increased capital stock 
C)  decreased investment 
D)  All of the above contribute to an increase in labor productivity. 
A)  increased consumption expenditure 
B)  increased capital stock 
C)  decreased investment 
D)  All of the above contribute to an increase in labor productivity.

Question 4

At the full-employment equilibrium in the labor market,

Accepted Answer

A)  the money wage rate equals the real wage rate. 
B)  there are no job vacancies. 
C)  there is no unemployment. 
D)  there is neither a shortage nor a surplus of labor. 
A)  the money wage rate equals the real wage rate. 
B)  there are no job vacancies. 
C)  there is no unemployment. 
D)  there is neither a shortage nor a surplus of labor.

Question 5

During 2011, the country of Economia had a real GDP of $115 billion and the population was 0.9 billion. In 2010, real GDP was 105 billion and the population was 0.85 billion. In 2010, real GDP per person was

Accepted Answer

A)  $117 
B)  $124 
C)  $128 
D)  $135 
A)  $117 
B)  $124 
C)  $128 
D)  $135

Question 6

A factor that turned out to be a weakness of the classical theory of growth is its

Accepted Answer

A)  reliance on constant growth in technology. 
B)  assumption that the growth rate of the population increases when income increases. 
C)  emphasis on saving and investment. 
D)  neglect of the subsistence real wage. 
A)  reliance on constant growth in technology. 
B)  assumption that the growth rate of the population increases when income increases. 
C)  emphasis on saving and investment. 
D)  neglect of the subsistence real wage.

Question 7

A key assumption of new growth theory is that

Accepted Answer

A)  higher incomes lead to a higher birth rate. 
B)  the population growth rate is lower than the real interest rate. 
C)  all technological change is the result of luck. 
D)  a successful innovator has the opportunity to earn a temporary, above -average profit. 
A)  higher incomes lead to a higher birth rate. 
B)  the population growth rate is lower than the real interest rate. 
C)  all technological change is the result of luck. 
D)  a successful innovator has the opportunity to earn a temporary, above -average profit.

Question 8

-The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will

Accepted Answer

A)  remain at point W. 
B)  move to point such as Y. 
C)  move to point such as X. 
D)  move to point such as Z. 
A)  remain at point W. 
B)  move to point such as Y. 
C)  move to point such as X. 
D)  move to point such as Z.

Question 9

If a rich country grows at a faster rate than a poor one, then

Accepted Answer

A)  the difference in their living standards will not change over time. 
B)  whether or not the living standards gap widens or closes over time depends on the absolute size of the relative growth rates. 
C)  the gap in their standard of living will widen over time. 
D)  the gap in their standard of living will close over time. 
A)  the difference in their living standards will not change over time. 
B)  whether or not the living standards gap widens or closes over time depends on the absolute size of the relative growth rates. 
C)  the gap in their standard of living will widen over time. 
D)  the gap in their standard of living will close over time.

Question 10

What are the sources of human capital?

Accepted Answer

Human capital, the accumulated skills an

Question 11

$$\begin{array} { | c | l | l | } 
\hline \begin{array} { c } 
\text { Labordemand } \
\text { (billions of } \
\text { hours peryear) }
\end{array} & \begin{array} { c } 
\text { Real wage rate } \
\text { (2005 dollars) }
\end{array} & \begin{array} { l } 
\text { Labor supply } \
\text { (billions of } \
\text { hours per year) }
\end{array} \
\hline 0 & 30 & 6 \
\hline 1 & 25 & 5 \
\hline 2 & 20 & 4 \
\hline 3 & 15 & 3 \
\hline 4 & 10 & 2 \
\hline
\end{array}$$ 
 $$\begin{array} { | c | l | } 
\hline \begin{array} { c } 
\text { Employment } \
\text { (billions of } \
\text { hours peryear) }
\end{array} & \begin{array} { c } 
\text { Real GDP } \
\text { (billions of } \
2005 \text { dollars) }
\end{array} \
\hline 6 & 95 \
\hline 5 & 90 \
\hline 4 & 80 \
\hline 3 & 60 \
\hline 2 & 30 \
\hline
\end{array}$$
-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?

Accepted Answer

a) The equilibrium real wage rate is $15

Question 12

Neoclassical growth theory predicts that Chinaʹs economic growth rate will _______________

Accepted Answer

A)  decrease when the interest rate increases 
B)  always remain above the U.S. economic growth rate 
C)  eventually converge to the U.S. economic growth rate. 
D)  continue at around 10 percent a year 
A)  decrease when the interest rate increases 
B)  always remain above the U.S. economic growth rate 
C)  eventually converge to the U.S. economic growth rate. 
D)  continue at around 10 percent a year

Question 13

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 14

Labor productivity, real GDP per labor hour, increases if

Accepted Answer

A)  new technologies are continuously discovered. 
B)  saving and investment cause an increase in the quantity of capital per worker. 
C)  there is an increase in the accumulation of human capital. 
D)  All of the above answers are correct. 
A)  new technologies are continuously discovered. 
B)  saving and investment cause an increase in the quantity of capital per worker. 
C)  there is an increase in the accumulation of human capital. 
D)  All of the above answers are correct.

Question 15

According to the classical growth theory of Thomas Malthus,

Accepted Answer

A)  labor productivity increases continuously. 
B)  technological advances lead to permanent increases in real GDP per person. 
C)  the population growth rate is fixed. 
D)  increases in real GDP per person are only temporary. 
A)  labor productivity increases continuously. 
B)  technological advances lead to permanent increases in real GDP per person. 
C)  the population growth rate is fixed. 
D)  increases in real GDP per person are only temporary.

Question 16

The labor force participation rate

Accepted Answer

A)  has an inverse effect of the supply of labor. 
B)  increases as the real wage rate increases. 
C)  does not change when the real wage rate changes. 
D)  decreases as the real wage rate rises. 
A)  has an inverse effect of the supply of labor. 
B)  increases as the real wage rate increases. 
C)  does not change when the real wage rate changes. 
D)  decreases as the real wage rate rises.

Question 17

Suppose there is a rise in the price level, but no change in the money wage rate. As a result, the quantity of labor demanded

Accepted Answer

A)  decreases only if the money wage rate also decreases. 
B)  increases. 
C)  does not change because there is no change in the real wage rate. 
D)  decreases. 
A)  decreases only if the money wage rate also decreases. 
B)  increases. 
C)  does not change because there is no change in the real wage rate. 
D)  decreases.

Question 18

Which theory of economic growth concludes that in the long run real GDP per person will be at its subsistence level?

Accepted Answer

A)  the neoclassical theory 
B)  the new theory 
C)  the classical theory 
D)  all of the theories 
A)  the neoclassical theory 
B)  the new theory 
C)  the classical theory 
D)  all of the theories

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

In the classical theory of growth, what is the final outcome of an increase in growth and labor productivity?

Accepted Answer

In the classical growth theory, a rise i

Human capital is the

If both the supply of labor and the demand for labor increase, then

Which of the following contributes to an increase in labor productivity?

At the full-employment equilibrium in the labor market,

During 2011, the country of Economia had a real GDP of $115 billion and the population was 0.9 billion. In 2010, real GDP was 105 billion and the population was 0.85 billion. In 2010, real GDP per person was

A factor that turned out to be a weakness of the classical theory of growth is its

A key assumption of new growth theory is that

-The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will

If a rich country grows at a faster rate than a poor one, then

What are the sources of human capital?

Neoclassical growth theory predicts that Chinaʹs economic growth rate will _______________

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

Labor productivity, real GDP per labor hour, increases if

According to the classical growth theory of Thomas Malthus,

The labor force participation rate

Suppose there is a rise in the price level, but no change in the money wage rate. As a result, the quantity of labor demanded

Which theory of economic growth concludes that in the long run real GDP per person will be at its subsistence level?

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

In the classical theory of growth, what is the final outcome of an increase in growth and labor productivity?

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

Human capital is the

If both the supply of labor and the demand for labor increase, then

Which of the following contributes to an increase in labor productivity?

At the full-employment equilibrium in the labor market,

During 2011, the country of Economia had a real GDP of $115 billion and the population was 0.9 billion. In 2010, real GDP was 105 billion and the population was 0.85 billion. In 2010, real GDP per person was

A factor that turned out to be a weakness of the classical theory of growth is its

A key assumption of new growth theory is that

-The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will

If a rich country grows at a faster rate than a poor one, then

What are the sources of human capital?

Neoclassical growth theory predicts that Chinaʹs economic growth rate will _______________

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

Labor productivity, real GDP per labor hour, increases if

According to the classical growth theory of Thomas Malthus,

The labor force participation rate

Suppose there is a rise in the price level, but no change in the money wage rate. As a result, the quantity of labor demanded

Which theory of economic growth concludes that in the long run real GDP per person will be at its subsistence level?

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

In the classical theory of growth, what is the final outcome of an increase in growth and labor productivity?

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