Question 1

The more education that workers have, the ______is their human capital and_________ is their productivity.

Accepted Answer

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

Question 2

Over the past fifty years, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

Accepted Answer

A)  Africa and Western Europe 
B)  the United States and Japan 
C)  Central and South America and Africa 
D)  the United States and Central and South America 
A)  Africa and Western Europe 
B)  the United States and Japan 
C)  Central and South America and Africa 
D)  the United States and Central and South America

Question 3

The quantity of labor supplied depends on the

Accepted Answer

A)  real wage rate not the money wage rate. 
B)  money wage rate not the real wage rate. 
C)  price of output not the money wage rate nor the real wage rate. 
D)  level of profits. 
A)  real wage rate not the money wage rate. 
B)  money wage rate not the real wage rate. 
C)  price of output not the money wage rate nor the real wage rate. 
D)  level of profits.

Question 4

The aggregate production function is graphed as

Accepted Answer

A)  an upward sloping line that becomes steeper as the quantity of labor increases. 
B)  an upward sloping line that becomes flatter as the quantity of labor increases. 
C)  a downward sloping curve. 
D)  an upward sloping straight line. 
A)  an upward sloping line that becomes steeper as the quantity of labor increases. 
B)  an upward sloping line that becomes flatter as the quantity of labor increases. 
C)  a downward sloping curve. 
D)  an upward sloping straight line.

Question 5

The aggregate production function

Accepted Answer

A)  cannot show the impacts of productivity improvements. 
B)  measures the productivity of labor as leisure decreases. 
C)  increases only with increases in productivity. 
D)  shows that real GDP can increase because of increased productivity as well as increased labor hours. 
A)  cannot show the impacts of productivity improvements. 
B)  measures the productivity of labor as leisure decreases. 
C)  increases only with increases in productivity. 
D)  shows that real GDP can increase because of increased productivity as well as increased labor hours.

Question 6

When labor productivity increases, the demand for labor curve and the supply of labor curve .

Accepted Answer

A)  shifts leftward; shifts rightward 
B)  shifts rightward; shifts rightward 
C)  shift s leftward; does not shift 
D)  shifts rightward; does not shift 
A)  shifts leftward; shifts rightward 
B)  shifts rightward; shifts rightward 
C)  shift s leftward; does not shift 
D)  shifts rightward; does not shift

Question 7

The demand for labor curve

Accepted Answer

A)  is upward sloping because productivity of labor diminishes as more workers are employed. 
B)  shifts rightward when the real wage rate rises. 
C)  is upward sloping and the supply curve of labor is downward sloping. 
D)  is downward sloping because productivity of labor diminishes as more workers are employed. 
A)  is upward sloping because productivity of labor diminishes as more workers are employed. 
B)  shifts rightward when the real wage rate rises. 
C)  is upward sloping and the supply curve of labor is downward sloping. 
D)  is downward sloping because productivity of labor diminishes as more workers are employed.

Question 8

-In the illustration above, which figure shows an aggregate production function?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 9

If capital per worker rises,

Accepted Answer

A)  labor productivity decreases. 
B)  no technological progress occurs. 
C)  firms respond by raising their prices. 
D)  labor productivity increases. 
A)  labor productivity decreases. 
B)  no technological progress occurs. 
C)  firms respond by raising their prices. 
D)  labor productivity increases.

Question 10

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

Accepted Answer

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

Question 11

$$\begin{array} { | l | l | l | } 
\hline \begin{array} { c } 
\text { Real wage rate } \
\text { (2005 dollars) }
\end{array} & \begin{array} { l } 
\text { Labor demand } \
\text { (billions of } \
\text { hours per year) }
\end{array} & \begin{array} { l } 
\text { Labor supply } \
\text { (billions of } \
\text { hours per year) }
\end{array} \
\hline 30 & 100 & 700 \
\hline 25 & 200 & 600 \
\hline 20 & 300 & 500 \
\hline 15 & 400 & 400 \
\hline 10 & 500 & 300 \
\hline
\end{array}$$ 
 $\begin{array}{|l|l|}
\hline \text { Employment } & \text { Real GDF } \
\text { (billions of } & \text { (trillions of } \
\text { hours peryear) } & 2005 \text { dollars) }\
\hline 200 & 3.0 \
\hline 300 & 4.0 \
\hline 400 & 4.8 \
\hline 500 & 5.4 \
\hline 600 & 5.8 \
\hline
\end{array}$
-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

What is the role of profits in the neoclassical growth theory versus the new growth theory?

Accepted Answer

Profits play essentially no role in the

Question 13

-In the above figure, what is the full-employment real wage rate and quantity of hours per year?

Accepted Answer

A)  $50 and 40 billion hours per year 
B)  $35 and 100 billion hours per year 
C)  $50 and 100 billion hours per year 
D)  $40 and 60 billion hours per year 
A)  $50 and 40 billion hours per year 
B)  $35 and 100 billion hours per year 
C)  $50 and 100 billion hours per year 
D)  $40 and 60 billion hours per year

Question 14

The historical record for the United States since 1910 shows

Accepted Answer

A)  economic growth for about half the years and economic decline for the other half. 
B)  growth until 1970 and then a period of constant per person real GDP. 
C)  continuous economic growth for each year, although at different rates, throughout the entire century. 
D)  mostly positive economic growth, though the Great Depression caused actual GDP to dip well below potential GDP. 
A)  economic growth for about half the years and economic decline for the other half. 
B)  growth until 1970 and then a period of constant per person real GDP. 
C)  continuous economic growth for each year, although at different rates, throughout the entire century. 
D)  mostly positive economic growth, though the Great Depression caused actual GDP to dip well below potential GDP.

Question 15

If the nationʹs capital stock increases so that workers become more productive, the

Accepted Answer

A)  supply of labor will increase 
B)  demand for labor will increase 
C)  demand for labor will decrease 
D)  supply of labor will decrease 
A)  supply of labor will increase 
B)  demand for labor will increase 
C)  demand for labor will decrease 
D)  supply of labor will decrease

Question 16

Over the past 100 years, in the United States the average growth rate of__________ grew at a faster rate than _______.

Accepted Answer

A)  real GDP; the population 
B)  the population; real GDP 
C)  inflation; real GDP 
D)  real GDP; nominal GDP 
A)  real GDP; the population 
B)  the population; real GDP 
C)  inflation; real GDP 
D)  real GDP; nominal GDP

Question 17

An increase in labor hours will lead to

Accepted Answer

A)  both a movement along and a shift in the aggregate production function. 
B)  a shift of the aggregate production function but no movement along it. 
C)  neither a movement along nor a shift in the aggregate production function. 
D)  a movement along the aggregate production function but no shift in it. 
A)  both a movement along and a shift in the aggregate production function. 
B)  a shift of the aggregate production function but no movement along it. 
C)  neither a movement along nor a shift in the aggregate production function. 
D)  a movement along the aggregate production function but no shift in it.

Question 18

The view that population growth occurs when real GDP per person exceeds the amount necessary to sustain life is part of the__________ .

Accepted Answer

A)  neoclassical growth theory 
B)  modern theory of population growth 
C)  classical growth theory 
D)  new growth theory 
A)  neoclassical growth theory 
B)  modern theory of population growth 
C)  classical growth theory 
D)  new growth theory

Question 19

A higher saving rate leads to faster growth because

Accepted Answer

A)  more saving produces greater additions to capital per hour of labor, raising real GDP per person. 
B)  people could consume more of an economyʹs output. 
C)  capital would wear out faster. 
D)  population growth would accelerate. 
A)  more saving produces greater additions to capital per hour of labor, raising real GDP per person. 
B)  people could consume more of an economyʹs output. 
C)  capital would wear out faster. 
D)  population growth would accelerate.

Question 20

-The country of Kemper is on its aggregate production function at point W in the above figure. If the population increases with no change in capital or technology, the economy will

Accepted Answer

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

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

Over the past fifty years, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

The quantity of labor supplied depends on the

The aggregate production function is graphed as

The aggregate production function

When labor productivity increases, the demand for labor curve and the supply of labor curve .

The demand for labor curve

-In the illustration above, which figure shows an aggregate production function?

If capital per worker rises,

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

What is the role of profits in the neoclassical growth theory versus the new growth theory?

-In the above figure, what is the full-employment real wage rate and quantity of hours per year?

The historical record for the United States since 1910 shows

If the nationʹs capital stock increases so that workers become more productive, the

Over the past 100 years, in the United States the average growth rate of____ grew at a faster rate than _.

An increase in labor hours will lead to

The view that population growth occurs when real GDP per person exceeds the amount necessary to sustain life is part of the__________ .

A higher saving rate leads to faster growth because

-The country of Kemper is on its aggregate production function at point W in the above figure. If the population increases with no change in capital or technology, the economy will

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

The more education that workers have, the ______is their human capital and_________ is their productivity.

Over the past fifty years, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

The quantity of labor supplied depends on the

The aggregate production function is graphed as

The aggregate production function

When labor productivity increases, the demand for labor curve and the supply of labor curve .

The demand for labor curve

-In the illustration above, which figure shows an aggregate production function?

If capital per worker rises,

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

What is the role of profits in the neoclassical growth theory versus the new growth theory?

-In the above figure, what is the full-employment real wage rate and quantity of hours per year?

The historical record for the United States since 1910 shows

If the nationʹs capital stock increases so that workers become more productive, the

Over the past 100 years, in the United States the average growth rate of__________ grew at a faster rate than _______.

An increase in labor hours will lead to

The view that population growth occurs when real GDP per person exceeds the amount necessary to sustain life is part of the__________ .

A higher saving rate leads to faster growth because

-The country of Kemper is on its aggregate production function at point W in the above figure. If the population increases with no change in capital or technology, the economy will

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

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

Over the past 100 years, in the United States the average growth rate of____ grew at a faster rate than _.