Question 1

Use the figure below to answer the following questions.
   
Figure 22.3.2
-Refer to Figure 22.3.2.The equilibrium real wage rate is

Accepted Answer

A) $10 an hour. 
B) $15 an hour. 
C) $20 an hour. 
D) any wage rate above $15 an hour. 
E) any wage rate below $15 an hour. 
A) $10 an hour. 
B) $15 an hour. 
C) $20 an hour. 
D) any wage rate above $15 an hour. 
E) any wage rate below $15 an hour.

Question 2

When the quantity of labour demanded exceeds the quantity of labour supplied,the real wage rate

Accepted Answer

A) rises to eliminate the labour market shortage. 
B) falls to eliminate the labour market surplus. 
C) rises to eliminate the labour market surplus. 
D) falls to eliminate the labour market shortage. 
E) does not change but the money wage rate rises to eliminate the labour market shortage. 
A) rises to eliminate the labour market shortage. 
B) falls to eliminate the labour market surplus. 
C) rises to eliminate the labour market surplus. 
D) falls to eliminate the labour market shortage. 
E) does not change but the money wage rate rises to eliminate the labour market shortage.

Question 3

Using the Rule of 70,if the country of Flowerdom's current growth rate of real GDP per person is 10 percent a year,how long will it take the country's real GDP per person to double?

Accepted Answer

A) 0.7 years 
B) 1 year 
C) 10 years 
D) 49 years 
E) 7 years 
A) 0.7 years 
B) 1 year 
C) 10 years 
D) 49 years 
E) 7 years

Question 4

The new growth theory holds that growth can persist indefinitely based on the major assumption that

Accepted Answer

A) discoveries result from regulations. 
B) knowledge capital does not experience diminishing returns. 
C) knowledge is a public capital good. 
D) discoveries bring profit. 
E) knowledge destroys profit. 
A) discoveries result from regulations. 
B) knowledge capital does not experience diminishing returns. 
C) knowledge is a public capital good. 
D) discoveries bring profit. 
E) knowledge destroys profit.

Question 5

A movement along the aggregate production function is the result of a change in ________.

Accepted Answer

A) capital 
B) technology 
C) the quantity of labour 
D) the interest rate 
E) the inflation rate 
A) capital 
B) technology 
C) the quantity of labour 
D) the interest rate 
E) the inflation rate

Question 6

Using the Rule of 70,if the country of Flowerdom's current growth rate of real GDP per person is 7 percent a year,how long will it take the country's real GDP per person to double?

Accepted Answer

A) 1 year 
B) 2 years 
C) 10 years 
D) 49 years 
E) 7 years 
A) 1 year 
B) 2 years 
C) 10 years 
D) 49 years 
E) 7 years

Question 7

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

Accepted Answer

A) decreases;decreases 
B) increases;increases 
C) decreases;increases 
D) increases;decreases 
E) increases;does not change 
A) decreases;decreases 
B) increases;increases 
C) decreases;increases 
D) increases;decreases 
E) increases;does not change

Question 8

The decreasing slope of the aggregate production function reflects

Accepted Answer

A) diminishing returns. 
B) rising unemployment. 
C) decreasing costs. 
D) increasing aggregate demand. 
E) a decrease in potential GDP. 
A) diminishing returns. 
B) rising unemployment. 
C) decreasing costs. 
D) increasing aggregate demand. 
E) a decrease in potential GDP.

Question 9

Human capital is the

Accepted Answer

A) machinery used by humans to produce GDP. 
B) technology used by humans to produce GDP. 
C) skill and knowledge accumulated by humans. 
D) plant and equipment produced by humans and not by machines. 
E) none of the above. 
A) machinery used by humans to produce GDP. 
B) technology used by humans to produce GDP. 
C) skill and knowledge accumulated by humans. 
D) plant and equipment produced by humans and not by machines. 
E) none of the above.

Question 10

Which of the following statements regarding human capital is INCORRECT?

Accepted Answer

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

Question 11

An assumption of the neoclassical growth theory is that

Accepted Answer

A) people earn a subsistence real wage in the long run. 
B) technological advances are the result of chance. 
C) the marginal product of all types of capital increases as more capital is accumulated. 
D) discoveries are a public capital good. 
E) encouraging international trade increases economic growth. 
A) people earn a subsistence real wage in the long run. 
B) technological advances are the result of chance. 
C) the marginal product of all types of capital increases as more capital is accumulated. 
D) discoveries are a public capital good. 
E) encouraging international trade increases economic growth.

Question 12

Suppose a country is producing $20 million of real GDP.If the economy grows at 10 percent per year,approximately how many years will to take for real GDP to grow to $80 million?

Accepted Answer

A) 14 
B) 7 
C) 4 
D) 30 
E) 3.5 years 
A) 14 
B) 7 
C) 4 
D) 30 
E) 3.5 years

Question 13

Compared to physical capital,knowledge capital

Accepted Answer

A) can be replicated without diminishing returns. 
B) can be held in your hand. 
C) leads to an automatic slowdown in growth. 
D) cannot be replicated without diminishing returns. 
E) none of the above. 
A) can be replicated without diminishing returns. 
B) can be held in your hand. 
C) leads to an automatic slowdown in growth. 
D) cannot be replicated without diminishing returns. 
E) none of the above.

Question 14

Between 1926 and 2010,the average growth rate of real GDP per person in Canada was ________ percent a year.During this period,________ grew at a faster rate than ________.

Accepted Answer

A) 2.0;GDP;the population 
B) 2.0;real GDP;the population 
C) 1.0;inflation;real GDP 
D) 3.0;the population;real GDP 
E) 3.0;inflation;real GDP 
A) 2.0;GDP;the population 
B) 2.0;real GDP;the population 
C) 1.0;inflation;real GDP 
D) 3.0;the population;real GDP 
E) 3.0;inflation;real GDP

Question 15

Factors that influence labour productivity include ________.

Accepted Answer

A) the inflation rate, the real wage rate, and the exchange rate 
B) the labour demand curve 
C) physical capital, the real wage rate, and technology 
D) the demand for labour, the real wage rate, and technology 
E) physical capital, human capital, and technology 
A) the inflation rate, the real wage rate, and the exchange rate 
B) the labour demand curve 
C) physical capital, the real wage rate, and technology 
D) the demand for labour, the real wage rate, and technology 
E) physical capital, human capital, and technology

Question 16

In neoclassical growth theory,if the rate of return on capital increases due to a technological advance,then

Accepted Answer

A) the rate of return on capital will eventually decline. 
B) capital per hour of labour will decrease. 
C) real GDP per hour of labour will decrease. 
D) the rate of return on capital will never decline. 
E) population growth will explode. 
A) the rate of return on capital will eventually decline. 
B) capital per hour of labour will decrease. 
C) real GDP per hour of labour will decrease. 
D) the rate of return on capital will never decline. 
E) population growth will explode.

Question 17

If the population increases,then potential GDP ________,employment ________,and ________ potential GDP per hour of labour.

Accepted Answer

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

Question 18

An increase in labour hours will lead to

Accepted Answer

A) an upward shift of the aggregate production function. 
B) a movement along the aggregate production function. 
C) both a movement along and an upward shift of the aggregate production function. 
D) neither a movement along nor a shift of the aggregate production function. 
E) a downward shift of the aggregate production function. 
A) an upward shift of the aggregate production function. 
B) a movement along the aggregate production function. 
C) both a movement along and an upward shift of the aggregate production function. 
D) neither a movement along nor a shift of the aggregate production function. 
E) a downward shift of the aggregate production function.

Question 19

Use the figure below to answer the following question.
   
Figure 22.3.3
-Refer to Figure 22.3.3.As a result of the rightward shift in the demand curve for labour from LD? to LD?,the equilibrium level of employment ________,potential GDP ________,and potential GDP per hour of labour ________.

Accepted Answer

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

Question 20

Use the figure below to answer the following question.
   
Figure 22.3.3
-Ceteris paribus,an increase in labour productivity results in a

Accepted Answer

A) higher real wage rate and higher potential GDP per hour of labour. 
B) lower real wage rate and higher potential GDP per hour of labour. 
C) higher real wage rate and lower potential GDP per hour of labour. 
D) lower real wage rate and lower potential GDP per hour of labour. 
E) constant real wage rate in the long run. 
A) higher real wage rate and higher potential GDP per hour of labour. 
B) lower real wage rate and higher potential GDP per hour of labour. 
C) higher real wage rate and lower potential GDP per hour of labour. 
D) lower real wage rate and lower potential GDP per hour of labour. 
E) constant real wage rate in the long run.

Exam 22: Economic Growth

Use the figure below to answer the following questions. Figure 22.3.2 -Refer to Figure 22.3.2.The equilibrium real wage rate is

When the quantity of labour demanded exceeds the quantity of labour supplied,the real wage rate

Using the Rule of 70,if the country of Flowerdom's current growth rate of real GDP per person is 10 percent a year,how long will it take the country's real GDP per person to double?

The new growth theory holds that growth can persist indefinitely based on the major assumption that

A movement along the aggregate production function is the result of a change in ________.

Using the Rule of 70,if the country of Flowerdom's current growth rate of real GDP per person is 7 percent a year,how long will it take the country's real GDP per person to double?

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

The decreasing slope of the aggregate production function reflects

Human capital is the

Which of the following statements regarding human capital is INCORRECT?

An assumption of the neoclassical growth theory is that

Suppose a country is producing $20 million of real GDP.If the economy grows at 10 percent per year,approximately how many years will to take for real GDP to grow to $80 million?

Compared to physical capital,knowledge capital

Between 1926 and 2010,the average growth rate of real GDP per person in Canada was ________ percent a year.During this period,________ grew at a faster rate than ________.

Factors that influence labour productivity include ________.

In neoclassical growth theory,if the rate of return on capital increases due to a technological advance,then

If the population increases,then potential GDP ________,employment ________,and ________ potential GDP per hour of labour.

An increase in labour hours will lead to

Use the figure below to answer the following question. Figure 22.3.3 -Refer to Figure 22.3.3.As a result of the rightward shift in the demand curve for labour from LD? to LD?,the equilibrium level of employment ________,potential GDP ________,and potential GDP per hour of labour ________.

Use the figure below to answer the following question. Figure 22.3.3 -Ceteris paribus,an increase in labour productivity results in a

What Is Economics?

The Economic Problem

Demand and Supply

Elasticity

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Government Actions in Markets

Global Markets in Action

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Possibilities, Preferences, and Choices

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Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

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

Canadian Inflation, Unemployment, and Business Cycle

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Filters

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

Between 1926 and 2010,the average growth rate of real GDP per person in Canada was percent a year.During this period, grew at a faster rate than .

If the population increases,then potential GDP ,employment ,and potential GDP per hour of labour.

Use the figure below to answer the following question. Figure 22.3.3 -Refer to Figure 22.3.3.As a result of the rightward shift in the demand curve for labour from LD? to LD?,the equilibrium level of employment ,potential GDP ,and potential GDP per hour of labour .