Question 1

Neoclassical growth theory attributes economic growth to

Accepted Answer

A)  technological change. 
B)  fiscal policy. 
C)  the law of diminishing returns. 
D)  increasing population growth. 
A)  technological change. 
B)  fiscal policy. 
C)  the law of diminishing returns. 
D)  increasing population growth.

Question 2

The assumption that population growth will lead to a fall in real GDP per person rate back to subsistence level is

Accepted Answer

A)  accepted by all economists today. 
B)  associated with Malthusians. 
C)  part of the neoclassical school of growth theory. 
D)  central to the new growth theory. 
A)  accepted by all economists today. 
B)  associated with Malthusians. 
C)  part of the neoclassical school of growth theory. 
D)  central to the new growth theory.

Question 3

An increase in a nation's population results in

Accepted Answer

A)  an upward shift in the production function. 
B)  a movement along the production function. 
C)  a leftward shift in the labor supply curve. 
D)  Both answers A and C are correct. 
A)  an upward shift in the production function. 
B)  a movement along the production function. 
C)  a leftward shift in the labor supply curve. 
D)  Both answers A and C are correct.

Question 4

Since 1980, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

Accepted Answer

A)  the United States and Canada 
B)  the United States and Europe's Big Four 
C)  the United States and Japan 
D)  the United States and China 
A)  the United States and Canada 
B)  the United States and Europe's Big Four 
C)  the United States and Japan 
D)  the United States and China

Question 5

-In the above figure, the equilibrium level of labor is

Accepted Answer

A)  100 billion hours. 
B)  150 billion hours. 
C)  200 billion hours. 
D)  none of the above 
A)  100 billion hours. 
B)  150 billion hours. 
C)  200 billion hours. 
D)  none of the above

Question 6

The demand for labor curve is

Accepted Answer

A)  upward sloping at potential GDP and downward sloping elsewhere. 
B)  vertical at potential GDP. 
C)  downward sloping. 
D)  upward sloping because firms demand labor. 
A)  upward sloping at potential GDP and downward sloping elsewhere. 
B)  vertical at potential GDP. 
C)  downward sloping. 
D)  upward sloping because firms demand labor.

Question 7

During World War II, the increasing productivity of workers who built ships was due primarily to

Accepted Answer

A)  human capital accumulation through schooling and training. 
B)  human capital accumulation by repeatedly doing the same tasks. 
C)  discoveries of new and better technologies. 
D)  investments by shipyards in new capital equipment. 
A)  human capital accumulation through schooling and training. 
B)  human capital accumulation by repeatedly doing the same tasks. 
C)  discoveries of new and better technologies. 
D)  investments by shipyards in new capital equipment.

Question 8

All of the following would stimulate economic growth EXCEPT

Accepted Answer

A)  decreasing taxes on consumption (for instance, decreasing a sales taxes) and increasing income taxes. 
B)  subsidizing basic research. 
C)  decreasing tuition charges at state universities. 
D)  encouraging international trade. 
A)  decreasing taxes on consumption (for instance, decreasing a sales taxes) and increasing income taxes. 
B)  subsidizing basic research. 
C)  decreasing tuition charges at state universities. 
D)  encouraging international trade.

Question 9

Which of the following is used to calculate the standard of living?

Accepted Answer

A)  real GDP/population 
B)  ((real GDP in the current year - real GDP in previous year)/real GDP in previous year) × 100 
C)  the one-third rule 
D)  real GDP/aggregate hours 
A)  real GDP/population 
B)  ((real GDP in the current year - real GDP in previous year)/real GDP in previous year) × 100 
C)  the one-third rule 
D)  real GDP/aggregate hours

Question 10

Which of the following ideas apply to the neoclassical growth theory?
I. The rate of technological change influences the rate of economic growth.
II. Technological change promotes saving and investment.
III. Convergence of economic growth rates across countries.

Accepted Answer

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

Question 11

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

Accepted Answer

Labor productivity is (real GD

Question 12

If the population increases, then potential GDP ________ and employment ________.

Accepted Answer

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

Question 13

If the labor market is in equilibrium and then the labor supply curve shifts rightward

Accepted Answer

A)  there will be a shortage of labor at the original equilibrium wage rate. 
B)  there will be a surplus of labor at the original equilibrium wage rate. 
C)  the equilibrium wage rate will rise. 
D)  there will be a surplus of jobs at the new equilibrium. 
A)  there will be a shortage of labor at the original equilibrium wage rate. 
B)  there will be a surplus of labor at the original equilibrium wage rate. 
C)  the equilibrium wage rate will rise. 
D)  there will be a surplus of jobs at the new equilibrium.

Question 14

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.
a) What are 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 15

An increase in labor hours will lead to

Accepted Answer

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

Question 16

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.
a) What are 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 17

Human capital is, in part, the

Accepted Answer

A)  amount of money held by a worker. 
B)  stock of knowledge of a worker. 
C)  stock of plant and equipment. 
D)  stock of financial assets held by the public. 
A)  amount of money held by a worker. 
B)  stock of knowledge of a worker. 
C)  stock of plant and equipment. 
D)  stock of financial assets held by the public.

Question 18

Economists are interested in long-term economic growth because growth increases real GDP per person and improves our standard of living.

Accepted Answer

A) True 
 B)False

Question 19

If the quantity of capital per worker in the economy increases

Accepted Answer

A)  the amount of money held by workers increases. 
B)  labor productivity increases. 
C)  the stock of human capital necessarily increases. 
D)  the stock of financial assets held by the public increases. 
A)  the amount of money held by workers increases. 
B)  labor productivity increases. 
C)  the stock of human capital necessarily increases. 
D)  the stock of financial assets held by the public increases.

Question 20

-In the above figure, at a wage rate of $20 per hour

Accepted Answer

A)  there is a shortage of labor. 
B)  there is a surplus of labor. 
C)  the labor supply curve will shift rightward. 
D)  the labor demand curve will shift rightward. 
A)  there is a shortage of labor. 
B)  there is a surplus of labor. 
C)  the labor supply curve will shift rightward. 
D)  the labor demand curve will shift rightward.

Neoclassical growth theory attributes economic growth to

The assumption that population growth will lead to a fall in real GDP per person rate back to subsistence level is

An increase in a nation's population results in

Since 1980, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

-In the above figure, the equilibrium level of labor is

The demand for labor curve is

During World War II, the increasing productivity of workers who built ships was due primarily to

All of the following would stimulate economic growth EXCEPT

Which of the following is used to calculate the standard of living?

Which of the following ideas apply to the neoclassical growth theory? I. The rate of technological change influences the rate of economic growth. II. Technological change promotes saving and investment. III. Convergence of economic growth rates across countries.

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

If the population increases, then potential GDP and employment .

If the labor market is in equilibrium and then the labor supply curve shifts rightward

An increase in labor hours will lead to

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function. a) What are the equilibrium real wage rate and the level of employment? b) What is potential GDP?

Human capital is, in part, the

Economists are interested in long-term economic growth because growth increases real GDP per person and improves our standard of living.

If the quantity of capital per worker in the economy increases

-In the above figure, at a wage rate of $20 per hour

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 6: Economic Growth

Neoclassical growth theory attributes economic growth to

The assumption that population growth will lead to a fall in real GDP per person rate back to subsistence level is

An increase in a nation's population results in

Since 1980, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

-In the above figure, the equilibrium level of labor is

The demand for labor curve is

During World War II, the increasing productivity of workers who built ships was due primarily to

All of the following would stimulate economic growth EXCEPT

Which of the following is used to calculate the standard of living?

Which of the following ideas apply to the neoclassical growth theory? I. The rate of technological change influences the rate of economic growth. II. Technological change promotes saving and investment. III. Convergence of economic growth rates across countries.

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

If the population increases, then potential GDP ________ and employment ________.

If the labor market is in equilibrium and then the labor supply curve shifts rightward

An increase in labor hours will lead to

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function. a) What are the equilibrium real wage rate and the level of employment? b) What is potential GDP?

Human capital is, in part, the

Economists are interested in long-term economic growth because growth increases real GDP per person and improves our standard of living.

If the quantity of capital per worker in the economy increases

-In the above figure, at a wage rate of $20 per hour

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

If the population increases, then potential GDP and employment .