Question 1

The supply of labor curve

Accepted Answer

A)  has a negative slope. 
B)  is independent of the wage rate. 
C)  shows how much labor workers are willing to supply at various real wage rates. 
D)  is usually vertical. 
A)  has a negative slope. 
B)  is independent of the wage rate. 
C)  shows how much labor workers are willing to supply at various real wage rates. 
D)  is usually vertical.

Question 2

Workers who pursue an education directly increase their

Accepted Answer

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

Question 3

Savings is an important factor influencing economic growth because saving

Accepted Answer

A)  can finance new investment and capital formation. 
B)  helps the economy maintain the current level of total expenditures when a recession begins. 
C)  provides a fund for wages needed from any unexpected population growth. 
D)  All of the above answers are correct. 
A)  can finance new investment and capital formation. 
B)  helps the economy maintain the current level of total expenditures when a recession begins. 
C)  provides a fund for wages needed from any unexpected population growth. 
D)  All of the above answers are correct.

Question 4

If capital per hour of labor increases, real GDP per hour of labor

Accepted Answer

A)  decreases for a given level of technology. 
B)  increases because the level of technology increases. 
C)  increases for a given level of technology. 
D)  decreases because the level of technology decreases. 
A)  decreases for a given level of technology. 
B)  increases because the level of technology increases. 
C)  increases for a given level of technology. 
D)  decreases because the level of technology decreases.

Question 5

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

Accepted Answer

A)  Population growth occurs, increasing the supply of labor. 
B)  Population growth occurs, shifting the labor supply curve leftward. 
C)  Growth is not possible so the demand for labor never changes. 
D)  Investment in capital decreases labor demand, decreasing the demand for labor. 
A)  Population growth occurs, increasing the supply of labor. 
B)  Population growth occurs, shifting the labor supply curve leftward. 
C)  Growth is not possible so the demand for labor never changes. 
D)  Investment in capital decreases labor demand, decreasing the demand for labor.

Question 6

If a nation's population grows, then

Accepted Answer

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

Question 7

A recent article states that "...gains from two centuries of rapid technological innovation are largely exhausted, and new discoveries lack the same revolutionary quality....{Further}, 80 percent of the growth between 1950 and 1993 came from the new application of old ideas, and these old ideas are now mostly wrung dry."
(The Economist, 03/03/2011)
-The neoclassical growth theory says, in part, that

Accepted Answer

A)  a population explosion driven by economic growth will end economic growth. 
B)  technological change leads to economic growth. 
C)  the differences in nation's growth rates will persist indefinitely. 
D)  technology does not play a role in economic growth. 
A)  a population explosion driven by economic growth will end economic growth. 
B)  technological change leads to economic growth. 
C)  the differences in nation's growth rates will persist indefinitely. 
D)  technology does not play a role in economic growth.

Question 8

A worker's stock of knowledge is known as

Accepted Answer

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

Question 9

In 2016, of the following which nations had the highest level of real GDP per person?

Accepted Answer

A)  Japan 
B)  Europe Big 4 
C)  Canada 
D)  China 
A)  Japan 
B)  Europe Big 4 
C)  Canada 
D)  China

Question 10

Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is

Accepted Answer

A)  $1,000. 
B)  positive. 
C)  negative. 
D)  zero. 
A)  $1,000. 
B)  positive. 
C)  negative. 
D)  zero.

Question 11

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

Accepted Answer

A)  investment in new capital 
B)  resource conservation 
C)  investment in human capital 
D)  discoveries of new technology 
A)  investment in new capital 
B)  resource conservation 
C)  investment in human capital 
D)  discoveries of new technology

Question 12

New growth theory economists believe that:
I. Economic growth can continue as long as we keep finding new ideas.
II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

Accepted Answer

A)  I only 
B)  II only 
C)  both I and II 
D)  neither I nor II 
A)  I only 
B)  II only 
C)  both I and II 
D)  neither I nor II

Question 13

At the full-employment equilibrium in the labor market

Accepted Answer

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

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?

Accepted Answer

a) The equilibrium real wage rate is $15

Question 15

Faster long-term growth can be achieved by discouraging saving and encouraging consumption.

Accepted Answer

A) True 
 B)False

Question 16

An increase in labor productivity relates to

Accepted Answer

A)  working harder over time. 
B)  working longer over time. 
C)  producing the same output with fewer labor hours. 
D)  producing the same output with more labor hours. 
A)  working harder over time. 
B)  working longer over time. 
C)  producing the same output with fewer labor hours. 
D)  producing the same output with more labor hours.

Question 17

An increase in labor productivity shifts the

Accepted Answer

A)  labor demand curve rightward. 
B)  labor demand curve leftward. 
C)  labor supply curve rightward. 
D)  labor supply curve leftward. 
A)  labor demand curve rightward. 
B)  labor demand curve leftward. 
C)  labor supply curve rightward. 
D)  labor supply curve leftward.

Question 18

An increase in labor productivity ________ the real wage rate and an increase in population ________ the real wage rate.

Accepted Answer

A)  raises; lowers 
B)  raises; raises 
C)  lowers; lowers 
D)  lowers; raises 
A)  raises; lowers 
B)  raises; raises 
C)  lowers; lowers 
D)  lowers; raises

Question 19

New growth theory proposes that real GDP per person grows because of ________ and that growth ________.

Accepted Answer

A)  the pursuit of profit; can persist indefinitely 
B)  productivity shocks; can persist indefinitely 
C)  technological change; can only increase above the subsistence level temporarily 
D)  productivity shocks; occurs randomly 
A)  the pursuit of profit; can persist indefinitely 
B)  productivity shocks; can persist indefinitely 
C)  technological change; can only increase above the subsistence level temporarily 
D)  productivity shocks; occurs randomly

Question 20

If workers' money wage rates increase by 5 percent and the price level remains constant, workers'

Accepted Answer

A)  quantity of labor supplied will decrease. 
B)  quantity of labor supplied will increase. 
C)  quantity of labor supplied will not change. 
D)  demand for jobs will decrease. 
A)  quantity of labor supplied will decrease. 
B)  quantity of labor supplied will increase. 
C)  quantity of labor supplied will not change. 
D)  demand for jobs will decrease.

The supply of labor curve

Workers who pursue an education directly increase their

Savings is an important factor influencing economic growth because saving

If capital per hour of labor increases, real GDP per hour of labor

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

If a nation's population grows, then

A worker's stock of knowledge is known as

In 2016, of the following which nations had the highest level of real GDP per person?

Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

New growth theory economists believe that: I. Economic growth can continue as long as we keep finding new ideas. II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

At the full-employment equilibrium in the labor market

-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?

Faster long-term growth can be achieved by discouraging saving and encouraging consumption.

An increase in labor productivity relates to

An increase in labor productivity shifts the

An increase in labor productivity the real wage rate and an increase in population the real wage rate.

New growth theory proposes that real GDP per person grows because of and that growth .

If workers' money wage rates increase by 5 percent and the price level remains constant, workers'

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

The supply of labor curve

Workers who pursue an education directly increase their

Savings is an important factor influencing economic growth because saving

If capital per hour of labor increases, real GDP per hour of labor

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

If a nation's population grows, then

A worker's stock of knowledge is known as

In 2016, of the following which nations had the highest level of real GDP per person?

Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

New growth theory economists believe that: I. Economic growth can continue as long as we keep finding new ideas. II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

At the full-employment equilibrium in the labor market

-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?

Faster long-term growth can be achieved by discouraging saving and encouraging consumption.

An increase in labor productivity relates to

An increase in labor productivity shifts the

An increase in labor productivity ________ the real wage rate and an increase in population ________ the real wage rate.

New growth theory proposes that real GDP per person grows because of ________ and that growth ________.

If workers' money wage rates increase by 5 percent and the price level remains constant, workers'

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

An increase in labor productivity the real wage rate and an increase in population the real wage rate.

New growth theory proposes that real GDP per person grows because of and that growth .