Question 1

-In the above figure, if the real wage is $10 per hour, a labor

Accepted Answer

A)  shortage will occur and the real wage will rise. 
B)  shortage will occur and the real wage will fall. 
C)  surplus will occur and the real wage will rise. 
D)  surplus will occur and the real wage will fall. 
A)  shortage will occur and the real wage will rise. 
B)  shortage will occur and the real wage will fall. 
C)  surplus will occur and the real wage will rise. 
D)  surplus will occur and the real wage will fall.

Question 2

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth. Based on your understanding of growth theory and growth accounting, what would you suggest?

Accepted Answer

According to both neoclassical and new g

Question 3

Hu Tells Leaders China Growth Will Help World Economy Chinese President Hu Jintao told world leaders that his country "has taken an active part in the international cooperation to deal with the financial crisis'' by providing a "$586 billion economic stimulus, focused on building low-rent housing, roads, railways and airports. The package also allows tax deductions for fixed assets such as machinery to stimulate investment. Farmers will also benefit from more subsidies."
Hu stated that "China is in itself an important contribution to international financial stability and world economic growth.''
www.bloomberg.com 11/15/2008
Which of the following will occur if China's spending generates economic growth in real GDP per person?
i. There will be an upward shift in China's aggregate production function.
ii. There will be a rightward shift in China's labor demand curve.
iII. There will be an increase in the real wage.

Accepted Answer

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

Question 4

Hu Tells Leaders China Growth Will Help World Economy Chinese President Hu Jintao told world leaders that his country "has taken an active part in the international cooperation to deal with the financial crisis'' by providing a "$586 billion economic stimulus, focused on building low-rent housing, roads, railways and airports. The package also allows tax deductions for fixed assets such as machinery to stimulate investment. Farmers will also benefit from more subsidies."
Hu stated that "China is in itself an important contribution to international financial stability and world economic growth.''
Www)bloomberg.com 11/15/2008
If the fiscal stimulus spending does generate economic growth, we can expect to see

Accepted Answer

A)  growth in labor productivity. 
B)  growth China's price level. 
C)  an excess supply of labor in China's labor market. 
D)  growth in the supply of labor. 
A)  growth in labor productivity. 
B)  growth China's price level. 
C)  an excess supply of labor in China's labor market. 
D)  growth in the supply of labor.

Question 5

The relationship between education and economic growth can best be summarized by saying that

Accepted Answer

A)  educated people are less apt to consume goods that deplete economic resources, which encourages economic growth. 
B)  educational expenditures tend to divert funds from productive investments, which discourages economic growth. 
C)  educational expenditures tend to be inflationary, which discourages economic growth. 
D)  education has benefits beyond those who receive the education, which encourages economic growth. 
A)  educated people are less apt to consume goods that deplete economic resources, which encourages economic growth. 
B)  educational expenditures tend to divert funds from productive investments, which discourages economic growth. 
C)  educational expenditures tend to be inflationary, which discourages economic growth. 
D)  education has benefits beyond those who receive the education, which encourages economic growth.

Question 6

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

Question 7

How will an increase in physical capital affect labor productivity, labor demand, and potential GDP?

Accepted Answer

An increase in capital increases labor p

Question 8

Classical growth theory argues that when real GDP per person rises above the subsistence level

Accepted Answer

A)  technological change slows down, stagnating the economy. 
B)  population growth increases, driving real GDP per person back to subsistence level. 
C)  people don't want to work as much, decreasing labor supply. 
D)  the economy enjoys a period of permanent growth. 
A)  technological change slows down, stagnating the economy. 
B)  population growth increases, driving real GDP per person back to subsistence level. 
C)  people don't want to work as much, decreasing labor supply. 
D)  the economy enjoys a period of permanent growth.

Question 9

Strategy to Address Dependence on Foreign Workers, Labour Market Demands The prime minister of Malaysia announced his government's "immediate focus would be to enhance skills development and improve the quality of education." By "the constant upgrading of skills of the country's workforce" he hoped to improve the country's "global competitiveness and raise average incomes of workers."
Www)thestar.com.my 11/21/2008
The story describes

Accepted Answer

A)  a plan increase physical capital. 
B)  improvements in Malaysia's incentive system. 
C)  a consequence of economic growth. 
D)  a plan to increase human capital. 
A)  a plan increase physical capital. 
B)  improvements in Malaysia's incentive system. 
C)  a consequence of economic growth. 
D)  a plan to increase human capital.

Question 10

Suppose real GDP for a country is $13 trillion in 2015, $14 trillion in 2016, $15 trillion in 2017, and $16 trillion in 2018. Over this time period, the real GDP growth rate is

Accepted Answer

A)  increasing. 
B)  decreasing. 
C)  constant. 
D)  negative. 
A)  increasing. 
B)  decreasing. 
C)  constant. 
D)  negative.

Question 11

Classical growth theory asserts that

Accepted Answer

A)  growth in real GDP per person is temporary. 
B)  only some countries can have economic growth. 
C)  real GDP growth will eventually be a constant 3 percent per year. 
D)  nominal GDP growth is most important. 
A)  growth in real GDP per person is temporary. 
B)  only some countries can have economic growth. 
C)  real GDP growth will eventually be a constant 3 percent per year. 
D)  nominal GDP growth is most important.

Question 12

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 productivity and technological advance. 
D)  Writing and mathematics, the most basic of human skills, are crucial elements in economic progress. 
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 productivity and technological advance. 
D)  Writing and mathematics, the most basic of human skills, are crucial elements in economic progress.

Question 13

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)
-In neoclassical growth theory, technological change

Accepted Answer

A)  occurs by chance. 
B)  is influenced by population growth. 
C)  is influenced by the rate of economic growth. 
D)  occurs at a steady rate. 
A)  occurs by chance. 
B)  is influenced by population growth. 
C)  is influenced by the rate of economic growth. 
D)  occurs at a steady rate.

Question 14

Explain how the labor market and the production function determine potential GDP.

Accepted Answer

The labor market determines the equilibr

Question 15

Cuba spends the highest percentage of GDP (18.7 percent) on education while the United States is the 38th highest spender with 5.7 percent of GDP. If spending on education is important for economic growth, which of the following statements explain why Cuba's economic growth rate is lower than the U.S. economic growth rate? (data from United Nations Human Development Programme)

Accepted Answer

A)  Cuba trades with many more countries than does the United States. 
B)  Cuba doesn't offer property rights that promote innovation. 
C)  Cuba's population is smaller than the U.S. population. 
D)  all of the above explain why Cuba's economic growth rate is lower than the U.S. economic growth rate. 
A)  Cuba trades with many more countries than does the United States. 
B)  Cuba doesn't offer property rights that promote innovation. 
C)  Cuba's population is smaller than the U.S. population. 
D)  all of the above explain why Cuba's economic growth rate is lower than the U.S. economic growth rate.

Question 16

"Why India Cannot Sustain High Economic Growth", by Kunal KumarKundu In his article about India's prospects for growth, the author notes that "Per capita availability of food grain is falling as population is growing faster than food grain production. Deplorable rural infrastructure leads to India wasting an amount of food grain... . India's agriculture is still so very highly monsoon dependent..."
Www)rediff.com 5/29/2008
This view of India's economic growth is best reflected in the

Accepted Answer

A)  classical growth theory. 
B)  new growth theory. 
C)  neoclassical growth theory. 
D)  aggregate production theory. 
A)  classical growth theory. 
B)  new growth theory. 
C)  neoclassical growth theory. 
D)  aggregate production theory.

Question 17

Since 1980, which of the following countries had average growth rates in real GDP per person higher than that of the United States?

Accepted Answer

A)  Singapore 
B)  Hong Kong 
C)  South Korea 
D)  All of the above answers are correct. 
A)  Singapore 
B)  Hong Kong 
C)  South Korea 
D)  All of the above answers are correct.

Question 18

Which of the following is NOT an important factor affecting growth in labor productivity?

Accepted Answer

A)  the saving rate 
B)  the speed with which prices fall 
C)  the growth rate of physical capital 
D)  the growth rate of labor productivity 
A)  the saving rate 
B)  the speed with which prices fall 
C)  the growth rate of physical capital 
D)  the growth rate of labor productivity

Question 19

The labor force participation rate

Accepted Answer

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

Question 20

An advance in technology shifts the production function upward and shifts the labor

Accepted Answer

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

-In the above figure, if the real wage is $10 per hour, a labor

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth. Based on your understanding of growth theory and growth accounting, what would you suggest?

The relationship between education and economic growth can best be summarized by saying that

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

How will an increase in physical capital affect labor productivity, labor demand, and potential GDP?

Classical growth theory argues that when real GDP per person rises above the subsistence level

Suppose real GDP for a country is $13 trillion in 2015, $14 trillion in 2016, $15 trillion in 2017, and $16 trillion in 2018. Over this time period, the real GDP growth rate is

Classical growth theory asserts that

Which of the following statements regarding human capital is INCORRECT?

Explain how the labor market and the production function determine potential GDP.

Since 1980, which of the following countries had average growth rates in real GDP per person higher than that of the United States?

Which of the following is NOT an important factor affecting growth in labor productivity?

The labor force participation rate

An advance in technology shifts the production function upward and shifts the labor

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

-In the above figure, if the real wage is $10 per hour, a labor

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth. Based on your understanding of growth theory and growth accounting, what would you suggest?

The relationship between education and economic growth can best be summarized by saying that

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

How will an increase in physical capital affect labor productivity, labor demand, and potential GDP?

Classical growth theory argues that when real GDP per person rises above the subsistence level

Suppose real GDP for a country is $13 trillion in 2015, $14 trillion in 2016, $15 trillion in 2017, and $16 trillion in 2018. Over this time period, the real GDP growth rate is

Classical growth theory asserts that

Which of the following statements regarding human capital is INCORRECT?

Explain how the labor market and the production function determine potential GDP.

Since 1980, which of the following countries had average growth rates in real GDP per person higher than that of the United States?

Which of the following is NOT an important factor affecting growth in labor productivity?

The labor force participation rate

An advance in technology shifts the production function upward and shifts the labor

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