Question 1

If the demand for labor increases
I. employment increases.
II. the real wage rate increases.

Accepted Answer

A)  Only I is correct. 
B)  Only II is correct. 
C)  Both I and II are correct. 
D)  Neither I nor II is correct. 
A)  Only I is correct. 
B)  Only II is correct. 
C)  Both I and II are correct. 
D)  Neither I nor II is correct.

Question 2

A country in which real GDP per person has grown more slowly than the United States since 1980 would be

Accepted Answer

A)  Hong Kong. 
B)  Mexico. 
C)  Taiwan. 
D)  Singapore. 
A)  Hong Kong. 
B)  Mexico. 
C)  Taiwan. 
D)  Singapore.

Question 3

Classical economists believed that

Accepted Answer

A)  real GDP per person would rise above its subsistence level in the long run. 
B)  real GDP per person would never rise above its subsistence level in the long run. 
C)  the demand for labor increases when the population increases. 
D)  population growth decreases as real GDP per person rises. 
A)  real GDP per person would rise above its subsistence level in the long run. 
B)  real GDP per person would never rise above its subsistence level in the long run. 
C)  the demand for labor increases when the population increases. 
D)  population growth decreases as real GDP per person rises.

Question 4

Which one of the following statements about growth theories is CORRECT?

Accepted Answer

A)  In the new growth theory, knowledge is not subject to diminishing returns. 
B)  In neoclassical growth theory, technological progress is the result of rapid increases in saving and investment in capital per person. 
C)  In classical growth theory, real GDP per person is unrelated to the subsistence real GDP. 
D)  In classical growth theory physical resources are unlimited. 
A)  In the new growth theory, knowledge is not subject to diminishing returns. 
B)  In neoclassical growth theory, technological progress is the result of rapid increases in saving and investment in capital per person. 
C)  In classical growth theory, real GDP per person is unrelated to the subsistence real GDP. 
D)  In classical growth theory physical resources are unlimited.

Question 5

If the price level rises relative to the money wage rate, firms ________ the quantity of labor they demand and workers ________ the quantity of labor they supply.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease

Question 6

Suppose a nation's population grows by 2 percent and, at the same time, its GDP grows by 5 percent. Approximately how fast will real GDP per person increase?

Accepted Answer

A)  3 percent per year 
B)  2 percent per year 
C)  5 percent per year 
D)  10 percent per year 
A)  3 percent per year 
B)  2 percent per year 
C)  5 percent per year 
D)  10 percent per year

Question 7

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

Question 8

An assumption of the neoclassical theory of growth is that

Accepted Answer

A)  people receive only subsistence real GDP per person. 
B)  all technological advances are the result of chance. 
C)  the marginal product of all types of capital increases as more capital is accumulated. 
D)  knowledge has diminishing returns. 
A)  people receive only subsistence real GDP per person. 
B)  all technological advances are the result of chance. 
C)  the marginal product of all types of capital increases as more capital is accumulated. 
D)  knowledge has diminishing returns.

Question 9

Which of the following does NOT increase labor productivity?

Accepted Answer

A)  increases in aggregate hours 
B)  physical capital growth 
C)  human capital growth 
D)  technological advances 
A)  increases in aggregate hours 
B)  physical capital growth 
C)  human capital growth 
D)  technological advances

Question 10

Labor productivity rises

Accepted Answer

A)  if the amount of capital per worker increases. 
B)  in the absence of technological progress. 
C)  if firms invest in hiring more workers rather than buying more capital. 
D)  if the amount of capital per worker decreases. 
A)  if the amount of capital per worker increases. 
B)  in the absence of technological progress. 
C)  if firms invest in hiring more workers rather than buying more capital. 
D)  if the amount of capital per worker decreases.

Question 11

If real GDP is $800 million and aggregate labor hours are 20 million, labor productivity is

Accepted Answer

A)  $40 per hour. 
B)  $16,000 million. 
C)  $40 million. 
D)  $160 per hour. 
A)  $40 per hour. 
B)  $16,000 million. 
C)  $40 million. 
D)  $160 per hour.

Question 12

What is the effect on real GDP per person if labor productivity increases?

Accepted Answer

Real GDP equals (aggregate hours) × (lab

Question 13

The quantity of labor demanded depends on the

Accepted Answer

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

Question 14

How has the U.S. growth experience compared to that of Russia and Nigeria? How has compared to the recent experience of Asian nations such as Hong Kong and Singapore.

Accepted Answer

A persistent gap in the level of real GD

Question 15

Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded

Accepted Answer

A)  increases. 
B)  decreases. 
C)  does not change because there is no change in the money wage rate. 
D)  increases only if the price level also decreases. 
A)  increases. 
B)  decreases. 
C)  does not change because there is no change in the money wage rate. 
D)  increases only if the price level also decreases.

Question 16

If the money wage rate rises relative to the price level, firms ________ the quantity of labor they demand and workers ________ the quantity of labor they supply.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease

Question 17

-In the figure, when the real wage rate is $10 an hour,

Accepted Answer

A)  a shortage of labor exists and the real wage rate will rise. 
B)  the demand for labor will increase. 
C)  the demand for labor will decrease. 
D)  a surplus of labor exists and the real wage rate will fall. 
A)  a shortage of labor exists and the real wage rate will rise. 
B)  the demand for labor will increase. 
C)  the demand for labor will decrease. 
D)  a surplus of labor exists and the real wage rate will fall.

Question 18

A decrease in population 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 19

The gap between real GDP per person in the United States and Mexico has been narrowing since 1980.

Accepted Answer

A) True 
 B)False

Question 20

Suppose there is a rise in the price level, but no change in the money wage rate. As a result, the quantity of labor demanded

Accepted Answer

A)  increases. 
B)  decreases. 
C)  does not change because there is no change in the real wage rate. 
D)  decreases only if the money wage rate also decreases. 
A)  increases. 
B)  decreases. 
C)  does not change because there is no change in the real wage rate. 
D)  decreases only if the money wage rate also decreases.

If the demand for labor increases I. employment increases. II. the real wage rate increases.

A country in which real GDP per person has grown more slowly than the United States since 1980 would be

Classical economists believed that

Which one of the following statements about growth theories is CORRECT?

If the price level rises relative to the money wage rate, firms the quantity of labor they demand and workers the quantity of labor they supply.

Suppose a nation's population grows by 2 percent and, at the same time, its GDP grows by 5 percent. Approximately how fast will real GDP per person increase?

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

An assumption of the neoclassical theory of growth is that

Which of the following does NOT increase labor productivity?

Labor productivity rises

If real GDP is $800 million and aggregate labor hours are 20 million, labor productivity is

What is the effect on real GDP per person if labor productivity increases?

The quantity of labor demanded depends on the

How has the U.S. growth experience compared to that of Russia and Nigeria? How has compared to the recent experience of Asian nations such as Hong Kong and Singapore.

Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded

If the money wage rate rises relative to the price level, firms the quantity of labor they demand and workers the quantity of labor they supply.

-In the figure, when the real wage rate is $10 an hour,

A decrease in population shifts the

The gap between real GDP per person in the United States and Mexico has been narrowing since 1980.

Suppose there is a rise in the price level, but no change in the money wage rate. As a result, the quantity of labor demanded

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

If the demand for labor increases I. employment increases. II. the real wage rate increases.

A country in which real GDP per person has grown more slowly than the United States since 1980 would be

Classical economists believed that

Which one of the following statements about growth theories is CORRECT?

If the price level rises relative to the money wage rate, firms ________ the quantity of labor they demand and workers ________ the quantity of labor they supply.

Suppose a nation's population grows by 2 percent and, at the same time, its GDP grows by 5 percent. Approximately how fast will real GDP per person increase?

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

An assumption of the neoclassical theory of growth is that

Which of the following does NOT increase labor productivity?

Labor productivity rises

If real GDP is $800 million and aggregate labor hours are 20 million, labor productivity is

What is the effect on real GDP per person if labor productivity increases?

The quantity of labor demanded depends on the

How has the U.S. growth experience compared to that of Russia and Nigeria? How has compared to the recent experience of Asian nations such as Hong Kong and Singapore.

Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded

If the money wage rate rises relative to the price level, firms ________ the quantity of labor they demand and workers ________ the quantity of labor they supply.

-In the figure, when the real wage rate is $10 an hour,

A decrease in population shifts the

The gap between real GDP per person in the United States and Mexico has been narrowing since 1980.

Suppose there is a rise in the price level, but no change in the money wage rate. As a result, the quantity of labor demanded

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 price level rises relative to the money wage rate, firms the quantity of labor they demand and workers the quantity of labor they supply.

If the money wage rate rises relative to the price level, firms the quantity of labor they demand and workers the quantity of labor they supply.