Question 1

According to the new growth theory, competition

Accepted Answer

A)  reduces profit. 
B)  increases profit. 
C)  has no impact on real profit, only nominal profit. 
D)  is only theoretical because all firms are growing at some rate. 
A)  reduces profit. 
B)  increases profit. 
C)  has no impact on real profit, only nominal profit. 
D)  is only theoretical because all firms are growing at some rate.

Question 2

"Premier Liu Chao-shiuan announced Tuesday a government plan to distribute NT$82.9 billion (US$2.51 billion) in consumption coupons to Taiwan's citizens in a bid to stimulate ... economic growth." www.etaiwannews.com 11/18/2008
The Premier's plan to boost economic growth by boosting consumption

Accepted Answer

A)  will work because employment will increase. 
B)  will work because there will be a movement out along Taiwan's aggregate production function. 
C)  will not work because real GDP per person will decrease. 
D)  will not work because economic growth is boosted by labor productivity, not consumption. 
A)  will work because employment will increase. 
B)  will work because there will be a movement out along Taiwan's aggregate production function. 
C)  will not work because real GDP per person will decrease. 
D)  will not work because economic growth is boosted by labor productivity, not consumption.

Question 3

Neoclassical growth theory predicts that China's economic growth rate will

Accepted Answer

A)  decrease when the interest rate increases. 
B)  continue at around 10 percent a year. 
C)  always remain above the U.S. economic growth rate. 
D)  eventually converge to the U.S. economic growth rate. 
A)  decrease when the interest rate increases. 
B)  continue at around 10 percent a year. 
C)  always remain above the U.S. economic growth rate. 
D)  eventually converge to the U.S. economic growth rate.

Question 4

To achieve faster growth, one possibility is to tax

Accepted Answer

A)  consumption. 
B)  saving. 
C)  hiring. 
D)  immigration. 
A)  consumption. 
B)  saving. 
C)  hiring. 
D)  immigration.

Question 5

Discuss the aggregate production function. How does the aggregate production function relate to the labor market and potential GDP?

Accepted Answer

The aggregate production function shows

Question 6

Neoclassical growth theory predicts that

Accepted Answer

A)  advances in technology increase the productivity of capital, which leads to an increase in investment and rising real GDP per person. 
B)  advances in technology are a result of discoveries motivated by the pursuit of profits. 
C)  growth in real GDP can increase without any increase in investment. 
D)  growth in real GDP can continue indefinitely. 
A)  advances in technology increase the productivity of capital, which leads to an increase in investment and rising real GDP per person. 
B)  advances in technology are a result of discoveries motivated by the pursuit of profits. 
C)  growth in real GDP can increase without any increase in investment. 
D)  growth in real GDP can continue indefinitely.

Question 7

-The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will

Accepted Answer

A)  move to point such as Y. 
B)  remain at point W. 
C)  move to point such as X. 
D)  move to point such as Z. 
A)  move to point such as Y. 
B)  remain at point W. 
C)  move to point such as X. 
D)  move to point such as Z.

Question 8

________ is the knowledge and skill that people have obtained from education and on-the-job training.

Accepted Answer

A)  Labor productivity 
B)  Human capital 
C)  Capital 
D)  Technology 
A)  Labor productivity 
B)  Human capital 
C)  Capital 
D)  Technology

Question 9

On-the-job-training is an example of

Accepted Answer

A)  increasing labor force participation. 
B)  investment in human capital. 
C)  investment in physical capital. 
D)  technological change. 
A)  increasing labor force participation. 
B)  investment in human capital. 
C)  investment in physical capital. 
D)  technological change.

Question 10

________ predicts that real GDP per person can grow indefinitely.

Accepted Answer

A)  New growth theory 
B)  Classical growth theory 
C)  Profit growth theory 
D)  Neoclassical growth theory 
A)  New growth theory 
B)  Classical growth theory 
C)  Profit growth theory 
D)  Neoclassical growth theory

Question 11

What happens to the real wage rate and potential GDP if population increases?

Accepted Answer

An increase in population increases the

Question 12

An increase in the working-age population results in a

Accepted Answer

A)  rightward shift of demand for labor curve and an increase in potential GDP. 
B)  rightward shift of the demand for labor curve and no change in potential GDP. 
C)  rightward shift of the supply of labor curve and an increase in potential GDP. 
D)  leftward shift of the supply of labor curve and a decrease in potential GDP. 
A)  rightward shift of demand for labor curve and an increase in potential GDP. 
B)  rightward shift of the demand for labor curve and no change in potential GDP. 
C)  rightward shift of the supply of labor curve and an increase in potential GDP. 
D)  leftward shift of the supply of labor curve and a decrease in potential GDP.

Question 13

An important foundation of the new growth theory is that

Accepted Answer

A)  we will get more technological advances the more the government is involved in deciding which technology to pursue. 
B)  we will get more technological advances the greater the rewards people receive from making technological advances. 
C)  the growth rate of the capital stock is more important than the growth rate of new knowledge in generating economic growth. 
D)  improvements in labor productivity are poor measures of technological growth. 
A)  we will get more technological advances the more the government is involved in deciding which technology to pursue. 
B)  we will get more technological advances the greater the rewards people receive from making technological advances. 
C)  the growth rate of the capital stock is more important than the growth rate of new knowledge in generating economic growth. 
D)  improvements in labor productivity are poor measures of technological growth.

Question 14

-The people of Palm Island are willing to work 80 hours a day for a real wage rate of $4 an hour. Then each dollar increase in the real wage, they are willing to work 10 additional hours a day. Palm Island's production possibilities are in the table above.
a) Draw Palm Island's demand for labor curve.
b) Draw Palm Island's supply of labor curve.
c) What are the full-employment equilibrium real wage rate and quantity of labor in Palm Island's economy?
d) What is Palm Island's potential GDP?

Accepted Answer

@#IMG-DLM& a) See the figure above. Palm Island's

Question 15

Over the past 100 years, real GDP per person in the United States has grown at an average of ________ percent a year.

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 16

Between which pair of countries or continents listed below has real GDP per person converged the most since 1980?

Accepted Answer

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

Question 17

If the nation's capital stock increases so that workers become more productive, the

Accepted Answer

A)  demand for labor will increase. 
B)  supply of labor will increase. 
C)  demand for labor will decrease. 
D)  supply of labor will decrease. 
A)  demand for labor will increase. 
B)  supply of labor will increase. 
C)  demand for labor will decrease. 
D)  supply of labor will decrease.

Question 18

Labor productivity is

Accepted Answer

A)  real GDP per hour of labor times the hours of work. 
B)  real GDP per hour of labor times the number of people. 
C)  real GDP per hour of labor. 
D)  the rate of change in real GDP per hour of labor. 
A)  real GDP per hour of labor times the hours of work. 
B)  real GDP per hour of labor times the number of people. 
C)  real GDP per hour of labor. 
D)  the rate of change in real GDP per hour of labor.

Question 19

The aggregate production function shows how ________ varies with ________.

Accepted Answer

A)  leisure time; labor 
B)  labor; leisure time 
C)  real GDP; labor 
D)  labor; capital 
A)  leisure time; labor 
B)  labor; leisure time 
C)  real GDP; labor 
D)  labor; capital

Question 20

The neoclassical growth theory concluded that economic growth is temporary because of a population explosion that occurs as a result of economic growth.

Accepted Answer

A) True 
 B)False

According to the new growth theory, competition

"Premier Liu Chao-shiuan announced Tuesday a government plan to distribute NT$82.9 billion (US$2.51 billion) in consumption coupons to Taiwan's citizens in a bid to stimulate ... economic growth." www.etaiwannews.com 11/18/2008 The Premier's plan to boost economic growth by boosting consumption

Neoclassical growth theory predicts that China's economic growth rate will

To achieve faster growth, one possibility is to tax

Discuss the aggregate production function. How does the aggregate production function relate to the labor market and potential GDP?

Neoclassical growth theory predicts that

-The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will

________ is the knowledge and skill that people have obtained from education and on-the-job training.

On-the-job-training is an example of

________ predicts that real GDP per person can grow indefinitely.

What happens to the real wage rate and potential GDP if population increases?

An increase in the working-age population results in a

An important foundation of the new growth theory is that

Over the past 100 years, real GDP per person in the United States has grown at an average of ________ percent a year.

Between which pair of countries or continents listed below has real GDP per person converged the most since 1980?

If the nation's capital stock increases so that workers become more productive, the

Labor productivity is

The aggregate production function shows how varies with .

The neoclassical growth theory concluded that economic growth is temporary because of a population explosion that occurs as a result of economic growth.

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

According to the new growth theory, competition

"Premier Liu Chao-shiuan announced Tuesday a government plan to distribute NT$82.9 billion (US$2.51 billion) in consumption coupons to Taiwan's citizens in a bid to stimulate ... economic growth." www.etaiwannews.com 11/18/2008 The Premier's plan to boost economic growth by boosting consumption

Neoclassical growth theory predicts that China's economic growth rate will

To achieve faster growth, one possibility is to tax

Discuss the aggregate production function. How does the aggregate production function relate to the labor market and potential GDP?

Neoclassical growth theory predicts that

-The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will

________ is the knowledge and skill that people have obtained from education and on-the-job training.

On-the-job-training is an example of

________ predicts that real GDP per person can grow indefinitely.

What happens to the real wage rate and potential GDP if population increases?

An increase in the working-age population results in a

An important foundation of the new growth theory is that

Over the past 100 years, real GDP per person in the United States has grown at an average of ________ percent a year.

Between which pair of countries or continents listed below has real GDP per person converged the most since 1980?

If the nation's capital stock increases so that workers become more productive, the

Labor productivity is

The aggregate production function shows how ________ varies with ________.

The neoclassical growth theory concluded that economic growth is temporary because of a population explosion that occurs as a result of economic growth.

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

The aggregate production function shows how varies with .