Question 1

Human capital is defined as

Accepted Answer

A)  the skills and knowledge possessed by workers 
B)  the tools used by labor 
C)  equipment and machinery used to train workers 
D)  buildings purchased by households rather than by businesses 
E)  equipment and machinery used to aid household production and increase available leisure time 
A)  the skills and knowledge possessed by workers 
B)  the tools used by labor 
C)  equipment and machinery used to train workers 
D)  buildings purchased by households rather than by businesses 
E)  equipment and machinery used to aid household production and increase available leisure time A

Question 2

If you observed that the both the wage rate and employment increased,which of the following would be a possible explanation?

Accepted Answer

A)  A decrease in labor demand 
B)  An increase in labor demand that outpaced an increase in labor supply 
C)  A decrease in labor demand coupled with an increase in labor supply 
D)  A decrease in labor supply 
E)  An increase in labor supply that outpaced an increase in labor demand 
A)  A decrease in labor demand 
B)  An increase in labor demand that outpaced an increase in labor supply 
C)  A decrease in labor demand coupled with an increase in labor supply 
D)  A decrease in labor supply 
E)  An increase in labor supply that outpaced an increase in labor demand B

Question 3

Many less developed countries have low rates of economic growth because

Accepted Answer

A)  high population growth rates reduce living standards 
B)  low population growth rates result in an inadequate labor supply 
C)  high current output per capita reduces incentives for growth 
D)  interest rates are too high 
E)  they invest too much in infrastructure leaving little for private capital investment 
A)  high population growth rates reduce living standards 
B)  low population growth rates result in an inadequate labor supply 
C)  high current output per capita reduces incentives for growth 
D)  interest rates are too high 
E)  they invest too much in infrastructure leaving little for private capital investment A

Question 4

Economic growth is defined as a long-run increase in an economy's

Accepted Answer

A)  resources 
B)  employment rate 
C)  total output of goods and services 
D)  level of profits 
E)  money supply 
A)  resources 
B)  employment rate 
C)  total output of goods and services 
D)  level of profits 
E)  money supply

Question 5

If the labor demand decreases,what will happen to the real wage,employment,and output,assuming no change in the labor supply?

Accepted Answer

A)  The real wage will increase,employment will decrease,and real output will increase. 
B)  The real wage will decrease,employment will decrease,and real output will increase. 
C)  The real wage will increase,employment will decrease,and real output will decrease. 
D)  The real wage will increase,employment will increase,and real output will increase. 
E)  The real wage will decrease,employment will decrease,and real output will decrease. 
A)  The real wage will increase,employment will decrease,and real output will increase. 
B)  The real wage will decrease,employment will decrease,and real output will increase. 
C)  The real wage will increase,employment will decrease,and real output will decrease. 
D)  The real wage will increase,employment will increase,and real output will increase. 
E)  The real wage will decrease,employment will decrease,and real output will decrease.

Question 6

Why does increasing employment not necessarily increase living standards?

Accepted Answer

A)  Productivity always increases as employment increases. 
B)  Living standards and employment are always positively related. 
C)  Increasing employment may not be accompanied by higher real wages 
D)  There is no upper limit to labor force participation. 
E)  Real wages are not adjusted for inflation. 
A)  Productivity always increases as employment increases. 
B)  Living standards and employment are always positively related. 
C)  Increasing employment may not be accompanied by higher real wages 
D)  There is no upper limit to labor force participation. 
E)  Real wages are not adjusted for inflation.

Question 7

Which of the following mathematical statements is correct

Accepted Answer

A)  Total Output=Productivity x Average Hours x the employment-population ratio x Population 
B)  Total Output=Productivity / Average Hours x the employment-population ratio / Population 
C)  Total Output=Productivity + Average Hours + the employment-population ratio + Population 
D)  Total Output=(Productivity x Average Hours)/ (the employment-population ratio x Population) 
E)  Total Output=Productivity x Average Hours x the employment-population ratio 
A)  Total Output=Productivity x Average Hours x the employment-population ratio x Population 
B)  Total Output=Productivity / Average Hours x the employment-population ratio / Population 
C)  Total Output=Productivity + Average Hours + the employment-population ratio + Population 
D)  Total Output=(Productivity x Average Hours)/ (the employment-population ratio x Population) 
E)  Total Output=Productivity x Average Hours x the employment-population ratio

Question 8

Economic growth

Accepted Answer

A)  involves both benefits and costs 
B)  is beneficial to the economy only if it arises from population growth 
C)  is beneficial to the economy only if it arises from technological change 
D)  involves costs that usually outweigh the benefits 
E)  imposes costs because it requires a movement along the production possibilities frontier 
A)  involves both benefits and costs 
B)  is beneficial to the economy only if it arises from population growth 
C)  is beneficial to the economy only if it arises from technological change 
D)  involves costs that usually outweigh the benefits 
E)  imposes costs because it requires a movement along the production possibilities frontier

Question 9

If the government increases funding to college work-study programs,which of the following would happen in the labor market?

Accepted Answer

A)  Wages will increase and the labor force will increase. 
B)  The labor force will decrease but there will be an ambiguous change in the wage. 
C)  Wages will decrease and the labor force will increase. 
D)  The labor force will increase but there will be an ambiguous change in the wage. 
E)  Wages will increase and the labor force will decrease. 
A)  Wages will increase and the labor force will increase. 
B)  The labor force will decrease but there will be an ambiguous change in the wage. 
C)  Wages will decrease and the labor force will increase. 
D)  The labor force will increase but there will be an ambiguous change in the wage. 
E)  Wages will increase and the labor force will decrease.

Question 10

Suppose that the government reduces income taxes.Which of the following is the most likely result?

Accepted Answer

A)  An increase in human capital investment 
B)  A decrease in consumption 
C)  An increase in government spending 
D)  A decrease in government spending 
E)  A decrease in human capital investment. 
A)  An increase in human capital investment 
B)  A decrease in consumption 
C)  An increase in government spending 
D)  A decrease in government spending 
E)  A decrease in human capital investment.

Question 11

An increase in human capital

Accepted Answer

A)  is of secondary importance to economic growth compared to physical capital. 
B)  causes the production function to shift downward and become flatter. 
C)  causes the production function to shift upward. 
D)  causes the production function to shift downward. 
E)  can be separated from labor. 
A)  is of secondary importance to economic growth compared to physical capital. 
B)  causes the production function to shift downward and become flatter. 
C)  causes the production function to shift upward. 
D)  causes the production function to shift downward. 
E)  can be separated from labor.

Question 12

As China switches from catch-up growth to discovery-based growth,the pace of worldwide discoveries will increase and this will raise living standards

Accepted Answer

A)  in the countries that China trades with. 
B)  in China and its neighboring countries. 
C)  in the United States 
D)  in China 
E)  in all countries. 
A)  in the countries that China trades with. 
B)  in China and its neighboring countries. 
C)  in the United States 
D)  in China 
E)  in all countries.

Question 13

If both labor demand and labor supply fall,what will happen to the real wage,employment,and output?

Accepted Answer

A)  The real wage will increase,real output will increase,but the effect on employment depends upon the magnitudes of the shifts. 
B)  The real wage will increase,but the effects of employment and real output depend upon the magnitudes of the shifts. 
C)  The real wage,employment,and real output will all decrease. 
D)  Employment and real output will decrease,but the effect on the real wage depends upon the magnitudes of the shifts. 
E)  The real wage,employment,and real output will all increase. 
A)  The real wage will increase,real output will increase,but the effect on employment depends upon the magnitudes of the shifts. 
B)  The real wage will increase,but the effects of employment and real output depend upon the magnitudes of the shifts. 
C)  The real wage,employment,and real output will all decrease. 
D)  Employment and real output will decrease,but the effect on the real wage depends upon the magnitudes of the shifts. 
E)  The real wage,employment,and real output will all increase.

Question 14

A tax cut designed to encourage investment and stimulate economic growth

Accepted Answer

A)  must be matched by a cut in government spending in order to be effective 
B)  must be matched with tax increases in other areas,or with a cut in government spending,if crowding out is to be avoided 
C)  will only work if it decreases the size of the budget deficit 
D)  can only be effective if the tax burden is redistributed or government spending is cut 
E)  will only work if it is a cut in the capital gains tax 
A)  must be matched by a cut in government spending in order to be effective 
B)  must be matched with tax increases in other areas,or with a cut in government spending,if crowding out is to be avoided 
C)  will only work if it decreases the size of the budget deficit 
D)  can only be effective if the tax burden is redistributed or government spending is cut 
E)  will only work if it is a cut in the capital gains tax

Question 15

Most nations do not push the rate of economic growth to the maximum because

Accepted Answer

A)  it would be impossible to do so 
B)  they do not know how to do so 
C)  there is an opportunity cost associated with economic growth 
D)  maximum growth would create an inefficient economy 
E)  government budget deficits prevent them from doing so 
A)  it would be impossible to do so 
B)  they do not know how to do so 
C)  there is an opportunity cost associated with economic growth 
D)  maximum growth would create an inefficient economy 
E)  government budget deficits prevent them from doing so

Question 16

What would be the effect of a reduction in the corporate profits tax?

Accepted Answer

A)  Investment would decrease,the production function would shift downward,productivity would decrease,and so would output. 
B)  Investment would increase,the production function would shift upward,productivity would increase and output would decrease. 
C)  Investment would increase,the production function would shift upward,and both productivity and output would increase. 
D)  Investment would decrease,the production function would shift downward,and both productivity and output would increase. 
E)  Investment would increase,the production function would shift upward,productivity would decrease and output would increase. 
A)  Investment would decrease,the production function would shift downward,productivity would decrease,and so would output. 
B)  Investment would increase,the production function would shift upward,productivity would increase and output would decrease. 
C)  Investment would increase,the production function would shift upward,and both productivity and output would increase. 
D)  Investment would decrease,the production function would shift downward,and both productivity and output would increase. 
E)  Investment would increase,the production function would shift upward,productivity would decrease and output would increase.

Question 17

If a nation uses all of its resources to produce capital goods,that will

Accepted Answer

A)  force the government to increase its spending 
B)  leave the production function unchanged 
C)  rapidly increase the profitability of business firms 
D)  raise income and capital gains taxes 
E)  leave no resources available to produce consumption goods 
A)  force the government to increase its spending 
B)  leave the production function unchanged 
C)  rapidly increase the profitability of business firms 
D)  raise income and capital gains taxes 
E)  leave no resources available to produce consumption goods

Question 18

Economists who focus on long-run growth suggest that the government could lower taxes on labor income in order to increase employment.

Accepted Answer

A) True 
 B)False

Question 19

The employment-to-population ratio in the U.S.is expected to decline as the baby boom generation retires.

Accepted Answer

A) True 
 B)False

Question 20

If the government wants to encourage spending on research and development,it should

Accepted Answer

A)  reduce patent protection so many individuals can use new products in their own research 
B)  shorten the number of years during which a developer has exclusive patent rights to market an invention 
C)  increase the number of years during which an inventor has exclusive patent rights to market an invention 
D)  raise tax rates on corporate profits to raise money for the research 
E)  encourage firms and households to spend money instead of saving it 
A)  reduce patent protection so many individuals can use new products in their own research 
B)  shorten the number of years during which a developer has exclusive patent rights to market an invention 
C)  increase the number of years during which an inventor has exclusive patent rights to market an invention 
D)  raise tax rates on corporate profits to raise money for the research 
E)  encourage firms and households to spend money instead of saving it

Human capital is defined as

If you observed that the both the wage rate and employment increased,which of the following would be a possible explanation?

Many less developed countries have low rates of economic growth because

Economic growth is defined as a long-run increase in an economy's

If the labor demand decreases,what will happen to the real wage,employment,and output,assuming no change in the labor supply?

Why does increasing employment not necessarily increase living standards?

Which of the following mathematical statements is correct

Economic growth

If the government increases funding to college work-study programs,which of the following would happen in the labor market?

Suppose that the government reduces income taxes.Which of the following is the most likely result?

An increase in human capital

As China switches from catch-up growth to discovery-based growth,the pace of worldwide discoveries will increase and this will raise living standards

If both labor demand and labor supply fall,what will happen to the real wage,employment,and output?

A tax cut designed to encourage investment and stimulate economic growth

Most nations do not push the rate of economic growth to the maximum because

What would be the effect of a reduction in the corporate profits tax?

If a nation uses all of its resources to produce capital goods,that will

Economists who focus on long-run growth suggest that the government could lower taxes on labor income in order to increase employment.

The employment-to-population ratio in the U.S.is expected to decline as the baby boom generation retires.

If the government wants to encourage spending on research and development,it should

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 9: Economic Growth and Rising Living Standards

Human capital is defined as

If you observed that the both the wage rate and employment increased,which of the following would be a possible explanation?

Many less developed countries have low rates of economic growth because

Economic growth is defined as a long-run increase in an economy's

If the labor demand decreases,what will happen to the real wage,employment,and output,assuming no change in the labor supply?

Why does increasing employment not necessarily increase living standards?

Which of the following mathematical statements is correct

Economic growth

If the government increases funding to college work-study programs,which of the following would happen in the labor market?

Suppose that the government reduces income taxes.Which of the following is the most likely result?

An increase in human capital

As China switches from catch-up growth to discovery-based growth,the pace of worldwide discoveries will increase and this will raise living standards

If both labor demand and labor supply fall,what will happen to the real wage,employment,and output?

A tax cut designed to encourage investment and stimulate economic growth

Most nations do not push the rate of economic growth to the maximum because

What would be the effect of a reduction in the corporate profits tax?

If a nation uses all of its resources to produce capital goods,that will

Economists who focus on long-run growth suggest that the government could lower taxes on labor income in order to increase employment.

The employment-to-population ratio in the U.S.is expected to decline as the baby boom generation retires.

If the government wants to encourage spending on research and development,it should

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters