Question 1

Which of the following would not enhance economic growth?

Accepted Answer

A)  Subsidies for investments in physical capital 
B)  An increase in the corporate profits tax 
C)  Subsidies for investments in human capital 
D)  A tax cut that encourages saving 
E)  Subsidies for research and development expenditures 
A)  Subsidies for investments in physical capital 
B)  An increase in the corporate profits tax 
C)  Subsidies for investments in human capital 
D)  A tax cut that encourages saving 
E)  Subsidies for research and development expenditures

Question 2

Human capital consists of the skills and knowledge that workers possess.

Accepted Answer

A) True 
 B)False

Question 3

Economic growth in less-developed countries comes at the cost of

Accepted Answer

A)  higher taxes 
B)  lower current consumption 
C)  lower taxes 
D)  lower government spending 
E)  lower future consumption. 
A)  higher taxes 
B)  lower current consumption 
C)  lower taxes 
D)  lower government spending 
E)  lower future consumption.

Question 4

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

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 increase,and real output will increase. 
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 increase,and real output will increase.

Question 5

Government policies that help increase the skills of the workforce or that subsidize employment more directly would

Accepted Answer

A)  decrease employment and increase output 
B)  increase employment and decrease output 
C)  increase employment and increase output 
D)  increase unemployment and decrease output 
E)  increase unemployment and increase output 
A)  decrease employment and increase output 
B)  increase employment and decrease output 
C)  increase employment and increase output 
D)  increase unemployment and decrease output 
E)  increase unemployment and increase output

Question 6

Which of the following will lower the interest rate and increase investment spending?

Accepted Answer

A)  An increase in the demand for loanable funds 
B)  A decrease in the demand for loanable funds 
C)  An increase in the supply of loanable funds 
D)  A decrease in the supply of loanable funds 
E)  An equal and simultaneous decrease in the demand for and supply of loanable funds 
A)  An increase in the demand for loanable funds 
B)  A decrease in the demand for loanable funds 
C)  An increase in the supply of loanable funds 
D)  A decrease in the supply of loanable funds 
E)  An equal and simultaneous decrease in the demand for and supply of loanable funds

Question 7

Everything else equal,technological change will typically

Accepted Answer

A)  move the economy along a fixed production function,increasing both productivity and output 
B)  move the economy along a fixed production function,increasing output but lowering productivity 
C)  cause the production function to shift upward,increasing both output and productivity 
D)  cause the production function to shift upward,increasing output but lowering productivity 
E)  cause the production function to shift upward,increasing output but leaving productivity unchanged 
A)  move the economy along a fixed production function,increasing both productivity and output 
B)  move the economy along a fixed production function,increasing output but lowering productivity 
C)  cause the production function to shift upward,increasing both output and productivity 
D)  cause the production function to shift upward,increasing output but lowering productivity 
E)  cause the production function to shift upward,increasing output but leaving productivity unchanged

Question 8

The reform of the welfare system passed by Congress and signed by President Clinton changed the benefits for welfare recipients as it

Accepted Answer

A)  decreased the number of people eligible for benefits,increased the benefit amount for those still eligible,and set a maximum coverage period of five years 
B)  decreased the number of people eligible for benefits,cut the benefit amount for those still eligible,and set a maximum coverage period of three years 
C)  increased the number of people eligible for benefits,cut the benefit amount for those still eligible,and set a maximum coverage period of three years 
D)  decreased the number of people eligible for benefits,cut the benefit amount for those still eligible,and set a maximum coverage period of five years 
E)  froze the number of people eligible for benefits,cut the benefit amount for those still eligible,and set a maximum coverage period of three years 
A)  decreased the number of people eligible for benefits,increased the benefit amount for those still eligible,and set a maximum coverage period of five years 
B)  decreased the number of people eligible for benefits,cut the benefit amount for those still eligible,and set a maximum coverage period of three years 
C)  increased the number of people eligible for benefits,cut the benefit amount for those still eligible,and set a maximum coverage period of three years 
D)  decreased the number of people eligible for benefits,cut the benefit amount for those still eligible,and set a maximum coverage period of five years 
E)  froze the number of people eligible for benefits,cut the benefit amount for those still eligible,and set a maximum coverage period of three years

Question 9

Which of the following is not among the factors that influence economic growth?

Accepted Answer

A)  Increase in employment 
B)  Growth in physical capital stock 
C)  Technological progress 
D)  Lower government debt 
E)  An efficient political and legal system. 
A)  Increase in employment 
B)  Growth in physical capital stock 
C)  Technological progress 
D)  Lower government debt 
E)  An efficient political and legal system.

Question 10

A decrease in income taxes can help growth and harm growth at the same time.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is the definition of a capital gain?

Accepted Answer

A)  An increase in a firm's capital stock 
B)  Profit earned from selling a financial asset 
C)  The dividend earned from a company's stock 
D)  Taxes saved by selling a share of corporate stock 
E)  The profit earned by a corporation 
A)  An increase in a firm's capital stock 
B)  Profit earned from selling a financial asset 
C)  The dividend earned from a company's stock 
D)  Taxes saved by selling a share of corporate stock 
E)  The profit earned by a corporation

Question 12

Which of the following could cause the production function to shift upward?

Accepted Answer

A)  A decrease in the capital stock 
B)  An increase in the capital stock 
C)  An increase in population 
D)  A decrease in population 
E)  An increase in transfer payments 
A)  A decrease in the capital stock 
B)  An increase in the capital stock 
C)  An increase in population 
D)  A decrease in population 
E)  An increase in transfer payments

Question 13

Increases in investment spending cause interest rates to increase.As a result,

Accepted Answer

A)  households will demand more loanable funds 
B)  households will save a smaller fraction of their incomes 
C)  households will voluntarily decrease their consumption spending 
D)  the investment curve will shift leftward 
E)  firm will receive greater profits from households who are consuming goods 
A)  households will demand more loanable funds 
B)  households will save a smaller fraction of their incomes 
C)  households will voluntarily decrease their consumption spending 
D)  the investment curve will shift leftward 
E)  firm will receive greater profits from households who are consuming goods

Question 14

An increase in human capital would lead to

Accepted Answer

A)  a decrease in the standard of living 
B)  an upward shift of the production function 
C)  a decrease in productivity 
D)  cutbacks in government skill-training programs 
E)  a decrease of the capital stock 
A)  a decrease in the standard of living 
B)  an upward shift of the production function 
C)  a decrease in productivity 
D)  cutbacks in government skill-training programs 
E)  a decrease of the capital stock

Question 15

Everything else equal,an increase in the demand for labor will

Accepted Answer

A)  increase the real wage rate,employment,and real output 
B)  reduce the real wage rate,employment,and real output 
C)  increase the real wage rate but decrease employment and real output 
D)  reduce the real wage rate but increase employment and real output 
E)  increase the real wage rate and employment,but leave real output unchanged 
A)  increase the real wage rate,employment,and real output 
B)  reduce the real wage rate,employment,and real output 
C)  increase the real wage rate but decrease employment and real output 
D)  reduce the real wage rate but increase employment and real output 
E)  increase the real wage rate and employment,but leave real output unchanged

Question 16

If labor supply and labor demand both increase,employment

Accepted Answer

A)  and the real wage rate will both increase 
B)  will increase but the real wage rate will fall 
C)  will increase but the real wage rate will remain constant 
D)  and the real wage rate will remain constant 
E)  will increase but the effect on the real wage rate will depend on the magnitude of the shifts 
A)  and the real wage rate will both increase 
B)  will increase but the real wage rate will fall 
C)  will increase but the real wage rate will remain constant 
D)  and the real wage rate will remain constant 
E)  will increase but the effect on the real wage rate will depend on the magnitude of the shifts

Question 17

The employment-population ratio is

Accepted Answer

A)  percentage of the population unemployed 
B)  percentage of the population employed 
C)  the same as the unemployment rate 
D)  always greater than 1 
E)  percentage of the population employed by the private sector 
A)  percentage of the population unemployed 
B)  percentage of the population employed 
C)  the same as the unemployment rate 
D)  always greater than 1 
E)  percentage of the population employed by the private sector

Question 18

Income tax reductions can increase the profitability of human capital to households.

Accepted Answer

A) True 
 B)False

Question 19

Most of the growth in living standards over the last ten years can be attributed to growth in labor force participation.

Accepted Answer

A) True 
 B)False

Question 20

To have a rising standard of living,a nation's stock of capital must

Accepted Answer

A)  equal the amount of consumption in the country 
B)  grow faster than the population 
C)  be associated with a low rate of investment and high rate of consumption 
D)  grow slower than the population 
E)  decline to enable the production of essential consumption goods 
A)  equal the amount of consumption in the country 
B)  grow faster than the population 
C)  be associated with a low rate of investment and high rate of consumption 
D)  grow slower than the population 
E)  decline to enable the production of essential consumption goods

Which of the following would not enhance economic growth?

Human capital consists of the skills and knowledge that workers possess.

Economic growth in less-developed countries comes at the cost of

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

Government policies that help increase the skills of the workforce or that subsidize employment more directly would

Which of the following will lower the interest rate and increase investment spending?

Everything else equal,technological change will typically

The reform of the welfare system passed by Congress and signed by President Clinton changed the benefits for welfare recipients as it

Which of the following is not among the factors that influence economic growth?

A decrease in income taxes can help growth and harm growth at the same time.

Which of the following is the definition of a capital gain?

Which of the following could cause the production function to shift upward?

Increases in investment spending cause interest rates to increase.As a result,

An increase in human capital would lead to

Everything else equal,an increase in the demand for labor will

If labor supply and labor demand both increase,employment

The employment-population ratio is

Income tax reductions can increase the profitability of human capital to households.

Most of the growth in living standards over the last ten years can be attributed to growth in labor force participation.

To have a rising standard of living,a nation's stock of capital must

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

Which of the following would not enhance economic growth?

Human capital consists of the skills and knowledge that workers possess.

Economic growth in less-developed countries comes at the cost of

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

Government policies that help increase the skills of the workforce or that subsidize employment more directly would

Which of the following will lower the interest rate and increase investment spending?

Everything else equal,technological change will typically

The reform of the welfare system passed by Congress and signed by President Clinton changed the benefits for welfare recipients as it

Which of the following is not among the factors that influence economic growth?

A decrease in income taxes can help growth and harm growth at the same time.

Which of the following is the definition of a capital gain?

Which of the following could cause the production function to shift upward?

Increases in investment spending cause interest rates to increase.As a result,

An increase in human capital would lead to

Everything else equal,an increase in the demand for labor will

If labor supply and labor demand both increase,employment

The employment-population ratio is

Income tax reductions can increase the profitability of human capital to households.

Most of the growth in living standards over the last ten years can be attributed to growth in labor force participation.

To have a rising standard of living,a nation's stock of capital must

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