Question 1

In order to enjoy a rising standard of living standard,a nation's capital stock must grow faster than

Accepted Answer

A)  the rate of depreciation 
B)  the rate of inflation 
C)  its population 
D)  its financial assets 
E)  its overall rate of economic growth 
A)  the rate of depreciation 
B)  the rate of inflation 
C)  its population 
D)  its financial assets 
E)  its overall rate of economic growth

Question 2

Which of the following is a weakness in trying to get the wealthy to bear more of the burden of increasing growth in a less developed country?

Accepted Answer

A)  The wealthy do not have significant political power. 
B)  The wealthy can move their savings to other countries. 
C)  The wealthy do not have much money to tax. 
D)  The wealthy have large homes in their country and so are less likely to leave. 
E)  The wealthy have powerful businesses that they are unable to relocate. 
A)  The wealthy do not have significant political power. 
B)  The wealthy can move their savings to other countries. 
C)  The wealthy do not have much money to tax. 
D)  The wealthy have large homes in their country and so are less likely to leave. 
E)  The wealthy have powerful businesses that they are unable to relocate.

Question 3

If the government lowered the capital gains tax,what would be the effect in the loanable funds market? (Assume the government does not run a budget deficit. )

Accepted Answer

A)  Both the supply and demand for funds would increase,lowering the interest rate and raising investment spending. 
B)  The supply of funds would decrease,raising the interest rate and lowering investment spending. 
C)  The supply of funds would decrease,lowering both the interest rate and investment spending. 
D)  The supply of funds would increase,lowering both the interest rate and investment spending. 
E)  The supply of funds would increase,lowering the interest rate and raising investment spending. 
A)  Both the supply and demand for funds would increase,lowering the interest rate and raising investment spending. 
B)  The supply of funds would decrease,raising the interest rate and lowering investment spending. 
C)  The supply of funds would decrease,lowering both the interest rate and investment spending. 
D)  The supply of funds would increase,lowering both the interest rate and investment spending. 
E)  The supply of funds would increase,lowering the interest rate and raising investment spending.

Question 4

According to Thomas Malthus,the human race is doomed to suffer repeated famines and wars because

Accepted Answer

A)  population and food supply both increase arithmetically 
B)  population and food supply both increase geometrically 
C)  population increases arithmetically while food supply increases geometrically 
D)  population increases geometrically while food supply increases arithmetically 
E)  population increases exponentially while food supply increases geometrically 
A)  population and food supply both increase arithmetically 
B)  population and food supply both increase geometrically 
C)  population increases arithmetically while food supply increases geometrically 
D)  population increases geometrically while food supply increases arithmetically 
E)  population increases exponentially while food supply increases geometrically

Question 5

Each of the following would shift a nation's production possibilities frontier outward,but which is least likely to be accompanied by an increase in the standard of living?

Accepted Answer

A)  population growth 
B)  increased investment in private physical capital 
C)  increased investment in human capital 
D)  technological advances 
E)  increased investment in infrastructure 
A)  population growth 
B)  increased investment in private physical capital 
C)  increased investment in human capital 
D)  technological advances 
E)  increased investment in infrastructure

Question 6

Which of the following is a reason why the labor demand curve would shift rightward?

Accepted Answer

A)  A decrease in the amount of capital equipment 
B)  An increase in educational attainment of the population 
C)  A shift to earlier retirement 
D)  An increase in population 
E)  An increase in the number of two-family households 
A)  A decrease in the amount of capital equipment 
B)  An increase in educational attainment of the population 
C)  A shift to earlier retirement 
D)  An increase in population 
E)  An increase in the number of two-family households

Question 7

Suppose you observed that at the same time employment increased,wages fell.Which of the following is a possible explanation for this observation?

Accepted Answer

A)  An increase in labor demand 
B)  A decrease in labor demand 
C)  An increase in labor demand that was outpaced by an increase in labor supply 
D)  A decrease in labor supply 
E)  Cannot be determined from the available information. 
A)  An increase in labor demand 
B)  A decrease in labor demand 
C)  An increase in labor demand that was outpaced by an increase in labor supply 
D)  A decrease in labor supply 
E)  Cannot be determined from the available information.

Question 8

Government policies designed to increase the skills of the work force shift the labor demand curve to the right,increasing employment and total output.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  Increases in employment 
B)  Increases in the capital stock 
C)  Improvements in technology 
D)  Government transfer programs 
E)  Political stability and an efficient legal system 
A)  Increases in employment 
B)  Increases in the capital stock 
C)  Improvements in technology 
D)  Government transfer programs 
E)  Political stability and an efficient legal system

Question 10

-Refer to Figure 9-7.Everything else equal,which efficient production point will result in the least economic growth?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  all points would promote growth equally 
A)  A 
B)  B 
C)  C 
D)  D 
E)  all points would promote growth equally

Question 11

-Refer to Figure 9-14.Which of the following combination of policies would shift the curves as indicated?

Accepted Answer

A)  A decrease in income tax rates coupled with increased employment subsidies to firms. 
B)  An increase in income tax rates coupled with increased employment subsidies to firms. 
C)  An increase in the safety net available to individuals coupled with a decrease in income tax rates. 
D)  Increased employment subsidies available to firms coupled with an increase in the safety net available to firms. 
E)  A decrease in income tax rates. 
A)  A decrease in income tax rates coupled with increased employment subsidies to firms. 
B)  An increase in income tax rates coupled with increased employment subsidies to firms. 
C)  An increase in the safety net available to individuals coupled with a decrease in income tax rates. 
D)  Increased employment subsidies available to firms coupled with an increase in the safety net available to firms. 
E)  A decrease in income tax rates.

Question 12

Which of the following would lead to an (eventual)increase in the labor force by shifting the labor demand curve?

Accepted Answer

A)  A trend toward earlier retirement ages 
B)  An increase in the working-age population 
C)  A reduction in the number of guaranteed student loans 
D)  An increase in college work-study programs 
E)  A decrease in personal income tax rates 
A)  A trend toward earlier retirement ages 
B)  An increase in the working-age population 
C)  A reduction in the number of guaranteed student loans 
D)  An increase in college work-study programs 
E)  A decrease in personal income tax rates

Question 13

-Refer to Figure 9-6.Starting from a $200 billion deficit,the government reduces spending and eliminates the deficit.Investment spending will

Accepted Answer

A)  decrease by $100 billion 
B)  decrease by $200 billion 
C)  increase by $100 billion 
D)  increase by $200 billion 
E)  not be affected by government budget deficit 
A)  decrease by $100 billion 
B)  decrease by $200 billion 
C)  increase by $100 billion 
D)  increase by $200 billion 
E)  not be affected by government budget deficit

Question 14

Which of the following statements best describes the U.S.labor force since World War II?

Accepted Answer

A)  Total employment grew,but the labor force participation rate fell. 
B)  Total employment grew,and so did the labor force participation rate. 
C)  Total employment grew,but the labor force participation rate remained unchanged. 
D)  Total employment remained constant,but the labor force participation rate fell. 
E)  Total employment remained constant,but the labor force participation rate rose. 
A)  Total employment grew,but the labor force participation rate fell. 
B)  Total employment grew,and so did the labor force participation rate. 
C)  Total employment grew,but the labor force participation rate remained unchanged. 
D)  Total employment remained constant,but the labor force participation rate fell. 
E)  Total employment remained constant,but the labor force participation rate rose.

Question 15

What happens to a production possibilities frontier (with capital goods on the vertical axis and consumption goods on the horizontal axis)when there is technological improvement?

Accepted Answer

A)  The entire frontier shifts outward. 
B)  The upper part shifts outward while the lower part shifts inward. 
C)  Nothing;there is no movement of the frontier. 
D)  The entire frontier shifts inward. 
E)  The lower part of the curve shifts outward while the upper part shifts inward. 
A)  The entire frontier shifts outward. 
B)  The upper part shifts outward while the lower part shifts inward. 
C)  Nothing;there is no movement of the frontier. 
D)  The entire frontier shifts inward. 
E)  The lower part of the curve shifts outward while the upper part shifts inward.

Question 16

The track record of foreign assistance

Accepted Answer

A)  is not very clear. 
B)  shows that it have been very successful in helping poor countries. 
C)  has enhanced the protection of private property rights in less developed countries. 
D)  has drastically reduced corruption in less developed countries. 
E)  has made most economists skeptical. 
A)  is not very clear. 
B)  shows that it have been very successful in helping poor countries. 
C)  has enhanced the protection of private property rights in less developed countries. 
D)  has drastically reduced corruption in less developed countries. 
E)  has made most economists skeptical.

Question 17

Which of the following is a reason why a country barely at subsistence levels cannot achieve growth very easily?

Accepted Answer

A)  It cannot decrease capital goods in order to increase consumption goods. 
B)  The lower income means that Say's law does not apply here. 
C)  Too much savings exist and therefore it remains underutilized. 
D)  It cannot decrease consumption goods in order to increase capital goods. 
E)  It cannot decrease capital goods in order to also decrease consumption goods. 
A)  It cannot decrease capital goods in order to increase consumption goods. 
B)  The lower income means that Say's law does not apply here. 
C)  Too much savings exist and therefore it remains underutilized. 
D)  It cannot decrease consumption goods in order to increase capital goods. 
E)  It cannot decrease capital goods in order to also decrease consumption goods.

Question 18

Everything else equal,as increase in investment in physical and human capital will mean lower living standards in the present,because the opportunity cost of investment is foregone consumer goods.

Accepted Answer

A) True 
 B)False

Question 19

-Refer to Figure 9-13.An increased labor supply on the graph would

Accepted Answer

A)  decrease total output 
B)  increase total output at a constant rate 
C)  increase total output at an increasing rate 
D)  increase total output at a decreasing rate 
E)  not change total output 
A)  decrease total output 
B)  increase total output at a constant rate 
C)  increase total output at an increasing rate 
D)  increase total output at a decreasing rate 
E)  not change total output

Question 20

An increase in the capital stock causes labor productivity to

Accepted Answer

A)  decrease and the standard of living to increase 
B)  increase and the standard of living to decrease 
C)  decrease and the standard of living to decrease 
D)  increase while the standard of living remains constant 
E)  increase and the standard of living to increase 
A)  decrease and the standard of living to increase 
B)  increase and the standard of living to decrease 
C)  decrease and the standard of living to decrease 
D)  increase while the standard of living remains constant 
E)  increase and the standard of living to increase

In order to enjoy a rising standard of living standard,a nation's capital stock must grow faster than

Which of the following is a weakness in trying to get the wealthy to bear more of the burden of increasing growth in a less developed country?

If the government lowered the capital gains tax,what would be the effect in the loanable funds market? (Assume the government does not run a budget deficit. )

According to Thomas Malthus,the human race is doomed to suffer repeated famines and wars because

Each of the following would shift a nation's production possibilities frontier outward,but which is least likely to be accompanied by an increase in the standard of living?

Which of the following is a reason why the labor demand curve would shift rightward?

Suppose you observed that at the same time employment increased,wages fell.Which of the following is a possible explanation for this observation?

Government policies designed to increase the skills of the work force shift the labor demand curve to the right,increasing employment and total output.

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

-Refer to Figure 9-7.Everything else equal,which efficient production point will result in the least economic growth?

-Refer to Figure 9-14.Which of the following combination of policies would shift the curves as indicated?

Which of the following would lead to an (eventual)increase in the labor force by shifting the labor demand curve?

-Refer to Figure 9-6.Starting from a $200 billion deficit,the government reduces spending and eliminates the deficit.Investment spending will

Which of the following statements best describes the U.S.labor force since World War II?

What happens to a production possibilities frontier (with capital goods on the vertical axis and consumption goods on the horizontal axis)when there is technological improvement?

The track record of foreign assistance

Which of the following is a reason why a country barely at subsistence levels cannot achieve growth very easily?

Everything else equal,as increase in investment in physical and human capital will mean lower living standards in the present,because the opportunity cost of investment is foregone consumer goods.

-Refer to Figure 9-13.An increased labor supply on the graph would

An increase in the capital stock causes labor productivity to

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

In order to enjoy a rising standard of living standard,a nation's capital stock must grow faster than

Which of the following is a weakness in trying to get the wealthy to bear more of the burden of increasing growth in a less developed country?

If the government lowered the capital gains tax,what would be the effect in the loanable funds market? (Assume the government does not run a budget deficit. )

According to Thomas Malthus,the human race is doomed to suffer repeated famines and wars because

Each of the following would shift a nation's production possibilities frontier outward,but which is least likely to be accompanied by an increase in the standard of living?

Which of the following is a reason why the labor demand curve would shift rightward?

Suppose you observed that at the same time employment increased,wages fell.Which of the following is a possible explanation for this observation?

Government policies designed to increase the skills of the work force shift the labor demand curve to the right,increasing employment and total output.

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

-Refer to Figure 9-7.Everything else equal,which efficient production point will result in the least economic growth?

-Refer to Figure 9-14.Which of the following combination of policies would shift the curves as indicated?

Which of the following would lead to an (eventual)increase in the labor force by shifting the labor demand curve?

-Refer to Figure 9-6.Starting from a $200 billion deficit,the government reduces spending and eliminates the deficit.Investment spending will

Which of the following statements best describes the U.S.labor force since World War II?

What happens to a production possibilities frontier (with capital goods on the vertical axis and consumption goods on the horizontal axis)when there is technological improvement?

The track record of foreign assistance

Which of the following is a reason why a country barely at subsistence levels cannot achieve growth very easily?

Everything else equal,as increase in investment in physical and human capital will mean lower living standards in the present,because the opportunity cost of investment is foregone consumer goods.

-Refer to Figure 9-13.An increased labor supply on the graph would

An increase in the capital stock causes labor productivity to

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