Question 1

The growth rate of potential GDP is the sum of two other growth rates.These other growth rates are

Accepted Answer

A)  population and resource base. 
B)  goods output and services output. 
C)  labor input and labor hours worked. 
D)  labor input and labor productivity. 
A)  population and resource base. 
B)  goods output and services output. 
C)  labor input and labor hours worked. 
D)  labor input and labor productivity.

Question 2

Labor productivity is defined as

Accepted Answer

A)  the amount of output a typical worker turns out in an hour of work. 
B)  the amount of output the best worker turns out in a day of work. 
C)  the amount of output improvement in a year of work. 
D)  the amount of average output improvement for a team in a year of work. 
A)  the amount of output a typical worker turns out in an hour of work. 
B)  the amount of output the best worker turns out in a day of work. 
C)  the amount of output improvement in a year of work. 
D)  the amount of average output improvement for a team in a year of work.

Question 3

The real wage rate is defined as the wage rate divided by

Accepted Answer

A)  the interest rate. 
B)  the money supply. 
C)  nominal GDP. 
D)  the price level. 
A)  the interest rate. 
B)  the money supply. 
C)  nominal GDP. 
D)  the price level.

Question 4

One of the key factors that determine an economy's real GDP is labor productivity,which is a measure of

Accepted Answer

A)  output per hour of work. 
B)  labor force per hour. 
C)  input per hour worked. 
D)  total hours worked. 
A)  output per hour of work. 
B)  labor force per hour. 
C)  input per hour worked. 
D)  total hours worked.

Question 5

Economists generally assume that ____ economic growth is better for society.

Accepted Answer

A)  slower 
B)  faster 
C)  stable 
D)  declining 
A)  slower 
B)  faster 
C)  stable 
D)  declining

Question 6

The nominal interest rate is the sum of the

Accepted Answer

A)  real interest rate and the historic rate of inflation. 
B)  real interest rate and the expected rate of inflation. 
C)  historic rate of inflation and the expected rate of inflation. 
D)  expected rate of inflation and the rate of price level increase. 
A)  real interest rate and the historic rate of inflation. 
B)  real interest rate and the expected rate of inflation. 
C)  historic rate of inflation and the expected rate of inflation. 
D)  expected rate of inflation and the rate of price level increase.

Question 7

When inflation occurs,

Accepted Answer

A)  real wages must necessarily fall. 
B)  real wages must necessarily rise. 
C)  workers will experience falling real incomes. 
D)  workers' real income may rise or fall. 
A)  real wages must necessarily fall. 
B)  real wages must necessarily rise. 
C)  workers will experience falling real incomes. 
D)  workers' real income may rise or fall.

Question 8

Growth in potential GDP depends on

Accepted Answer

A)  the labor force growth rate, capital stock growth rate, and rate of technical progress. 
B)  government spending, growth in prices, and labor productivity. 
C)  cyclical fluctuations and growth in the capital stock. 
D)  growth in real GDP, nominal GDP, and the population. 
A)  the labor force growth rate, capital stock growth rate, and rate of technical progress. 
B)  government spending, growth in prices, and labor productivity. 
C)  cyclical fluctuations and growth in the capital stock. 
D)  growth in real GDP, nominal GDP, and the population.

Question 9

Faster economic growth imposes an opportunity cost in the form of

Accepted Answer

A)  reduced current consumption. 
B)  a larger capital stock. 
C)  increased investment. 
D)  increased future income. 
A)  reduced current consumption. 
B)  a larger capital stock. 
C)  increased investment. 
D)  increased future income.

Question 10

If the discouraged workers were included in the labor force,

Accepted Answer

A)  the unemployment rate would fall. 
B)  the labor force would decrease. 
C)  the employment rate would rise. 
D)  the unemployment rate would rise. 
A)  the unemployment rate would fall. 
B)  the labor force would decrease. 
C)  the employment rate would rise. 
D)  the unemployment rate would rise.

Question 11

If an economy is experiencing deflation,a decrease in the price level,then the most advantageous actions would be

Accepted Answer

A)  borrowing money at a fixed interest rate and buying a house. 
B)  borrowing money at a fixed interest rate and buying land. 
C)  keeping money in a checking account. 
D)  keeping your wealth in gold and other precious metals. 
A)  borrowing money at a fixed interest rate and buying a house. 
B)  borrowing money at a fixed interest rate and buying land. 
C)  keeping money in a checking account. 
D)  keeping your wealth in gold and other precious metals.

Question 12

Workers in country A receive an increase in wages of 10 percent at the same time the inflation rate in country A is 8 percent.Workers in country B receive an increase in wages of 3 percent and the inflation rate in country B is 1 percent.In which country are workers better off?

Accepted Answer

A)  Country A because their real wages rise by 18 percent. 
B)  Country A because their real wages rise by 10 percent. 
C)  Country B because the inflation rate is lower. 
D)  Neither country because the increase in real wages is the same. 
A)  Country A because their real wages rise by 18 percent. 
B)  Country A because their real wages rise by 10 percent. 
C)  Country B because the inflation rate is lower. 
D)  Neither country because the increase in real wages is the same.

Question 13

Unemployment rates differ widely among various groups in the population.

Accepted Answer

A) True 
 B)False

Question 14

Taxes on capital gains and interest decline as inflation rates increase.

Accepted Answer

A) True 
 B)False

Question 15

Throughout the period from 1996 to 2010,U.S.Real GDP growth has been

Accepted Answer

A)  constant. 
B)  declining. 
C)  steadily increasing. 
D)  fluctuating. 
A)  constant. 
B)  declining. 
C)  steadily increasing. 
D)  fluctuating.

Question 16

When prices rise

Accepted Answer

A)  the rich benefit at the expense of the poor. 
B)  the poor benefit at the expense of the rich. 
C)  both the rich and poor lose real income. 
D)  the effect in the rich and poor is uncertain. 
A)  the rich benefit at the expense of the poor. 
B)  the poor benefit at the expense of the rich. 
C)  both the rich and poor lose real income. 
D)  the effect in the rich and poor is uncertain.

Question 17

When real GDP grows more slowly than potential GDP,

Accepted Answer

A)  nominal GDP rises. 
B)  the unemployment rate falls. 
C)  labor productivity falls. 
D)  the unemployment rate rises. 
A)  nominal GDP rises. 
B)  the unemployment rate falls. 
C)  labor productivity falls. 
D)  the unemployment rate rises.

Question 18

In the analysis of potential GDP,labor and capital are considered

Accepted Answer

A)  inputs. 
B)  final goods and services. 
C)  byproducts of economic growth. 
D)  outputs. 
A)  inputs. 
B)  final goods and services. 
C)  byproducts of economic growth. 
D)  outputs.

Question 19

Real GDP is the product of the

Accepted Answer

A)  total hours of work times the labor force. 
B)  labor force times the output per hour. 
C)  nation's capital stock times the output per hour. 
D)  total hours of work times the output per hour. 
A)  total hours of work times the labor force. 
B)  labor force times the output per hour. 
C)  nation's capital stock times the output per hour. 
D)  total hours of work times the output per hour.

Question 20

The arithmetic difference between the nominal rate of interest and the expected rate of inflation is the

Accepted Answer

A)  expected interest rate. 
B)  real interest rate. 
C)  implied interest rate. 
D)  contractual interest rate. 
A)  expected interest rate. 
B)  real interest rate. 
C)  implied interest rate. 
D)  contractual interest rate.

The growth rate of potential GDP is the sum of two other growth rates.These other growth rates are

Labor productivity is defined as

The real wage rate is defined as the wage rate divided by

One of the key factors that determine an economy's real GDP is labor productivity,which is a measure of

Economists generally assume that ____ economic growth is better for society.

The nominal interest rate is the sum of the

When inflation occurs,

Growth in potential GDP depends on

Faster economic growth imposes an opportunity cost in the form of

If the discouraged workers were included in the labor force,

If an economy is experiencing deflation,a decrease in the price level,then the most advantageous actions would be

Workers in country A receive an increase in wages of 10 percent at the same time the inflation rate in country A is 8 percent.Workers in country B receive an increase in wages of 3 percent and the inflation rate in country B is 1 percent.In which country are workers better off?

Unemployment rates differ widely among various groups in the population.

Taxes on capital gains and interest decline as inflation rates increase.

Throughout the period from 1996 to 2010,U.S.Real GDP growth has been

When prices rise

When real GDP grows more slowly than potential GDP,

In the analysis of potential GDP,labor and capital are considered

Real GDP is the product of the

The arithmetic difference between the nominal rate of interest and the expected rate of inflation is the

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters

Exam 6: The Goals of Macroeconomic Policy

The growth rate of potential GDP is the sum of two other growth rates.These other growth rates are

Labor productivity is defined as

The real wage rate is defined as the wage rate divided by

One of the key factors that determine an economy's real GDP is labor productivity,which is a measure of

Economists generally assume that ____ economic growth is better for society.

The nominal interest rate is the sum of the

When inflation occurs,

Growth in potential GDP depends on

Faster economic growth imposes an opportunity cost in the form of

If the discouraged workers were included in the labor force,

If an economy is experiencing deflation,a decrease in the price level,then the most advantageous actions would be

Workers in country A receive an increase in wages of 10 percent at the same time the inflation rate in country A is 8 percent.Workers in country B receive an increase in wages of 3 percent and the inflation rate in country B is 1 percent.In which country are workers better off?

Unemployment rates differ widely among various groups in the population.

Taxes on capital gains and interest decline as inflation rates increase.

Throughout the period from 1996 to 2010,U.S.Real GDP growth has been

When prices rise

When real GDP grows more slowly than potential GDP,

In the analysis of potential GDP,labor and capital are considered

Real GDP is the product of the

The arithmetic difference between the nominal rate of interest and the expected rate of inflation is the

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters