Exam 8: Potential Gdp and the Natural Unemployment Rate

An efficiency wage is designed to

Which of the following ideas reflect the Monetarist macroeconomic model? i. The Monetarist model supports the Classical model, in general. ii. Decreases in the growth rate of the quantity of money trigger recessions. iii. Government intervention is an appropriate tool to steady the economy.

If the minimum wage is set

Define the production function.Discuss why the production function exhibits diminishing returns.

As the real wage rate rises, the opportunity cost of

As an economic expansion approaches its peak, it is very likely that real GDP will

For most years since 1980, the natural unemployment rate was higher in Canada than in the United States.What possible explanation for some of this difference has been suggested?

Employing an additional 1 billion hours of labor increases real GDP by $12 billion.Employing another 1 billion hours beyond the first 1 billion increases real GDP by $11 billion.Hence we can conclude from this information that as employment increases, real GDP

Data indicate that the natural unemployment rate in Canada is typically 3 percentage points higher than the U.S.natural unemployment rate.This difference is most likely the result of differences in

A firm's demand for labor depends on the

-The table above gives a nation's production function.Which of the following is NOT an attainable combination of real GDP and labor?

-The figure above shows the U.S.supply of labor curve.What was the affect of the decline in birth rates during the 1960s and 1970s on the supply of labor curve in the 1980s ?

Diminishing returns means that

The unemployment rate at full employment is

With fixed quantities of capital, land, and entrepreneurship and fixed technology, the amount of real GDP produced increases when ________ increases. i. the quantity of labor employed Ii) the inflation rate Iii) the price level

The quantity of labor demanded definitely increases if the

An increase in the time spent on job search

In the United States between the 1970s and the 2000s, the productivity of labor increased.This increase led to

The ________ describes the relationship between the amount of labor employed and real GDP.

Over the last decade, a country experiences a significant increase in labor productivity. a. Draw and label a labor market supply and demand diagram.Show how the equilibrium real wage rate and the equilibrium quantity of labor change as productivity increases. b. Draw and label a production function.Show how potential GDP changes as labor productivity increases.