Question 1

When all other influences on work plans remain the same, the

Accepted Answer

A) lower the real wage rate, the smaller the quantity of labor supplied. 
B) higher the real wage rate, the greater the quantity of labor demanded. 
C) lower the real wage rate, the greater the quantity of labor supplied. 
D) lower the real wage rate, the smaller the quantity of labor demanded. 
E) lower the real wage rate, the larger the labor force participation. 
A) lower the real wage rate, the smaller the quantity of labor supplied. 
B) higher the real wage rate, the greater the quantity of labor demanded. 
C) lower the real wage rate, the greater the quantity of labor supplied. 
D) lower the real wage rate, the smaller the quantity of labor demanded. 
E) lower the real wage rate, the larger the labor force participation.

Question 2

If real GDP in year 1 is $72 million and real GDP in year 2 is $87 million, then the growth rate of real GDP is

Accepted Answer

A) 15 percent. 
B) $15 million. 
C) 20.8 percent. 
D) 17 percent. 
E) 83 percent. 
A) 15 percent. 
B) $15 million. 
C) 20.8 percent. 
D) 17 percent. 
E) 83 percent.

Question 3

If a country experiences a real GDP growth rate of 6 percent, real GDP will double in

Accepted Answer

A) 10 years. 
B) 11.67 years. 
C) 14 years. 
D) 17.5 years. 
E) 16.67 years. 
A) 10 years. 
B) 11.67 years. 
C) 14 years. 
D) 17.5 years. 
E) 16.67 years.

Question 4

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

Accepted Answer

A) 63 years 
B) 77.7 years 
C) 70 years 
D) 109 years 
E) 100 years. 
A) 63 years 
B) 77.7 years 
C) 70 years 
D) 109 years 
E) 100 years.

Question 5

Labor productivity is defined as

Accepted Answer

A) total real GDP. 
B) real GDP per person. 
C) total output multiplied by total hours of labor. 
D) real GDP per hour of labor. 
E) hours of work per person. 
A) total real GDP. 
B) real GDP per person. 
C) total output multiplied by total hours of labor. 
D) real GDP per hour of labor. 
E) hours of work per person.

Question 6

The idea that potential GDP is the sustainable upper limit of production means that

Accepted Answer

A) real GDP may be temporarily larger than potential GDP, but not permanently. 
B) the economy is operating environmentally efficiently. 
C) real GDP may be temporarily less than potential GDP. 
D) inflation must always occur in a growing economy. 
E) unemployment can only temporarily be zero in a healthy economy. 
A) real GDP may be temporarily larger than potential GDP, but not permanently. 
B) the economy is operating environmentally efficiently. 
C) real GDP may be temporarily less than potential GDP. 
D) inflation must always occur in a growing economy. 
E) unemployment can only temporarily be zero in a healthy economy.

Question 7

What is the effect on real GDP per person if labor productivity increases?
 What is the effect on the nation's standard of living?

Accepted Answer

Real GDP equals (aggregate hours)× (labo

Question 8

One of the possible roles governments can play in sponsoring growth is to

Accepted Answer

A) provide tax incentives to encourage saving. 
B) own more of the nation's resources in order to put them to use. 
C) close the nation to trade in order to protect its domestic producers. 
D) make decisions for its citizens as to the most suitable job. 
E) limit the use of property rights in order to decrease the harm they create. 
A) provide tax incentives to encourage saving. 
B) own more of the nation's resources in order to put them to use. 
C) close the nation to trade in order to protect its domestic producers. 
D) make decisions for its citizens as to the most suitable job. 
E) limit the use of property rights in order to decrease the harm they create.

Question 9

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.

Accepted Answer

A) i and ii 
B) i only 
C) i, ii and iii 
D) ii and iii 
E) i and iii 
A) i and ii 
B) i only 
C) i, ii and iii 
D) ii and iii 
E) i and iii

Question 10

Economic freedom provides the

Accepted Answer

A) political system that encourages democracy. 
B) social system that supports families. 
C) production system that discourages property rights. 
D) incentive system that encourages growth-producing activities. 
E) necessary alternative to free markets. 
A) political system that encourages democracy. 
B) social system that supports families. 
C) production system that discourages property rights. 
D) incentive system that encourages growth-producing activities. 
E) necessary alternative to free markets.

Question 11

If capital per hour of labor decreases, real GDP per hour of labor

Accepted Answer

A) decreases because the level of technology decreases. 
B) increases because the level of technology increases. 
C) increases for a given level of technology. 
D) decreases for a given level of technology. 
E) changes only if technology also advances. 
A) decreases because the level of technology decreases. 
B) increases because the level of technology increases. 
C) increases for a given level of technology. 
D) decreases for a given level of technology. 
E) changes only if technology also advances.

Question 12

$$\begin{array} { l c c } 
\text { Year } & \begin{array} { c } 
\text { Real GDP } \
\text { (millions of 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Population } \
\text { (millions of people) }
\end{array} \
\hline \text { Year 1 } & 500 & 10 \
\text { Year 2 } & 550 & 11 \
\hline
\end{array}$$
-According to the data in the table above, real GDP grew at a rate of ________ between year 1 and year 2.

Accepted Answer

A) 10 percent 
B) 1 percent 
C) 50 percent 
D) 5 percent 
E) 55 percent 
A) 10 percent 
B) 1 percent 
C) 50 percent 
D) 5 percent 
E) 55 percent

Question 13

Hong Kong is an example of an economy that

Accepted Answer

A) does not experience economic growth because it is not a democracy. 
B) experiences economic growth in spite of the fact that is lacks democratic freedom. 
C) grows more slowly than other Asian countries because property rights are not valued. 
D) needs to promote investment so that economic growth can occur. 
E) lacks economic freedom and therefore experiences the slowest economic growth of all developed economies. 
A) does not experience economic growth because it is not a democracy. 
B) experiences economic growth in spite of the fact that is lacks democratic freedom. 
C) grows more slowly than other Asian countries because property rights are not valued. 
D) needs to promote investment so that economic growth can occur. 
E) lacks economic freedom and therefore experiences the slowest economic growth of all developed economies.

Question 14

A key reason why some nations show little or no growth is

Accepted Answer

A) overpopulation that overuses limited resources. 
B) lack of incentives to undertake actions toward growth. 
C) too much private property not directed by the government. 
D) patents in rich nations that keep technology only for the rich. 
E) too much international trade so that all economic growth spills over to foreigners. 
A) overpopulation that overuses limited resources. 
B) lack of incentives to undertake actions toward growth. 
C) too much private property not directed by the government. 
D) patents in rich nations that keep technology only for the rich. 
E) too much international trade so that all economic growth spills over to foreigners.

Question 15

A country's potential GDP is determined, in part, by

Accepted Answer

A) the equilibrium price level. 
B) demand and supply in the labor market. 
C) the Lucas Wedge. 
D) actual real GDP. 
E) the Okun Gap. 
A) the equilibrium price level. 
B) demand and supply in the labor market. 
C) the Lucas Wedge. 
D) actual real GDP. 
E) the Okun Gap.

Question 16

Real GDP in the country of Oz is growing at 5 percent and its population is growing at 2 percent. In the country of Lilliput, real GDP is growing at 4 percent and its population is growing at 0.5 percent. Thus,

Accepted Answer

A) real GDP per person in Oz is growing at a faster rate than in Lilliput. 
B) real GDP per person in Lilliput is growing at a faster rate than in Oz. 
C) real GDP per person in Lilliput is growing at the same rate as in Oz. 
D) real GDP per person in Lilliput is growing at a rate that is not comparable to that in Oz. 
E) we need more information to determine if real GDP per person in Lilliput is growing faster or slower than real GDP per person in Oz. 
A) real GDP per person in Oz is growing at a faster rate than in Lilliput. 
B) real GDP per person in Lilliput is growing at a faster rate than in Oz. 
C) real GDP per person in Lilliput is growing at the same rate as in Oz. 
D) real GDP per person in Lilliput is growing at a rate that is not comparable to that in Oz. 
E) we need more information to determine if real GDP per person in Lilliput is growing faster or slower than real GDP per person in Oz.

Question 17

The quantity of labor supplied increases as the real wage rises because

Accepted Answer

A) higher real wages mean that nominal wages have increased. 
B) the opportunity cost of working increases. 
C) the quantity of labor demanded increases. 
D) the opportunity cost of leisure rises. 
E) labor force participation decreases so that only serious workers are left in the labor force. 
A) higher real wages mean that nominal wages have increased. 
B) the opportunity cost of working increases. 
C) the quantity of labor demanded increases. 
D) the opportunity cost of leisure rises. 
E) labor force participation decreases so that only serious workers are left in the labor force.

Question 18

Firms hire more labor as long as

Accepted Answer

A) the real wage rate is less than the additional output the labor produces. 
B) the real wage rate is greater than the additional output the labor produces. 
C) extra labor will produce more output. 
D) the nominal wage rate exceeds the real wage rate. 
E) the nominal wage rate is less than the real wage rate. 
A) the real wage rate is less than the additional output the labor produces. 
B) the real wage rate is greater than the additional output the labor produces. 
C) extra labor will produce more output. 
D) the nominal wage rate exceeds the real wage rate. 
E) the nominal wage rate is less than the real wage rate.

Question 19

A country will likely experience an increase in poverty if

Accepted Answer

A) its population decreases over time. 
B) its real GDP growth rate decreases or slows over time. 
C) its inflation rate decreases or slows over time. 
D) its real GDP per person growth rate increases over time. 
E) it does not receive foreign aid. 
A) its population decreases over time. 
B) its real GDP growth rate decreases or slows over time. 
C) its inflation rate decreases or slows over time. 
D) its real GDP per person growth rate increases over time. 
E) it does not receive foreign aid.

Question 20

A condition necessary for a country to achieve economic growth is

Accepted Answer

A) high tax rates so the government can purchase a lot of capital equipment. 
B) strict environmental regulations. 
C) economic freedom. 
D) government control of the banking system. 
E) democracy. 
A) high tax rates so the government can purchase a lot of capital equipment. 
B) strict environmental regulations. 
C) economic freedom. 
D) government control of the banking system. 
E) democracy.

When all other influences on work plans remain the same, the

If real GDP in year 1 is $72 million and real GDP in year 2 is $87 million, then the growth rate of real GDP is

If a country experiences a real GDP growth rate of 6 percent, real GDP will double in

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

Labor productivity is defined as

The idea that potential GDP is the sustainable upper limit of production means that

What is the effect on real GDP per person if labor productivity increases? What is the effect on the nation's standard of living?

One of the possible roles governments can play in sponsoring growth is 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.

Economic freedom provides the

If capital per hour of labor decreases, real GDP per hour of labor

Year Real GDP (millions of 2005 dollars) Population (millions of people) Year 1 500 10 Year 2 550 11 -According to the data in the table above, real GDP grew at a rate of ________ between year 1 and year 2.

Hong Kong is an example of an economy that

A key reason why some nations show little or no growth is

A country's potential GDP is determined, in part, by

Real GDP in the country of Oz is growing at 5 percent and its population is growing at 2 percent. In the country of Lilliput, real GDP is growing at 4 percent and its population is growing at 0.5 percent. Thus,

The quantity of labor supplied increases as the real wage rises because

Firms hire more labor as long as

A country will likely experience an increase in poverty if

A condition necessary for a country to achieve economic growth is

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 17: Potential Gdp and Economic Growth

When all other influences on work plans remain the same, the

If real GDP in year 1 is $72 million and real GDP in year 2 is $87 million, then the growth rate of real GDP is

If a country experiences a real GDP growth rate of 6 percent, real GDP will double in

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

Labor productivity is defined as

The idea that potential GDP is the sustainable upper limit of production means that

What is the effect on real GDP per person if labor productivity increases? What is the effect on the nation's standard of living?

One of the possible roles governments can play in sponsoring growth is 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.

Economic freedom provides the

If capital per hour of labor decreases, real GDP per hour of labor

Year Real GDP (millions of 2005 dollars) Population (millions of people) Year 1 500 10 Year 2 550 11 -According to the data in the table above, real GDP grew at a rate of ________ between year 1 and year 2.

Hong Kong is an example of an economy that

A key reason why some nations show little or no growth is

A country's potential GDP is determined, in part, by

Real GDP in the country of Oz is growing at 5 percent and its population is growing at 2 percent. In the country of Lilliput, real GDP is growing at 4 percent and its population is growing at 0.5 percent. Thus,

The quantity of labor supplied increases as the real wage rises because

Firms hire more labor as long as

A country will likely experience an increase in poverty if

A condition necessary for a country to achieve economic growth is

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters