Exam 17: Potential Gdp and Economic Growth

The tables above show a nation's labor demand and labor supply schedules and its production function. Given the equilibrium in the labor market, potential GDP is

Human capital is acquired

According the Keynesian macroeconomic model, which of the following was responsible for starting the Great Depression?

The growth rate of real GDP per person equals the

If capital per hour of labor increases, GDP per hour of labor

Over the past 100 years, real GDP per person in the United States has grown at an average rate of about ________ per year.

Potential GDP is the level of

Jose and Julia were discussing the necessary components to achieve economic growth. Jose stated that the economy must include free markets, specialization and trade, and an ethical judicial system. Julia reminded Jose that another key component is

This year, real GDP per person in Country A is eight times real GDP per person in Country B. If Country B's real GDP per person grows at a rate of 5 percent, about how many years will it take for Country B to reach the level of real GDP per person in Country A in this year?

Real wage rate (2005 dollars) Labor demand (billions of hours per year) Labor supply (billions of hours per year) 30 100 700 25 200 600 20 300 500 15 400 400 10 500 300 Employment (billions of hours per year) Real GDP (trillions of 2005 dollars) 200 3.0 300 4.0 400 4.8 500 5.4 600 5.8 -The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function. a. What is the equilibrium real wage rate and the level of employment? b. What is potential GDP?

In recent years, Taiwan has experienced increases in savings and investment. As a result of the higher investment and saving, we expect i) increases in physical capital. Ii) increases in the inflation rate. Iii) advances in technology.

In 2008, real GDP in the United States was $13,312 billion. In 2009, real GDP in the United States was $13,112 billion. What was the U.S. economic growth rate from 2008 to 2009?

Suppose that Australia has fully employed all of its resources. This situation means that Australia

The production function graphs the relationship between

Which of the following statement or statements are correct about potential GDP? I. Actual real GDP equals potential GDP when the economy is at full employment. Ii. Real GDP can be less than potential GDP. Iii. When real GDP equals potential GDP, it also equals nominal GDP.

Over the business cycle, real GDP fluctuates around

The gap in potential GDP in the United States versus Europe can be explained by the fact that

A basic precondition necessary to achieve economic growth is

The level of real GDP the economy produces at full employment is

In this year, Country A has a real GDP per person that is 4 times greater than that of Country B. Country B's growth rate of real GDP per person is 3.5 percent per year. How many years will it take for Country B's real GDP per person to reach the same level that Country A had in this year?