Question 1

-The above figure that most accurately shows a production function is

Accepted Answer

A) Figure A. 
B) Figure B. 
C) Figure C. 
D) Figure D. 
E) Both Figure A and Figure B; Figure A for an economy with an excess of labor and Figure B for an economy with a shortage of labor. 
A) Figure A. 
B) Figure B. 
C) Figure C. 
D) Figure D. 
E) Both Figure A and Figure B; Figure A for an economy with an excess of labor and Figure B for an economy with a shortage of labor.

Question 2

Countries that enjoy economic growth

Accepted Answer

A) have property rights and markets which provide incentives for discovering new technologies. 
B) have economies that allow the government to make decisions in everyone's best interests. 
C) restrict international trade so that domestic industries can grow. 
D) place high taxes on saving and investment. 
E) place controls on property rights so that firms are protected from competition. 
A) have property rights and markets which provide incentives for discovering new technologies. 
B) have economies that allow the government to make decisions in everyone's best interests. 
C) restrict international trade so that domestic industries can grow. 
D) place high taxes on saving and investment. 
E) place controls on property rights so that firms are protected from competition.

Question 3

Which of the following would have the biggest payoff?

Accepted Answer

A) restoring real GDP growth to its 1960s growth rate 
B) eliminating the Okun Gap 
C) increasing the Okun Gap 
D) making the Okun Gap equal the Lucas Wedge 
E) increasing the Lucas Wedge 
A) restoring real GDP growth to its 1960s growth rate 
B) eliminating the Okun Gap 
C) increasing the Okun Gap 
D) making the Okun Gap equal the Lucas Wedge 
E) increasing the Lucas Wedge

Question 4

What is economic freedom and why is it important for economic growth?

Accepted Answer

Economic freedom is a condition when peo

Question 5

The quantity of labor demanded by a firm depends upon

Accepted Answer

A) the nominal wage rate not the real wage rate. 
B) the real wage rate not the nominal wage rate. 
C) both the real wage rate and the nominal wage rate. 
D) neither the real wage rate nor the nominal wage rate. 
E) either the real wage rate or the nominal wage rate, depending whether the price level is increasing or decreasing. 
A) the nominal wage rate not the real wage rate. 
B) the real wage rate not the nominal wage rate. 
C) both the real wage rate and the nominal wage rate. 
D) neither the real wage rate nor the nominal wage rate. 
E) either the real wage rate or the nominal wage rate, depending whether the price level is increasing or decreasing.

Question 6

Labor productivity increases if i. human capital decreases.
Ii. technology advances.
Iii. quality of education decreases.

Accepted Answer

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

Question 7

If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is 170 billion hours, labor productivity is

Accepted Answer

A) $2.63 an hour. 
B) $2.86 an hour. 
C) $35,000. 
D) $38.00 an hour. 
E) 920 hours. 
A) $2.63 an hour. 
B) $2.86 an hour. 
C) $35,000. 
D) $38.00 an hour. 
E) 920 hours.

Question 8

The presence of an incentive system that encourages growth

Accepted Answer

A) guarantees that growth will occur. 
B) creates the right conditions for growth to occur. 
C) cannot exist in poor countries. 
D) existed even in hunter-gatherer societies. 
E) means that the government must be a democracy. 
A) guarantees that growth will occur. 
B) creates the right conditions for growth to occur. 
C) cannot exist in poor countries. 
D) existed even in hunter-gatherer societies. 
E) means that the government must be a democracy.

Question 9

An important condition required for economic growth is

Accepted Answer

A) a democratic government. 
B) a totalitarian government. 
C) a libertarian government. 
D) economic freedom. 
E) the incentive to limit international trade so that all economic growth remains within the country. 
A) a democratic government. 
B) a totalitarian government. 
C) a libertarian government. 
D) economic freedom. 
E) the incentive to limit international trade so that all economic growth remains within the country.

Question 10

Discuss the production function. How does the production function relate to the labor market and potential GDP?

Accepted Answer

The production function shows the maximu

Question 11

Explain how the labor market and the production function determine potential GDP.

Accepted Answer

The labor market determines the equilibr

Question 12

China's growth rate has ________ that of most other countries, ________.

Accepted Answer

A) topped; but its real GDP per person is still lower than other industrialized countries 
B) lagged; and its real GDP is close to other Asian economies 
C) lagged; but its real GDP per person is higher than other Asian economies 
D) topped: but its real GDP per person declined in 2008-09. 
E) equaled; and its real GDP per person declined in 2008-09. 
A) topped; but its real GDP per person is still lower than other industrialized countries 
B) lagged; and its real GDP is close to other Asian economies 
C) lagged; but its real GDP per person is higher than other Asian economies 
D) topped: but its real GDP per person declined in 2008-09. 
E) equaled; and its real GDP per person declined in 2008-09.

Question 13

Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year. How many years will it take for real GDP and real GDP per person to double?

Accepted Answer

Use the Rule of 70 for both answers. The

Question 14

Why is economic growth so slow or non-existent in many third world countries?
 What policies would you propose to improve the situation?

Accepted Answer

Slow-growing third world countries gener

Question 15

Economic freedom requires

Accepted Answer

A) that there are no regulations and restrictions set on businesses and households by the government. 
B) the rule of law and the ability to enforce the laws. 
C) strong labor unions. 
D) freedom to bribe government officials. 
E) that the government be a democracy. 
A) that there are no regulations and restrictions set on businesses and households by the government. 
B) the rule of law and the ability to enforce the laws. 
C) strong labor unions. 
D) freedom to bribe government officials. 
E) that the government be a democracy.

Question 16

According to the law of diminishing returns, an additional unit of

Accepted Answer

A) capital produces more output than an additional unit of labor. 
B) labor decreases output. 
C) capital produces the same amount of output as an additional unit of labor. 
D) capital produces more output than the previous unit. 
E) capital produces less output than the previous unit. 
A) capital produces more output than an additional unit of labor. 
B) labor decreases output. 
C) capital produces the same amount of output as an additional unit of labor. 
D) capital produces more output than the previous unit. 
E) capital produces less output than the previous unit.

Question 17

The labor market is in equilibrium whenever

Accepted Answer

A) the nominal wage is decreasing. 
B) the nominal wage is increasing. 
C) the real wage is decreasing. 
D) the real wage is increasing. 
E) the quantity of labor demanded equals the quantity of labor supplied. 
A) the nominal wage is decreasing. 
B) the nominal wage is increasing. 
C) the real wage is decreasing. 
D) the real wage is increasing. 
E) the quantity of labor demanded equals the quantity of labor supplied.

Question 18

Sustained increases in the standard of living depend on

Accepted Answer

A) increases in the quantity of labor. 
B) increases in the population. 
C) increases in aggregate hours. 
D) increases in labor productivity. 
E) decreases in labor productivity. 
A) increases in the quantity of labor. 
B) increases in the population. 
C) increases in aggregate hours. 
D) increases in labor productivity. 
E) decreases in labor productivity.

Question 19

If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of

Accepted Answer

A) 4 percent. 
B) 2 percent. 
C) 0.5 percent. 
D) -3 percent. 
E) 8 percent. 
A) 4 percent. 
B) 2 percent. 
C) 0.5 percent. 
D) -3 percent. 
E) 8 percent.

Question 20

The idea of "diminishing returns" means that real GDP ________ as the quantity of labor increases.

Accepted Answer

A) increases at a slower rate 
B) decreases at a slower rate 
C) increases at a faster rate 
D) decreases at a faster rate 
E) does not change 
A) increases at a slower rate 
B) decreases at a slower rate 
C) increases at a faster rate 
D) decreases at a faster rate 
E) does not change

-The above figure that most accurately shows a production function is

Countries that enjoy economic growth

Which of the following would have the biggest payoff?

What is economic freedom and why is it important for economic growth?

The quantity of labor demanded by a firm depends upon

Labor productivity increases if i. human capital decreases. Ii. technology advances. Iii. quality of education decreases.

If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is 170 billion hours, labor productivity is

The presence of an incentive system that encourages growth

An important condition required for economic growth is

Discuss the production function. How does the production function relate to the labor market and potential GDP?

Explain how the labor market and the production function determine potential GDP.

China's growth rate has that of most other countries, .

Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year. How many years will it take for real GDP and real GDP per person to double?

Why is economic growth so slow or non-existent in many third world countries? What policies would you propose to improve the situation?

Economic freedom requires

According to the law of diminishing returns, an additional unit of

The labor market is in equilibrium whenever

Sustained increases in the standard of living depend on

If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of

The idea of "diminishing returns" means that real GDP ________ as the quantity of labor increases.

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

-The above figure that most accurately shows a production function is

Countries that enjoy economic growth

Which of the following would have the biggest payoff?

What is economic freedom and why is it important for economic growth?

The quantity of labor demanded by a firm depends upon

Labor productivity increases if i. human capital decreases. Ii. technology advances. Iii. quality of education decreases.

If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is 170 billion hours, labor productivity is

The presence of an incentive system that encourages growth

An important condition required for economic growth is

Discuss the production function. How does the production function relate to the labor market and potential GDP?

Explain how the labor market and the production function determine potential GDP.

China's growth rate has ________ that of most other countries, ________.

Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year. How many years will it take for real GDP and real GDP per person to double?

Why is economic growth so slow or non-existent in many third world countries? What policies would you propose to improve the situation?

Economic freedom requires

According to the law of diminishing returns, an additional unit of

The labor market is in equilibrium whenever

Sustained increases in the standard of living depend on

If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of

The idea of "diminishing returns" means that real GDP ________ as the quantity of labor increases.

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

China's growth rate has that of most other countries, .