Question 1

The productivity curve shifts upward when

Accepted Answer

A) physical capital increases. 
B) human capital decreases. 
C) hours of labor increase. 
D) hours of labor decrease. 
E) technology advances. 
A) physical capital increases. 
B) human capital decreases. 
C) hours of labor increase. 
D) hours of labor decrease. 
E) technology advances.

Question 2

Property rights

Accepted Answer

A) don't include intellectual property. 
B) don't include financial property. 
C) don't include physical property. 
D) include physical, financial, and intellectual property. 
E) slow the economic growth by placing limits on who can use what. 
A) don't include intellectual property. 
B) don't include financial property. 
C) don't include physical property. 
D) include physical, financial, and intellectual property. 
E) slow the economic growth by placing limits on who can use what.

Question 3

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

Accepted Answer

Labor productivity is defined

Question 4

The annual growth rate of an economy is 10 percent. The economy's GDP will double in about ________ years.

Accepted Answer

A) 7 
B) 10 
C) 12 
D) 14 
E) 20 
A) 7 
B) 10 
C) 12 
D) 14 
E) 20

Question 5

A reason a nation faces diminishing returns along a production function is because

Accepted Answer

A) unemployment always exists. 
B) potential GDP is fixed. 
C) the quantity of physical capital is fixed. 
D) full employment is not possible. 
E) the wage rate is fixed while moving along the production function. 
A) unemployment always exists. 
B) potential GDP is fixed. 
C) the quantity of physical capital is fixed. 
D) full employment is not possible. 
E) the wage rate is fixed while moving along the production function.

Question 6

A nation's annual growth rate of real GDP per person is 2 percent. Its standard of living will

Accepted Answer

A) double in 35 years. 
B) not change because its population is growing. 
C) fall because of its population growth. 
D) double in 10 years. 
E) double in 50 years. 
A) double in 35 years. 
B) not change because its population is growing. 
C) fall because of its population growth. 
D) double in 10 years. 
E) double in 50 years.

Question 7

Economic growth is defined as equal to the increase in

Accepted Answer

A) employment. 
B) population. 
C) real GDP. 
D) the price level. 
E) the inflation rate. 
A) employment. 
B) population. 
C) real GDP. 
D) the price level. 
E) the inflation rate.

Question 8

At full employment, actual ________ equals ________.

Accepted Answer

A) nominal GDP; potential GDP 
B) real GDP; potential GDP 
C) real GDP; nominal GDP 
D) potential GDP; nominal GDP 
E) unemployment; zero 
A) nominal GDP; potential GDP 
B) real GDP; potential GDP 
C) real GDP; nominal GDP 
D) potential GDP; nominal GDP 
E) unemployment; zero

Question 9

Real GDP can increase either because the quantity of labor increases or because labor productivity increases. What is the effect on the standard of living if real GDP increases because
a. the quantity of labor increases?
b. labor productivity increases?

Accepted Answer

a. An increase in real GDP because the q

Question 10

Choose which statement is most correct.

Accepted Answer

A) Real GDP can never exceed potential GDP. 
B) Real GDP must always equal potential GDP. 
C) At times, real GDP can exceed potential GDP. 
D) Nominal GDP can never exceed potential GDP. 
E) Nominal GDP must always equal potential GDP. 
A) Real GDP can never exceed potential GDP. 
B) Real GDP must always equal potential GDP. 
C) At times, real GDP can exceed potential GDP. 
D) Nominal GDP can never exceed potential GDP. 
E) Nominal GDP must always equal potential GDP.

Question 11

Suppose Mexico's real GDP per person in 2008 is $6,000 and the U.S. real GDP per person is $24,000. Mexico has annual growth in real GDP per person of 5 percent. Approximately how many years will it take Mexico to equal $24,000 of real GDP per person?

Accepted Answer

A) 14 years 
B) 18 years 
C) 28 years 
D) 36 years 
E) 40 years 
A) 14 years 
B) 18 years 
C) 28 years 
D) 36 years 
E) 40 years

Question 12

Economic freedom

Accepted Answer

A) is not important for nations to grow. 
B) must come from a democratic government. 
C) is founded, in part, on the rule of law. 
D) is created when the nation imposes many regulations on businesses. 
E) is harmed by having too many property rights. 
A) is not important for nations to grow. 
B) must come from a democratic government. 
C) is founded, in part, on the rule of law. 
D) is created when the nation imposes many regulations on businesses. 
E) is harmed by having too many property rights.

Question 13

The following government policies will help achieve faster economic growth EXCEPT

Accepted Answer

A) discouraging saving and encouraging spending. 
B) encouraging research and development. 
C) establishing and protecting property rights. 
D) improving the quality of education. 
E) increasing saving. 
A) discouraging saving and encouraging spending. 
B) encouraging research and development. 
C) establishing and protecting property rights. 
D) improving the quality of education. 
E) increasing saving.

Question 14

-Using the data in the table above, the growth rate of real GDP has

Accepted Answer

A) increased from year to year. 
B) increased more rapidly from year to year. 
C) remained constant from year to year. 
D) slowed from year to year. 
E) probably changed, but more information is needed about the price level to determine by how much it has changed. 
A) increased from year to year. 
B) increased more rapidly from year to year. 
C) remained constant from year to year. 
D) slowed from year to year. 
E) probably changed, but more information is needed about the price level to determine by how much it has changed.

Question 15

-Using the data in the table above, the growth rate of real GDP for 2008 is equal to

Accepted Answer

A) 9.09 percent. 
B) 7.00 percent. 
C) 5.00 percent. 
D) 4.76 percent. 
E) 10.0 percent. 
A) 9.09 percent. 
B) 7.00 percent. 
C) 5.00 percent. 
D) 4.76 percent. 
E) 10.0 percent.

Question 16

As additional units of labor hours are employed, holding all other factors constant, along the production function,

Accepted Answer

A) real GDP increases at an increasing rate. 
B) nominal GDP decreases at an increasing rate. 
C) real GDP increases at a decreasing rate. 
D) real GDP increase at a constant rate. 
E) real GDP initially decreases and then starts to increase. 
A) real GDP increases at an increasing rate. 
B) nominal GDP decreases at an increasing rate. 
C) real GDP increases at a decreasing rate. 
D) real GDP increase at a constant rate. 
E) real GDP initially decreases and then starts to increase.

Question 17

Economic growth is slow or absent in some economies because those lack

Accepted Answer

A) political freedom. 
B) economic freedom. 
C) democracy. 
D) cultural freedom. 
E) a strong government. 
A) political freedom. 
B) economic freedom. 
C) democracy. 
D) cultural freedom. 
E) a strong government.

Question 18

If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it take for Country A's real GDP to double?

Accepted Answer

A) 10 
B) 7 
C) 5 
D) 30 
E) 14 
A) 10 
B) 7 
C) 5 
D) 30 
E) 14

Question 19

The Bubby Gum factory produces bubble gum. Joanne is one of the employees, and she produces 10 packs of bubble gum per hour. Joanne's money wage rate is $12 per hour. If a packet of bubble gum sells for $1.00, then

Accepted Answer

A) Joanne is creating a $2.00 per hour loss for the firm. 
B) Joanne is creating a $2.00 per hour profit for the firm. 
C) the Bubby Gum company should decrease the price of the bubble gum so it sells more and makes a larger profit. 
D) the Bubby Gum company should pay Joanne more. 
E) the Bubby Gum company should increase its demand for labor. 
A) Joanne is creating a $2.00 per hour loss for the firm. 
B) Joanne is creating a $2.00 per hour profit for the firm. 
C) the Bubby Gum company should decrease the price of the bubble gum so it sells more and makes a larger profit. 
D) the Bubby Gum company should pay Joanne more. 
E) the Bubby Gum company should increase its demand for labor.

Question 20

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.

Accepted Answer

@#IMG-DLM& 
a. The figure above shows the effect o

The productivity curve shifts upward when

Property rights

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

The annual growth rate of an economy is 10 percent. The economy's GDP will double in about ________ years.

A reason a nation faces diminishing returns along a production function is because

A nation's annual growth rate of real GDP per person is 2 percent. Its standard of living will

Economic growth is defined as equal to the increase in

At full employment, actual equals .

Real GDP can increase either because the quantity of labor increases or because labor productivity increases. What is the effect on the standard of living if real GDP increases because a. the quantity of labor increases? b. labor productivity increases?

Choose which statement is most correct.

Suppose Mexico's real GDP per person in 2008 is $6,000 and the U.S. real GDP per person is $24,000. Mexico has annual growth in real GDP per person of 5 percent. Approximately how many years will it take Mexico to equal $24,000 of real GDP per person?

Economic freedom

The following government policies will help achieve faster economic growth EXCEPT

-Using the data in the table above, the growth rate of real GDP has

-Using the data in the table above, the growth rate of real GDP for 2008 is equal to

As additional units of labor hours are employed, holding all other factors constant, along the production function,

Economic growth is slow or absent in some economies because those lack

If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it take for Country A's real GDP to double?

The Bubby Gum factory produces bubble gum. Joanne is one of the employees, and she produces 10 packs of bubble gum per hour. Joanne's money wage rate is $12 per hour. If a packet of bubble gum sells for $1.00, then

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 productivity curve shifts upward when

Property rights

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

The annual growth rate of an economy is 10 percent. The economy's GDP will double in about ________ years.

A reason a nation faces diminishing returns along a production function is because

A nation's annual growth rate of real GDP per person is 2 percent. Its standard of living will

Economic growth is defined as equal to the increase in

At full employment, actual ________ equals ________.

Real GDP can increase either because the quantity of labor increases or because labor productivity increases. What is the effect on the standard of living if real GDP increases because a. the quantity of labor increases? b. labor productivity increases?

Choose which statement is most correct.

Suppose Mexico's real GDP per person in 2008 is $6,000 and the U.S. real GDP per person is $24,000. Mexico has annual growth in real GDP per person of 5 percent. Approximately how many years will it take Mexico to equal $24,000 of real GDP per person?

Economic freedom

The following government policies will help achieve faster economic growth EXCEPT

-Using the data in the table above, the growth rate of real GDP has

-Using the data in the table above, the growth rate of real GDP for 2008 is equal to

As additional units of labor hours are employed, holding all other factors constant, along the production function,

Economic growth is slow or absent in some economies because those lack

If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it take for Country A's real GDP to double?

The Bubby Gum factory produces bubble gum. Joanne is one of the employees, and she produces 10 packs of bubble gum per hour. Joanne's money wage rate is $12 per hour. If a packet of bubble gum sells for $1.00, then

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

At full employment, actual equals .