Exam 17: Potential Gdp and Economic Growth

Real wage rate (2005 dollars per hour) Quantity of labor demanded (billions of hours per year) Quantity of labor supplied (billions of hours per year) 40 200 320 35 220 310 30 240 300 25 260 290 20 280 280 15 300 270 -The table above shows the labor demand and labor supply schedules for a nation. The equilibrium real wage rate is ________ and the equilibrium quantity of labor is ________ billions of hours per year.

Suppose an economist stated that Brazil had achieved its potential GDP 2008. This would imply that at this level of real GDP, Brazil experienced

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

The Keynesian macroeconomic model states that

The lower the real wage rate, the

The Lucas Wedge is estimated to

One possible way of achieving faster economic growth is to

Potential GDP is

To determine GDP from the production function, we need to know

How do we calculate growth in a nation's standard of living?

Labor productivity equals

The population in the current year is 31.5 million and the real GDP is $814 million. The previous year's statistics were a population of 31 million and a real GDP of $800 million. The change in the standard of living, measured by growth in real GDP per person, is

Briefly define real and potential GDP, and explain the relationship between real GDP and potential GDP. How can we measure potential GDP?

If the level of technology rises, GDP per hour of labor

At any given time, which factor of production is NOT fixed?

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 per person grew at a rate of ________ between year 1 and year 2.

If Kenya institutes policies that support economic freedom and growth, it is likely that Kenya will

When all other influences on firms' hiring plans remain the same, the

Growth in physical capital depends most directly upon the

For a household, the opportunity cost of not working is the