Question 1

What does a productivity curve reflect?
 What leads to movements along a productivity curve and what leads to shifts in a productivity curve?

Accepted Answer

The productivity curve shows the relatio

Question 2

The standard of living is measured by

Accepted Answer

A) real GDP. 
B) employment. 
C) employment per person. 
D) real GDP per person. 
E) the population. 
A) real GDP. 
B) employment. 
C) employment per person. 
D) real GDP per person. 
E) the population.

Question 3

-The figure above shows the U.S. supply of labor curve. If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a

Accepted Answer

A) rightward shift of the supply of labor curve. 
B) leftward shift of the supply of labor curve. 
C) movement downward along the supply of labor curve from a point such as A to a point such as B. 
D) movement upward along the supply of labor curve from a point such as C to a point such as B. 
E) None of the above answers is correct because there is no change in the supply of labor curve. 
A) rightward shift of the supply of labor curve. 
B) leftward shift of the supply of labor curve. 
C) movement downward along the supply of labor curve from a point such as A to a point such as B. 
D) movement upward along the supply of labor curve from a point such as C to a point such as B. 
E) None of the above answers is correct because there is no change in the supply of labor curve.

Question 4

The Rule of 70 can be used to calculate the

Accepted Answer

A) economic growth rate per month. 
B) population growth rate per year. 
C) number of years it would take for the level of any variable to double. 
D) 70 percent level of the economic growth rate. 
E) economic growth rate per year. 
A) economic growth rate per month. 
B) population growth rate per year. 
C) number of years it would take for the level of any variable to double. 
D) 70 percent level of the economic growth rate. 
E) economic growth rate per year.

Question 5

The production function is a relationship between the amount of labor employed and

Accepted Answer

A) the maximum quantity of real GDP that can be produced. 
B) the maximum quantity of nominal GDP that can be produced. 
C) the wage rate paid to the workers. 
D) all other resources at different levels of employment. 
E) the amount of labor workers supply. 
A) the maximum quantity of real GDP that can be produced. 
B) the maximum quantity of nominal GDP that can be produced. 
C) the wage rate paid to the workers. 
D) all other resources at different levels of employment. 
E) the amount of labor workers supply.

Question 6

17.5 Chapter Figures
  
-The figure above shows the U.S. production function. How would an increase in capital be shown in the figure?

Accepted Answer

A) an upward shift or rotation of the production function 
B) a downward shift or rotation of the production function 
C) a movement from point A to point B 
D) a movement from point C to point B 
E) None of the above because the effects of an increase in capital cannot be shown in the figure. 
A) an upward shift or rotation of the production function 
B) a downward shift or rotation of the production function 
C) a movement from point A to point B 
D) a movement from point C to point B 
E) None of the above because the effects of an increase in capital cannot be shown in the figure.

Question 7

The production function shows that as employment increases, real GDP

Accepted Answer

A) increases at an increasing rate. 
B) increases at a decreasing rate. 
C) increases at a constant rate. 
D) decreases at a decreasing rate. 
E) increases until it reaches potential GDP and then it starts to decrease. 
A) increases at an increasing rate. 
B) increases at a decreasing rate. 
C) increases at a constant rate. 
D) decreases at a decreasing rate. 
E) increases until it reaches potential GDP and then it starts to decrease.

Question 8

A technological change ________ and a change in the capital stock ________.

Accepted Answer

A) shifts the productivity curve; shifts the productivity curve 
B) shifts the productivity curve; creates a movement along the productivity curve 
C) creates a movement along the productivity curve; shifts the productivity curve 
D) does not change the productivity curve; creates a movement along the productivity curve 
E) does not change the productivity curve; shifts the productivity curve 
A) shifts the productivity curve; shifts the productivity curve 
B) shifts the productivity curve; creates a movement along the productivity curve 
C) creates a movement along the productivity curve; shifts the productivity curve 
D) does not change the productivity curve; creates a movement along the productivity curve 
E) does not change the productivity curve; shifts the productivity curve

Question 9

Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year. The economic growth rate between these years has been

Accepted Answer

A) 10.31 percent. 
B) 4.65 percent. 
C) 5.67 percent. 
D) 7.67 percent. 
E) $0.4 trillion. 
A) 10.31 percent. 
B) 4.65 percent. 
C) 5.67 percent. 
D) 7.67 percent. 
E) $0.4 trillion.

Question 10

One possible way of achieving faster economic growth is to

Accepted Answer

A) encourage saving. 
B) protect the economy from international trade. 
C) limit investment because investment adds nothing to production today. 
D) eliminate property rights because they prevent people from using other people's ideas. 
E) tax saving so that people spend more and businesses make more profit. 
A) encourage saving. 
B) protect the economy from international trade. 
C) limit investment because investment adds nothing to production today. 
D) eliminate property rights because they prevent people from using other people's ideas. 
E) tax saving so that people spend more and businesses make more profit.

Question 11

The idea that the production function exhibits _______implies that ________.

Accepted Answer

A) diminishing returns; the Lucas Wedge increases at output increases. 
B) diminishing returns; each additional unit of labor employed generates an ever-decreasing amount of real GDP. 
C) increasing returns; potential GDP is always increasing. 
D) increasing returns; output should increase steadily as technology grows. 
E) constant returns; each additional unit of labor employed generates an increasing amount of real GDP. 
A) diminishing returns; the Lucas Wedge increases at output increases. 
B) diminishing returns; each additional unit of labor employed generates an ever-decreasing amount of real GDP. 
C) increasing returns; potential GDP is always increasing. 
D) increasing returns; output should increase steadily as technology grows. 
E) constant returns; each additional unit of labor employed generates an increasing amount of real GDP.

Question 12

The shape of the productivity curve reflects the

Accepted Answer

A) effects of capital accumulation. 
B) effects of technological progress. 
C) change in labor productivity as human capital increases. 
D) law of diminishing marginal returns. 
E) effects of population growth. 
A) effects of capital accumulation. 
B) effects of technological progress. 
C) change in labor productivity as human capital increases. 
D) law of diminishing marginal returns. 
E) effects of population growth.

Question 13

Which of the following are important for countries to promote with property rights and incentives if economic growth is to occur?
i. specialization
ii. saving and investment
iii. increases in human capital
iv. discovery of new technology

Accepted Answer

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

Question 14

As demonstrated by the labor supply schedule, the quantity of labor supplied depends on

Accepted Answer

A) the nominal wage. 
B) the amount of labor that firms want to hire. 
C) the real wage. 
D) the value of the dollar. 
E) workers' productivity. 
A) the nominal wage. 
B) the amount of labor that firms want to hire. 
C) the real wage. 
D) the value of the dollar. 
E) workers' productivity.

Question 15

Many economists argue that an incentive to save is

Accepted Answer

A) high income tax rates. 
B) a tax on consumption rather than on income. 
C) a tax on income rather than a tax on consumption. 
D) greater government regulation of the banking and securities industries. 
E) strengthening the property rights that savers have to the physical capital they purchase. 
A) high income tax rates. 
B) a tax on consumption rather than on income. 
C) a tax on income rather than a tax on consumption. 
D) greater government regulation of the banking and securities industries. 
E) strengthening the property rights that savers have to the physical capital they purchase.

Question 16

At its most basic level, economic growth depends on

Accepted Answer

A) creating the right incentives. 
B) saving by the government. 
C) government leadership. 
D) government's fixing prices to encourage stability. 
E) political freedom. 
A) creating the right incentives. 
B) saving by the government. 
C) government leadership. 
D) government's fixing prices to encourage stability. 
E) political freedom.

Question 17

The quantity of labor demanded definitely increases if the

Accepted Answer

A) real wage rate rises. 
B) real wage rate falls. 
C) nominal wage rate rises. 
D) nominal wage rate falls. 
E) supply of labor decreases. 
A) real wage rate rises. 
B) real wage rate falls. 
C) nominal wage rate rises. 
D) nominal wage rate falls. 
E) supply of labor decreases.

Question 18

Diminishing returns means that

Accepted Answer

A) each additional unit of labor produces successively less real GDP. 
B) hiring more labor results in less real GDP. 
C) each extra unit of real GDP produced requires less labor. 
D) each additional unit of labor produces successively more real GDP. 
E) hiring more labor must lower the real wage rate. 
A) each additional unit of labor produces successively less real GDP. 
B) hiring more labor results in less real GDP. 
C) each extra unit of real GDP produced requires less labor. 
D) each additional unit of labor produces successively more real GDP. 
E) hiring more labor must lower the real wage rate.

Question 19

A country reports that its actual real GDP is greater than its potential GDP. It must be that

Accepted Answer

A) an error was made when calculating actual real GDP. 
B) the price level is increasing. 
C) more workers decided to quit work in order to enjoy leisure time. 
D) the excess by which real GDP exceeds potential GDP is only temporary and eventually real GDP will decrease to be equal to potential GDP. 
E) None of the above answers is correct because it is impossible for a country's real GDP to exceed its potential GDP. 
A) an error was made when calculating actual real GDP. 
B) the price level is increasing. 
C) more workers decided to quit work in order to enjoy leisure time. 
D) the excess by which real GDP exceeds potential GDP is only temporary and eventually real GDP will decrease to be equal to potential GDP. 
E) None of the above answers is correct because it is impossible for a country's real GDP to exceed its potential GDP.

Question 20

Expansion of a nation's human capital can be achieved through

Accepted Answer

A) education and training. 
B) education and saving. 
C) education and technology improvements. 
D) education only. 
E) nothing because human capital is determined by the skills people are born with. 
A) education and training. 
B) education and saving. 
C) education and technology improvements. 
D) education only. 
E) nothing because human capital is determined by the skills people are born with.

What does a productivity curve reflect? What leads to movements along a productivity curve and what leads to shifts in a productivity curve?

The standard of living is measured by

-The figure above shows the U.S. supply of labor curve. If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a

The Rule of 70 can be used to calculate the

The production function is a relationship between the amount of labor employed and

17.5 Chapter Figures -The figure above shows the U.S. production function. How would an increase in capital be shown in the figure?

The production function shows that as employment increases, real GDP

A technological change and a change in the capital stock .

Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year. The economic growth rate between these years has been

One possible way of achieving faster economic growth is to

The idea that the production function exhibits _implies that __.

The shape of the productivity curve reflects the

Which of the following are important for countries to promote with property rights and incentives if economic growth is to occur? i. specialization ii. saving and investment iii. increases in human capital iv. discovery of new technology

As demonstrated by the labor supply schedule, the quantity of labor supplied depends on

Many economists argue that an incentive to save is

At its most basic level, economic growth depends on

The quantity of labor demanded definitely increases if the

Diminishing returns means that

A country reports that its actual real GDP is greater than its potential GDP. It must be that

Expansion of a nation's human capital can be achieved through

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

What does a productivity curve reflect? What leads to movements along a productivity curve and what leads to shifts in a productivity curve?

The standard of living is measured by

-The figure above shows the U.S. supply of labor curve. If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a

The Rule of 70 can be used to calculate the

The production function is a relationship between the amount of labor employed and

17.5 Chapter Figures -The figure above shows the U.S. production function. How would an increase in capital be shown in the figure?

The production function shows that as employment increases, real GDP

A technological change ________ and a change in the capital stock ________.

Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year. The economic growth rate between these years has been

One possible way of achieving faster economic growth is to

The idea that the production function exhibits _______implies that ________.

The shape of the productivity curve reflects the

Which of the following are important for countries to promote with property rights and incentives if economic growth is to occur? i. specialization ii. saving and investment iii. increases in human capital iv. discovery of new technology

As demonstrated by the labor supply schedule, the quantity of labor supplied depends on

Many economists argue that an incentive to save is

At its most basic level, economic growth depends on

The quantity of labor demanded definitely increases if the

Diminishing returns means that

A country reports that its actual real GDP is greater than its potential GDP. It must be that

Expansion of a nation's human capital can be achieved through

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

A technological change and a change in the capital stock .

The idea that the production function exhibits _implies that __.