Question 1

If the price level rises by 3 percent and workers' money wages increase by 3 percent,then the

Accepted Answer

A)  quantity of labor demand will decrease. 
B)  quantity of labor demand will increase. 
C)  quantity of labor demanded does not change because there is no change in the real wage rate. 
D)  Any of the above could occur depending on the magnitude on the dollar increase in the price level versus the dollar increase in the wage rate. 
A)  quantity of labor demand will decrease. 
B)  quantity of labor demand will increase. 
C)  quantity of labor demanded does not change because there is no change in the real wage rate. 
D)  Any of the above could occur depending on the magnitude on the dollar increase in the price level versus the dollar increase in the wage rate.

Question 2

New growth theory holds that choices,and the discoveries that result from them,result in growth that is temporary in nature.

Accepted Answer

A) True 
 B)False

Question 3

Because the United States is a developed economy,every other country is catching up to the level of U.S.real GDP per person.

Accepted Answer

A) True 
 B)False

Question 4

The relationship between the labor employed by a firm and the real wage rate is shown by the

Accepted Answer

A)  supply of labor curve. 
B)  supply of jobs curve. 
C)  demand for jobs curve. 
D)  demand for labor curve. 
A)  supply of labor curve. 
B)  supply of jobs curve. 
C)  demand for jobs curve. 
D)  demand for labor curve.

Question 5

The real wage rate equals

Accepted Answer

A)  (money wage rate)/(price level). 
B)  (price level)/(money wage rate). 
C)  (money wage rate) × (price level). 
D)  (money wage) + (number of hours worked)/(price level). 
A)  (money wage rate)/(price level). 
B)  (price level)/(money wage rate). 
C)  (money wage rate) × (price level). 
D)  (money wage) + (number of hours worked)/(price level).

Question 6

What are the sources of human capital?

Accepted Answer

Human capital,the accumulated skills and

Question 7

If workers' money wage rates increase by 5 percent and the price level remains constant,workers'

Accepted Answer

A)  quantity of labor supplied will decrease. 
B)  quantity of labor supplied will increase. 
C)  quantity of labor supplied will not change. 
D)  demand for jobs will decrease. 
A)  quantity of labor supplied will decrease. 
B)  quantity of labor supplied will increase. 
C)  quantity of labor supplied will not change. 
D)  demand for jobs will decrease.

Question 8

The growth rate of real GDP per person in the United States has

Accepted Answer

A)  averaged approximately 2 percent per year over the past century. 
B)  has consistently been 2 percent per decade over the past century. 
C)  has been the highest in the world over the past 5 decades. 
D)  has increased every year over the past century. 
A)  averaged approximately 2 percent per year over the past century. 
B)  has consistently been 2 percent per decade over the past century. 
C)  has been the highest in the world over the past 5 decades. 
D)  has increased every year over the past century.

Question 9

If real GDP is $13,500 billion and aggregate hours are 110 billion,labor productivity equals

Accepted Answer

A)  $6.75 per hour. 
B)  $104 per hour. 
C)  $123 per hour. 
D)  $675 per hour. 
A)  $6.75 per hour. 
B)  $104 per hour. 
C)  $123 per hour. 
D)  $675 per hour.

Question 10

What happens to the real wage rate and potential GDP if population increases?

Accepted Answer

An increase in population increases the

Question 11

A recent article states that "...gains from two centuries of rapid technological innovation are largely exhausted, and new discoveries lack the same revolutionary quality....{Further}, 80 percent of the growth between 1950 and 1993 came from the new application of old ideas, and these old ideas are now mostly wrung dry."
(The Economist, 03/03/2011)
-If this quote is true,what would the neoclassical growth theory predict?

Accepted Answer

A)  Economic growth stops because most technological advances have already been made. 
B)  Economic growth is temporary regardless of technological change and GDP per person returns to subsistence levels. 
C)  Economic growth will persist indefinitely because technological change will accelerate again as firms seek profits. 
D)  Economic growth will accelerate because these technological changes are permanent. 
A)  Economic growth stops because most technological advances have already been made. 
B)  Economic growth is temporary regardless of technological change and GDP per person returns to subsistence levels. 
C)  Economic growth will persist indefinitely because technological change will accelerate again as firms seek profits. 
D)  Economic growth will accelerate because these technological changes are permanent.

Question 12

Which of the following is associated with classical growth theory?
I. Growth in real GDP can continue indefinitely.
II. Technological growth increases as the population grows.
III. Population explosions bring real GDP per person back to subsistence levels.

Accepted Answer

A)  I 
B)  II 
C)  III 
D)  I and III 
A)  I 
B)  II 
C)  III 
D)  I and III

Question 13

Economic growth tends to be higher in a country that

Accepted Answer

A)  has a low savings rate. 
B)  has an economy open to international trade. 
C)  has an undeveloped system of property rights. 
D)  does not grant patents to inventors. 
A)  has a low savings rate. 
B)  has an economy open to international trade. 
C)  has an undeveloped system of property rights. 
D)  does not grant patents to inventors.

Question 14

In the neoclassical theory of growth,growth in ________ is the result of luck.

Accepted Answer

A)  saving 
B)  income 
C)  technology 
D)  the real interest rate 
A)  saving 
B)  income 
C)  technology 
D)  the real interest rate

Question 15

Of the three economic growth theories,which is the most optimistic about the chances of real GDP per person growing indefinitely?
Which is the most pessimistic?
What accounts for the differences?

Accepted Answer

The most optimistic is the new growth th

Question 16

The U.S.employment-to-population ratio peaked in 2000 and in 2012 fell to 58 percent,a level not seen since the early 1980s. This fall in the employment-to-population ratio ________ the equilibrium quantity of labor and ________ potential GDP.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 17

The real wage rate measures the

Accepted Answer

A)  quantity of goods and services that an hour of work will buy. 
B)  average weekly earnings in dollars of a worker. 
C)  dollar value of an hour of work. 
D)  dollar value of what a worker could earn in another job. 
A)  quantity of goods and services that an hour of work will buy. 
B)  average weekly earnings in dollars of a worker. 
C)  dollar value of an hour of work. 
D)  dollar value of what a worker could earn in another job.

Question 18

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth.Based on your understanding of growth theory and growth accounting,what would you suggest?

Accepted Answer

According to both neoclassical and new g

Question 19

If a rich country grows at a faster rate than a poor one,then

Accepted Answer

A)  the gap in their standard of living will widen over time. 
B)  the gap in their standard of living will close over time. 
C)  the difference in their living standards will not change over time. 
D)  whether or not the living standards gap widens or closes over time depends on the absolute size of the relative growth rates. 
A)  the gap in their standard of living will widen over time. 
B)  the gap in their standard of living will close over time. 
C)  the difference in their living standards will not change over time. 
D)  whether or not the living standards gap widens or closes over time depends on the absolute size of the relative growth rates.

Question 20

In general,a higher real wage rate decreases the quantity of labor supplied because fewer people enter the labor force.

Accepted Answer

A) True 
 B)False

If the price level rises by 3 percent and workers' money wages increase by 3 percent,then the

New growth theory holds that choices,and the discoveries that result from them,result in growth that is temporary in nature.

Because the United States is a developed economy,every other country is catching up to the level of U.S.real GDP per person.

The relationship between the labor employed by a firm and the real wage rate is shown by the

The real wage rate equals

What are the sources of human capital?

If workers' money wage rates increase by 5 percent and the price level remains constant,workers'

The growth rate of real GDP per person in the United States has

If real GDP is $13,500 billion and aggregate hours are 110 billion,labor productivity equals

What happens to the real wage rate and potential GDP if population increases?

Which of the following is associated with classical growth theory? I. Growth in real GDP can continue indefinitely. II. Technological growth increases as the population grows. III. Population explosions bring real GDP per person back to subsistence levels.

Economic growth tends to be higher in a country that

In the neoclassical theory of growth,growth in ________ is the result of luck.

Of the three economic growth theories,which is the most optimistic about the chances of real GDP per person growing indefinitely? Which is the most pessimistic? What accounts for the differences?

The U.S.employment-to-population ratio peaked in 2000 and in 2012 fell to 58 percent,a level not seen since the early 1980s. This fall in the employment-to-population ratio the equilibrium quantity of labor and potential GDP.

The real wage rate measures the

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth.Based on your understanding of growth theory and growth accounting,what would you suggest?

If a rich country grows at a faster rate than a poor one,then

In general,a higher real wage rate decreases the quantity of labor supplied because fewer people enter the labor force.

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 6: Economic Growth

If the price level rises by 3 percent and workers' money wages increase by 3 percent,then the

New growth theory holds that choices,and the discoveries that result from them,result in growth that is temporary in nature.

Because the United States is a developed economy,every other country is catching up to the level of U.S.real GDP per person.

The relationship between the labor employed by a firm and the real wage rate is shown by the

The real wage rate equals

What are the sources of human capital?

If workers' money wage rates increase by 5 percent and the price level remains constant,workers'

The growth rate of real GDP per person in the United States has

If real GDP is $13,500 billion and aggregate hours are 110 billion,labor productivity equals

What happens to the real wage rate and potential GDP if population increases?

Which of the following is associated with classical growth theory? I. Growth in real GDP can continue indefinitely. II. Technological growth increases as the population grows. III. Population explosions bring real GDP per person back to subsistence levels.

Economic growth tends to be higher in a country that

In the neoclassical theory of growth,growth in ________ is the result of luck.

Of the three economic growth theories,which is the most optimistic about the chances of real GDP per person growing indefinitely? Which is the most pessimistic? What accounts for the differences?

The U.S.employment-to-population ratio peaked in 2000 and in 2012 fell to 58 percent,a level not seen since the early 1980s. This fall in the employment-to-population ratio ________ the equilibrium quantity of labor and ________ potential GDP.

The real wage rate measures the

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth.Based on your understanding of growth theory and growth accounting,what would you suggest?

If a rich country grows at a faster rate than a poor one,then

In general,a higher real wage rate decreases the quantity of labor supplied because fewer people enter the labor force.

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

The U.S.employment-to-population ratio peaked in 2000 and in 2012 fell to 58 percent,a level not seen since the early 1980s. This fall in the employment-to-population ratio the equilibrium quantity of labor and potential GDP.