Question 1

Human capital is

Accepted Answer

A)  the saving done by human beings. 
B)  people's knowledge and skills. 
C)  a measure of the labor productivity of workers. 
D)  the investment people make in industries that make capital goods. 
A)  the saving done by human beings. 
B)  people's knowledge and skills. 
C)  a measure of the labor productivity of workers. 
D)  the investment people make in industries that make capital goods.

Question 2

Population increases are the limiting factor in the growth process in

Accepted Answer

A)  classical growth theory. 
B)  neoclassical growth theory. 
C)  the new growth theory. 
D)  real growth theory. 
A)  classical growth theory. 
B)  neoclassical growth theory. 
C)  the new growth theory. 
D)  real growth theory.

Question 3

If at the prevailing real wage rate,the quantity of labor supplied exceeds the quantity demanded,

Accepted Answer

A)  there is a shortage of labor. 
B)  the real wage rate will rise to restore equilibrium. 
C)  the real wage rate is greater than the equilibrium real wage rate. 
D)  None of the above answers is correct. 
A)  there is a shortage of labor. 
B)  the real wage rate will rise to restore equilibrium. 
C)  the real wage rate is greater than the equilibrium real wage rate. 
D)  None of the above answers is correct.

Question 4

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

Accepted Answer

A) True 
 B)False

Question 5

As labor increases,there is a

Accepted Answer

A)  shift of the aggregate production function, but no movement along it. 
B)  movement along the aggregate production function, but no shift in it. 
C)  movement along the aggregate production function and real GDP will increase less with each additional increase in labor. 
D)  movement along the aggregate production function and real GDP will decrease less with each additional increase in labor. 
A)  shift of the aggregate production function, but no movement along it. 
B)  movement along the aggregate production function, but no shift in it. 
C)  movement along the aggregate production function and real GDP will increase less with each additional increase in labor. 
D)  movement along the aggregate production function and real GDP will decrease less with each additional increase in labor.

Question 6

What is the main shortcoming of the neoclassical growth model and how does the new growth theory address this shortcoming?

Accepted Answer

One difficulty with the neoclassical mod

Question 7

A decrease in the real wage rate

Accepted Answer

A)  shifts the labor demand curve rightward. 
B)  shifts the labor demand curve leftward. 
C)  shifts the labor supply curve leftward. 
D)  none of the above because a change in the real wage rate does not shift either the labor demand or labor supply curve. 
A)  shifts the labor demand curve rightward. 
B)  shifts the labor demand curve leftward. 
C)  shifts the labor supply curve leftward. 
D)  none of the above because a change in the real wage rate does not shift either the labor demand or labor supply curve.

Question 8

The growth theory that predicts perpetual economic growth is

Accepted Answer

A)  classical growth theory. 
B)  neoclassical growth theory. 
C)  the new growth theory. 
D)  real growth theory. 
A)  classical growth theory. 
B)  neoclassical growth theory. 
C)  the new growth theory. 
D)  real growth theory.

Question 9

Equilibrium in the labor market

Accepted Answer

A)  cannot occur if the production function is shifting upward. 
B)  can happen only when actual GDP exceeds potential GDP. 
C)  means that resources are allocated inefficiently 
D)  occurs when actual GDP is equal to potential GDP 
A)  cannot occur if the production function is shifting upward. 
B)  can happen only when actual GDP exceeds potential GDP. 
C)  means that resources are allocated inefficiently 
D)  occurs when actual GDP is equal to potential GDP

Question 10

Because of the choices people make in the pursuit of profit,new growth theory argues that

Accepted Answer

A)  technology growth slows down in the long-run. 
B)  population growth increases will bring real GDP per person back to subsistence level. 
C)  the capital stock experiences diminishing returns. 
D)  the economy can enjoy persisting economic growth. 
A)  technology growth slows down in the long-run. 
B)  population growth increases will bring real GDP per person back to subsistence level. 
C)  the capital stock experiences diminishing returns. 
D)  the economy can enjoy persisting economic growth.

Question 11

Labor productivity equals

Accepted Answer

A)  real GDP divided by the capital stock. 
B)  real GDP divided by the working-age population. 
C)  total wages divided by real GDP. 
D)  real GDP divided by aggregate labor hours. 
A)  real GDP divided by the capital stock. 
B)  real GDP divided by the working-age population. 
C)  total wages divided by real GDP. 
D)  real GDP divided by aggregate labor hours.

Question 12

Technological change

Accepted Answer

A)  lowers the real wage rate. 
B)  decreases labor productivity. 
C)  has no effect on employment. 
D)  increases potential GDP. 
A)  lowers the real wage rate. 
B)  decreases labor productivity. 
C)  has no effect on employment. 
D)  increases potential GDP.

Question 13

Neoclassical growth theory predicts that China's economic growth rate will ________.

Accepted Answer

A)  decrease when the interest rate increases 
B)  continue at around 10 percent a year 
C)  always remain above the U.S. economic growth rate 
D)  eventually converge to the U.S. economic growth rate. 
A)  decrease when the interest rate increases 
B)  continue at around 10 percent a year 
C)  always remain above the U.S. economic growth rate 
D)  eventually converge to the U.S. economic growth rate.

Question 14

Explain the role played by technological change in classical growth theory,neoclassical growth theory,and new growth theory.

Accepted Answer

Technology plays a secondary role in cla

Question 15

Define the aggregate production function.Discuss why the aggregate production function exhibits diminishing returns.

Accepted Answer

The aggregate production function is the

Question 16

The United States had the largest real GDP per person until the 2012 when the China's real GDP per person overtook and then exceeded that in the United States.

Accepted Answer

A) True 
 B)False

Question 17

If the real wage rate is such that the quantity of labor supplied by workers is less than the quantity of labor demanded by firms,

Accepted Answer

A)  the economy is at full employment. 
B)  there is a shortage of labor. 
C)  the real wage rate will fall to restore equilibrium. 
D)  actual real GDP equals potential GDP because firms make the decision about how many workers to hire. 
A)  the economy is at full employment. 
B)  there is a shortage of labor. 
C)  the real wage rate will fall to restore equilibrium. 
D)  actual real GDP equals potential GDP because firms make the decision about how many workers to hire.

Question 18

The higher the real wage rate,the higher the labor force participation rate.

Accepted Answer

A) True 
 B)False

Question 19

According to the neoclassical growth theory,

Accepted Answer

A)  increases in labor productivity are only temporary. 
B)  technological change depends on people's choices. 
C)  forces other than GDP growth determine population growth. 
D)  higher saving rates generate permanently faster growth in GDP per person. 
A)  increases in labor productivity are only temporary. 
B)  technological change depends on people's choices. 
C)  forces other than GDP growth determine population growth. 
D)  higher saving rates generate permanently faster growth in GDP per person.

Question 20

Labor productivity rises

Accepted Answer

A)  if the amount of capital per worker increases. 
B)  in the absence of technological progress. 
C)  if firms invest in hiring more workers rather than buying more capital. 
D)  if the amount of capital per worker decreases. 
A)  if the amount of capital per worker increases. 
B)  in the absence of technological progress. 
C)  if firms invest in hiring more workers rather than buying more capital. 
D)  if the amount of capital per worker decreases.

Human capital is

Population increases are the limiting factor in the growth process in

If at the prevailing real wage rate,the quantity of labor supplied exceeds the quantity demanded,

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

As labor increases,there is a

What is the main shortcoming of the neoclassical growth model and how does the new growth theory address this shortcoming?

A decrease in the real wage rate

The growth theory that predicts perpetual economic growth is

Equilibrium in the labor market

Because of the choices people make in the pursuit of profit,new growth theory argues that

Labor productivity equals

Technological change

Neoclassical growth theory predicts that China's economic growth rate will ________.

Explain the role played by technological change in classical growth theory,neoclassical growth theory,and new growth theory.

Define the aggregate production function.Discuss why the aggregate production function exhibits diminishing returns.

The United States had the largest real GDP per person until the 2012 when the China's real GDP per person overtook and then exceeded that in the United States.

If the real wage rate is such that the quantity of labor supplied by workers is less than the quantity of labor demanded by firms,

The higher the real wage rate,the higher the labor force participation rate.

According to the neoclassical growth theory,

Labor productivity rises

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

Human capital is

Population increases are the limiting factor in the growth process in

If at the prevailing real wage rate,the quantity of labor supplied exceeds the quantity demanded,

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

As labor increases,there is a

What is the main shortcoming of the neoclassical growth model and how does the new growth theory address this shortcoming?

A decrease in the real wage rate

The growth theory that predicts perpetual economic growth is

Equilibrium in the labor market

Because of the choices people make in the pursuit of profit,new growth theory argues that

Labor productivity equals

Technological change

Neoclassical growth theory predicts that China's economic growth rate will ________.

Explain the role played by technological change in classical growth theory,neoclassical growth theory,and new growth theory.

Define the aggregate production function.Discuss why the aggregate production function exhibits diminishing returns.

The United States had the largest real GDP per person until the 2012 when the China's real GDP per person overtook and then exceeded that in the United States.

If the real wage rate is such that the quantity of labor supplied by workers is less than the quantity of labor demanded by firms,

The higher the real wage rate,the higher the labor force participation rate.

According to the neoclassical growth theory,

Labor productivity rises

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