Question 1

Within neoclassical growth theory, technological change ________ saving and ________ investment.

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 2

According to the classical growth theory of Thomas Malthus

Accepted Answer

A)  labor productivity increases continuously. 
B)  the population growth rate is fixed. 
C)  technological advances lead to permanent increases in real GDP per person. 
D)  increases in real GDP per person are only temporary. 
A)  labor productivity increases continuously. 
B)  the population growth rate is fixed. 
C)  technological advances lead to permanent increases in real GDP per person. 
D)  increases in real GDP per person are only temporary.

Question 3

When labor productivity increases, the demand for labor curve ________ and the supply of labor curve ________.

Accepted Answer

A)  shifts rightward; shifts rightward 
B)  shifts rightward; does not shift 
C)  shifts leftward; shifts rightward 
D)  shift s leftward; does not shift 
A)  shifts rightward; shifts rightward 
B)  shifts rightward; does not shift 
C)  shifts leftward; shifts rightward 
D)  shift s leftward; does not shift

Question 4

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 5

If real GDP is $11,750 billion and aggregate hours are 175 billion, labor productivity equals

Accepted Answer

A)  $23.50 per hour. 
B)  $52 per hour. 
C)  $67 per hour. 
D)  $235 per hour. 
A)  $23.50 per hour. 
B)  $52 per hour. 
C)  $67 per hour. 
D)  $235 per hour.

Question 6

A problem with the neoclassical growth theory is its

Accepted Answer

A)  prediction that population growth lowers the real wage rate. 
B)  inability to explain persistent differences between countries' GDP growth rates. 
C)  prediction that population growth raises the real wage rate. 
D)  comparison of the economy to a perpetual motion machine. 
A)  prediction that population growth lowers the real wage rate. 
B)  inability to explain persistent differences between countries' GDP growth rates. 
C)  prediction that population growth raises the real wage rate. 
D)  comparison of the economy to a perpetual motion machine.

Question 7

An increase in physical capital or a technological advance

Accepted Answer

A)  raises the real wage rate. 
B)  decreases the quantity of labor employed. 
C)  shifts the production function downward. 
D)  decreases demand for labor. 
A)  raises the real wage rate. 
B)  decreases the quantity of labor employed. 
C)  shifts the production function downward. 
D)  decreases demand for labor.

Question 8

If the price level increases and workers' money wage rates remain constant,which of the following will occur?
I.The quantity of labor supplied will decrease.
II.The real wage rate will decrease.
III.The labor supply curve will shift rightward.

Accepted Answer

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

Question 9

-The table above shows the labor market for the country of Pickett. When the labor market is in equilibrium, the real wage rate is ________ and ________ of labor a year are employed.

Accepted Answer

A)  any value less than $25 an hour; any value greater than 40 billion hours 
B)  any value greater than $30 an hour; any value more than 40 billion hours 
C)  any value greater than or equal to $25 an hour; any value less than 40 billion hours 
D)  $30 an hour; 40 billion hours 
A)  any value less than $25 an hour; any value greater than 40 billion hours 
B)  any value greater than $30 an hour; any value more than 40 billion hours 
C)  any value greater than or equal to $25 an hour; any value less than 40 billion hours 
D)  $30 an hour; 40 billion hours

Question 10

A higher savings rate that leads to an increase in the capital stock

Accepted Answer

A)  leads to higher interest rates. 
B)  leads to increases in labor productivity. 
C)  immediately decreases investment. 
D)  is associated with a decrease in the rate of growth of the population. 
A)  leads to higher interest rates. 
B)  leads to increases in labor productivity. 
C)  immediately decreases investment. 
D)  is associated with a decrease in the rate of growth of the population.

Question 11

Which growth theory predicts perpetual growth?

Accepted Answer

A)  classical growth theory 
B)  neoclassical growth theory 
C)  new growth theory 
D)  None of the above answers is correct. 
A)  classical growth theory 
B)  neoclassical growth theory 
C)  new growth theory 
D)  None of the above answers is correct.

Question 12

Which of the following contributes to an increase in labor productivity?

Accepted Answer

A)  increased consumption expenditure 
B)  decreased investment 
C)  increased capital stock 
D)  All of the above contribute to an increase in labor productivity. 
A)  increased consumption expenditure 
B)  decreased investment 
C)  increased capital stock 
D)  All of the above contribute to an increase in labor productivity.

Question 13

If capital per hour of labor decreases, real GDP per hour of labor

Accepted Answer

A)  decreases because the level of technology decreases. 
B)  increases because the level of technology increases. 
C)  increases for a given level of technology. 
D)  decreases for a given level of technology. 
A)  decreases because the level of technology decreases. 
B)  increases because the level of technology increases. 
C)  increases for a given level of technology. 
D)  decreases for a given level of technology.

Question 14

-The people of Palm Island are willing to work 80 hours a day for a real wage rate of $4 an hour. Then each dollar increase in the real wage, they are willing to work 10 additional hours a day. Palm Island's production possibilities are in the table above.
a)Draw Palm Island's demand for labor curve.
b)Draw Palm Island's supply of labor curve.
c)What are the full-employment equilibrium real wage rate and quantity of labor in Palm Island's economy?
d)What is Palm Island's potential GDP?

Accepted Answer

@#IMG-DLM& 
a)See the figure above. Palm Island's

Question 15

Which of the following is TRUE regarding the labor market?
I.The labor supply curve slopes upward because firms maximize profits as they hire more workers.
II.If the real wage rate falls, the quantity of labor firms demand increases.
III.The demand for labor curve slopes downward because as the real wage rate falls, workers demand to work fewer hours.

Accepted Answer

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

Question 16

Cuba spends the highest percentage of GDP (18.7 percent)on education while the United States is the 38th highest spender with 5.7 percent of GDP. If spending on education is important for economic growth, which of the following statements explain why Cuba's economic growth rate is lower than the U.S. economic growth rate?
(data from United Nations Human Development Programme)

Accepted Answer

A)  Cuba trades with many more countries than does the United States. 
B)  Cuba doesn't offer property rights that promote innovation. 
C)  Cuba's population is smaller than the U.S. population. 
D)  all of the above explain why Cuba's economic growth rate is lower than the U.S. economic growth rate. 
A)  Cuba trades with many more countries than does the United States. 
B)  Cuba doesn't offer property rights that promote innovation. 
C)  Cuba's population is smaller than the U.S. population. 
D)  all of the above explain why Cuba's economic growth rate is lower than the U.S. economic growth rate.

Question 17

-In the illustration above, which figure shows an aggregate production function?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 18

The table below shows data for China.
 
The economic growth rate in China between 2000 and 2003 was ________ percent.

Accepted Answer

A)  30 
B)  37 
C)  1.97 
D)  98 
A)  30 
B)  37 
C)  1.97 
D)  98

Question 19

In the labor market, an increase in labor productivity ________ the real wage rate and ________ the level of employment.

Accepted Answer

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

Question 20

Of the following Asian countries, which has the lowest level of real GDP per person?

Accepted Answer

A)  China 
B)  Korea 
C)  Singapore 
D)  Hong Kong 
A)  China 
B)  Korea 
C)  Singapore 
D)  Hong Kong

Within neoclassical growth theory, technological change saving and investment.

According to the classical growth theory of Thomas Malthus

When labor productivity increases, the demand for labor curve and the supply of labor curve .

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.

If real GDP is $11,750 billion and aggregate hours are 175 billion, labor productivity equals

A problem with the neoclassical growth theory is its

An increase in physical capital or a technological advance

If the price level increases and workers' money wage rates remain constant,which of the following will occur? I.The quantity of labor supplied will decrease. II.The real wage rate will decrease. III.The labor supply curve will shift rightward.

-The table above shows the labor market for the country of Pickett. When the labor market is in equilibrium, the real wage rate is and of labor a year are employed.

A higher savings rate that leads to an increase in the capital stock

Which growth theory predicts perpetual growth?

Which of the following contributes to an increase in labor productivity?

If capital per hour of labor decreases, real GDP per hour of labor

-In the illustration above, which figure shows an aggregate production function?

The table below shows data for China. The economic growth rate in China between 2000 and 2003 was ________ percent.

In the labor market, an increase in labor productivity the real wage rate and the level of employment.

Of the following Asian countries, which has the lowest level of real GDP per person?

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

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 6: Economic Growth

Within neoclassical growth theory, technological change ________ saving and ________ investment.

According to the classical growth theory of Thomas Malthus

When labor productivity increases, the demand for labor curve ________ and the supply of labor curve ________.

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.

If real GDP is $11,750 billion and aggregate hours are 175 billion, labor productivity equals

A problem with the neoclassical growth theory is its

An increase in physical capital or a technological advance

If the price level increases and workers' money wage rates remain constant,which of the following will occur? I.The quantity of labor supplied will decrease. II.The real wage rate will decrease. III.The labor supply curve will shift rightward.

-The table above shows the labor market for the country of Pickett. When the labor market is in equilibrium, the real wage rate is ________ and ________ of labor a year are employed.

A higher savings rate that leads to an increase in the capital stock

Which growth theory predicts perpetual growth?

Which of the following contributes to an increase in labor productivity?

If capital per hour of labor decreases, real GDP per hour of labor

-In the illustration above, which figure shows an aggregate production function?

The table below shows data for China. The economic growth rate in China between 2000 and 2003 was ________ percent.

In the labor market, an increase in labor productivity ________ the real wage rate and ________ the level of employment.

Of the following Asian countries, which has the lowest level of real GDP per person?

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

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Within neoclassical growth theory, technological change saving and investment.

When labor productivity increases, the demand for labor curve and the supply of labor curve .

-The table above shows the labor market for the country of Pickett. When the labor market is in equilibrium, the real wage rate is and of labor a year are employed.

In the labor market, an increase in labor productivity the real wage rate and the level of employment.