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

The neoclassical growth theory concluded that economic growth is temporary because of a population explosion that occurs as a result of economic growth.

Accepted Answer

A) True 
 B)False

Question 3

The supply of labor curve is

Accepted Answer

A)  vertical at potential GDP. 
B)  upward sloping. 
C)  downward sloping. 
D)  horizontal at the equilibrium wage rate. 
A)  vertical at potential GDP. 
B)  upward sloping. 
C)  downward sloping. 
D)  horizontal at the equilibrium wage rate.

Question 4

The historical record for the United States over the last 100 years shows

Accepted Answer

A)  mostly positive economic growth, though the Great Depression caused actual GDP to dip well below potential GDP. 
B)  economic growth for about half the years and economic decline for the other half. 
C)  growth until 1970 and then a period of constant per person real GDP. 
D)  continuous economic growth for each year, although at different rates, throughout the entire century. 
A)  mostly positive economic growth, though the Great Depression caused actual GDP to dip well below potential GDP. 
B)  economic growth for about half the years and economic decline for the other half. 
C)  growth until 1970 and then a period of constant per person real GDP. 
D)  continuous economic growth for each year, although at different rates, throughout the entire century.

Question 5

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

Accepted Answer

The aggregate production function is the

Question 6

-The tables above show the labor market and the production function schedule for the country of Pickett. An increase in population changes the labor supply by 20 billion hours at each real wage rate. Potential GDP ________.

Accepted Answer

A)  does not change 
B)  decreases to $3 trillion 
C)  increases to $50 trillion 
D)  increases to $18 trillion 
A)  does not change 
B)  decreases to $3 trillion 
C)  increases to $50 trillion 
D)  increases to $18 trillion

Question 7

The gap between real GDP per person in the United States and South America has been narrowing since 1980.

Accepted Answer

A) True 
 B)False

Question 8

Potential GDP per labor hour can increase due to

Accepted Answer

A)  increases in labor productivity. 
B)  increases in the quantity of money. 
C)  increases in population. 
D)  decreases in the quantity of capital. 
A)  increases in labor productivity. 
B)  increases in the quantity of money. 
C)  increases in population. 
D)  decreases in the quantity of capital.

Question 9

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

Accepted Answer

Labor productivity is (real GD

Question 10

-As a result of the rightward shift in the demand curve for labor from LD? to LD?, the equilibrium level of employment ________ 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 11

Labor productivity increases with

Accepted Answer

A)  increases in consumption expenditure. 
B)  increases in depreciation. 
C)  increases in capital. 
D)  All of the above answers are correct. 
A)  increases in consumption expenditure. 
B)  increases in depreciation. 
C)  increases in capital. 
D)  All of the above answers are correct.

Question 12

In 2011, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. From 2011 to 2012, Armenia's standard of living ________.

Accepted Answer

A)  increased 
B)  decreased 
C)  did not change 
D)  might have increased, decreased, or remained unchanged but more information is needed to determine which 
A)  increased 
B)  decreased 
C)  did not change 
D)  might have increased, decreased, or remained unchanged but more information is needed to determine which

Question 13

The aggregate production function

Accepted Answer

A)  measures the productivity of labor as leisure decreases. 
B)  increases only with increases in productivity. 
C)  shows that real GDP can increase because of increased productivity as well as increased labor hours. 
D)  cannot show the impacts of productivity improvements. 
A)  measures the productivity of labor as leisure decreases. 
B)  increases only with increases in productivity. 
C)  shows that real GDP can increase because of increased productivity as well as increased labor hours. 
D)  cannot show the impacts of productivity improvements.

Question 14

A factor that turned out to be a weakness of the classical theory of growth is its

Accepted Answer

A)  emphasis on saving and investment. 
B)  assumption that the growth rate of the population increases when income increases. 
C)  reliance on constant growth in technology. 
D)  neglect of the subsistence real wage. 
A)  emphasis on saving and investment. 
B)  assumption that the growth rate of the population increases when income increases. 
C)  reliance on constant growth in technology. 
D)  neglect of the subsistence real wage.

Question 15

Classical growth theory asserts that

Accepted Answer

A)  growth in real GDP per person is temporary. 
B)  only some countries can have economic growth. 
C)  real GDP growth will eventually be a constant 3 percent per year. 
D)  nominal GDP growth is most important. 
A)  growth in real GDP per person is temporary. 
B)  only some countries can have economic growth. 
C)  real GDP growth will eventually be a constant 3 percent per year. 
D)  nominal GDP growth is most important.

Question 16

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 17

Economic growth is measured by

Accepted Answer

A)  changes in real GDP. 
B)  changes in nominal GDP. 
C)  changes in the employment rate. 
D)  All of the above are used to measure economic growth. 
A)  changes in real GDP. 
B)  changes in nominal GDP. 
C)  changes in the employment rate. 
D)  All of the above are used to measure economic growth.

Question 18

Suppose a country is producing $20 million of real GDP. If the economy grows at 10 percent per year, approximately how many years will to take for real GDP to grow to $80 million?

Accepted Answer

A)  14 
B)  7 
C)  4 
D)  30 
A)  14 
B)  7 
C)  4 
D)  30

Question 19

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 20

-The tables above show the labor market and the production function schedule for the country of Pickett. Potential GDP is ________.

Accepted Answer

A)  $40 trillion 
B)  $9 trillion 
C)  $14 trillion 
D)  $25 trillion 
A)  $40 trillion 
B)  $9 trillion 
C)  $14 trillion 
D)  $25 trillion

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

The neoclassical growth theory concluded that economic growth is temporary because of a population explosion that occurs as a result of economic growth.

The supply of labor curve is

The historical record for the United States over the last 100 years shows

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

-The tables above show the labor market and the production function schedule for the country of Pickett. An increase in population changes the labor supply by 20 billion hours at each real wage rate. Potential GDP ________.

The gap between real GDP per person in the United States and South America has been narrowing since 1980.

Potential GDP per labor hour can increase due to

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

-As a result of the rightward shift in the demand curve for labor from LD? to LD?, the equilibrium level of employment and potential GDP .

Labor productivity increases with

In 2011, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. From 2011 to 2012, Armenia's standard of living ________.

The aggregate production function

A factor that turned out to be a weakness of the classical theory of growth is its

Classical growth theory asserts that

The real wage rate measures the

Economic growth is measured by

Suppose a country is producing $20 million of real GDP. If the economy grows at 10 percent per year, approximately how many years will to take for real GDP to grow to $80 million?

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 tables above show the labor market and the production function schedule for the country of Pickett. Potential GDP is ________.

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

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

The neoclassical growth theory concluded that economic growth is temporary because of a population explosion that occurs as a result of economic growth.

The supply of labor curve is

The historical record for the United States over the last 100 years shows

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

-The tables above show the labor market and the production function schedule for the country of Pickett. An increase in population changes the labor supply by 20 billion hours at each real wage rate. Potential GDP ________.

The gap between real GDP per person in the United States and South America has been narrowing since 1980.

Potential GDP per labor hour can increase due to

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

-As a result of the rightward shift in the demand curve for labor from LD? to LD?, the equilibrium level of employment ________ and potential GDP ________.

Labor productivity increases with

In 2011, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. From 2011 to 2012, Armenia's standard of living ________.

The aggregate production function

A factor that turned out to be a weakness of the classical theory of growth is its

Classical growth theory asserts that

The real wage rate measures the

Economic growth is measured by

Suppose a country is producing $20 million of real GDP. If the economy grows at 10 percent per year, approximately how many years will to take for real GDP to grow to $80 million?

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 tables above show the labor market and the production function schedule for the country of Pickett. Potential GDP is ________.

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

-As a result of the rightward shift in the demand curve for labor from LD? to LD?, the equilibrium level of employment and potential GDP .

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.