Question 1

Over the last 100 years, real GDP per person in the United States has grown at an average rate of approximately 2 percent per year.

Accepted Answer

A) True 
 B)False

Question 2

"Why India Cannot Sustain High Economic Growth", by Kunal KumarKundu
In his article about India's prospects for growth, the author notes that "Per capita availability of food grain is falling as population is growing faster than food grain production. Deplorable rural infrastructure leads to India wasting an amount of food grain... . India's agriculture is still so very highly monsoon dependent..."
Www)rediff.com 5/29/2008
If the author is suggesting that India's growth prospects are explained by the classical growth theory, we also expect that

Accepted Answer

A)  real GDP per worker will increase. 
B)  the subsistence wage will increase. 
C)  the economy will perpetually grow. 
D)  labor productivity, which has risen in recent years, will eventually decline. 
A)  real GDP per worker will increase. 
B)  the subsistence wage will increase. 
C)  the economy will perpetually grow. 
D)  labor productivity, which has risen in recent years, will eventually decline.

Question 3

"Why India Cannot Sustain High Economic Growth", by Kunal KumarKundu
In his article about India's prospects for growth, the author notes that "Per capita availability of food grain is falling as population is growing faster than food grain production. Deplorable rural infrastructure leads to India wasting an amount of food grain... . India's agriculture is still so very highly monsoon dependent..."
Www)rediff.com 5/29/2008
This view of India's economic growth is best reflected in the ________.

Accepted Answer

A)  classical growth theory. 
B)  new growth theory. 
C)  neoclassical growth theory. 
D)  aggregate production theory. 
A)  classical growth theory. 
B)  new growth theory. 
C)  neoclassical growth theory. 
D)  aggregate production theory.

Question 4

An advance in technology increases the productivity of labor. As a result, the nation's production function shifts ________ and the ________ labor curve shifts rightward.

Accepted Answer

A)  upward; demand for 
B)  downward; demand for 
C)  upward; supply of 
D)  downward; supply of 
A)  upward; demand for 
B)  downward; demand for 
C)  upward; supply of 
D)  downward; supply of

Question 5

Activities that encourage faster growth are

Accepted Answer

A)  investment in new capital and human capital. 
B)  high levels of consumption and low levels of savings. 
C)  taxes on saving that serve to encourage more spending and less saving. 
D)  developing trade barriers to protect national industries. 
A)  investment in new capital and human capital. 
B)  high levels of consumption and low levels of savings. 
C)  taxes on saving that serve to encourage more spending and less saving. 
D)  developing trade barriers to protect national industries.

Question 6

If the price level rises by 2 percent and workers' money wages increase by 2 percent, then the

Accepted Answer

A)  quantity of labor supply decreases. 
B)  quantity of labor supply increases. 
C)  quantity of labor supplied does not change because there is no change in the real wage rate. 
D)  More information about the dollar change in the price level and money wage rate are needed to answer the question. 
A)  quantity of labor supply decreases. 
B)  quantity of labor supply increases. 
C)  quantity of labor supplied does not change because there is no change in the real wage rate. 
D)  More information about the dollar change in the price level and money wage rate are needed to answer the question.

Question 7

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

Accepted Answer

A) True 
 B)False

Question 8

Over the past 100 years real GDP per person in the United States, on average, has

Accepted Answer

A)  decreased by about 5 percent per year. 
B)  increased by about 2 percent per year. 
C)  increased by about 5 percent per year. 
D)  increased by about 10 percent per year. 
A)  decreased by about 5 percent per year. 
B)  increased by about 2 percent per year. 
C)  increased by about 5 percent per year. 
D)  increased by about 10 percent per year.

Question 9

Which of the following statements regarding U.S. economic growth is NOT correct?

Accepted Answer

A)  Over the past 100 years, on the average real GDP per person grew 2 percent a year. 
B)  The average annual growth rate of real GDP per person in the United States was rapid during World War II. 
C)  In the 1930s, real GDP fell well below its trend. 
D)  The growth rate of real GDP per person accelerated between 1973 to 1984. 
A)  Over the past 100 years, on the average real GDP per person grew 2 percent a year. 
B)  The average annual growth rate of real GDP per person in the United States was rapid during World War II. 
C)  In the 1930s, real GDP fell well below its trend. 
D)  The growth rate of real GDP per person accelerated between 1973 to 1984.

Question 10

Over the past fifty years, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

Accepted Answer

A)  the United States and Central and South America 
B)  Africa and Western Europe 
C)  Central and South America and Africa 
D)  the United States and Japan 
A)  the United States and Central and South America 
B)  Africa and Western Europe 
C)  Central and South America and Africa 
D)  the United States and Japan

Question 11

Saving and investment that increase a nation's capital lead to

Accepted Answer

A)  slower growth because there is a lack of consumption. 
B)  a decrease in labor productivity as capital is used to replace labor. 
C)  a decrease in the amount of capital per worker. 
D)  an increase in labor productivity. 
A)  slower growth because there is a lack of consumption. 
B)  a decrease in labor productivity as capital is used to replace labor. 
C)  a decrease in the amount of capital per worker. 
D)  an increase in labor productivity.

Question 12

The U.S. employment-to-population ratio peaked in 2000 and in 2014 fell to 59 percent, a level not seen since the early 1980s. This fall in the employment-to-population ratio shifts the ________ curve ________.

Accepted Answer

A)  labor supply; leftward 
B)  labor supply; rightward 
C)  labor demand; leftward 
D)  labor demand; rightward 
A)  labor supply; leftward 
B)  labor supply; rightward 
C)  labor demand; leftward 
D)  labor demand; rightward

Question 13

Which theory emphasizes the significance of new discoveries that can be used by many people at the same time?

Accepted Answer

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

Question 14

Which of the following statements are TRUE regarding the demand for labor?
I.The quantity of labor demanded depends on the real wage rate.
II.If the money wage rate increases and the price level remains the same, the quantity of labor demanded decreases.

Accepted Answer

A)  I only 
B)  II only 
C)  I and II 
D)  neither I nor II 
A)  I only 
B)  II only 
C)  I and II 
D)  neither I nor II

Question 15

When the quantity of labor demanded exceeds the quantity of labor supplied, the real wage rate

Accepted Answer

A)  rises to eliminate the labor-market shortage. 
B)  falls to eliminate the labor-market surplus. 
C)  rises to eliminate the labor-market surplus. 
D)  falls to eliminate the labor-market shortage. 
A)  rises to eliminate the labor-market shortage. 
B)  falls to eliminate the labor-market surplus. 
C)  rises to eliminate the labor-market surplus. 
D)  falls to eliminate the labor-market shortage.

Question 16

According to the Economic Times (09/2012), Standard & Poor's forecast for India's GDP growth rate was cut by 1 percentage point to 5.5 percent as the entire Asia Pacific region feels the pressure of ongoing economic uncertainty. India has averaged 7 percent growth in GDP since 1997. Which of the following is TRUE?

Accepted Answer

A)  India's PPF has been shifting rightward since 1997. 
B)  India's PPF has been shifting leftward since 1997. 
C)  India has been moving from a point within its PPF to points beyond its PPF. 
D)  India's PPF has not shifted since 1997. 
A)  India's PPF has been shifting rightward since 1997. 
B)  India's PPF has been shifting leftward since 1997. 
C)  India has been moving from a point within its PPF to points beyond its PPF. 
D)  India's PPF has not shifted since 1997.

Question 17

According to the Economic Times (09/2012), Standard & Poor's forecast for India's GDP growth rate was cut by 1 percentage point to 5.5 percent as the entire Asia Pacific region feels the pressure of ongoing economic uncertainty. India has averaged 7 percent growth in GDP since 1997. Based on this story, it is most likely that the slowdown reflects a

Accepted Answer

A)  temporary business cycle slowdown. 
B)  temporary business cycle expansion. 
C)  change to India's long-term economic growth rate. 
D)  shrinkage of India's economy. 
A)  temporary business cycle slowdown. 
B)  temporary business cycle expansion. 
C)  change to India's long-term economic growth rate. 
D)  shrinkage of India's economy.

Question 18

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

Accepted Answer

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

Question 19

The demand for labor curve is

Accepted Answer

A)  upward sloping at potential GDP and downward sloping elsewhere. 
B)  vertical at potential GDP. 
C)  downward sloping. 
D)  upward sloping because firms demand labor. 
A)  upward sloping at potential GDP and downward sloping elsewhere. 
B)  vertical at potential GDP. 
C)  downward sloping. 
D)  upward sloping because firms demand labor.

Question 20

What are the basic arguments of the neoclassical growth theory?

Accepted Answer

The neoclassical growth theory explains

Over the last 100 years, real GDP per person in the United States has grown at an average rate of approximately 2 percent per year.

An advance in technology increases the productivity of labor. As a result, the nation's production function shifts and the labor curve shifts rightward.

Activities that encourage faster growth are

If the price level rises by 2 percent and workers' money wages increase by 2 percent, then the

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

Over the past 100 years real GDP per person in the United States, on average, has

Which of the following statements regarding U.S. economic growth is NOT correct?

Over the past fifty years, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

Saving and investment that increase a nation's capital lead to

The U.S. employment-to-population ratio peaked in 2000 and in 2014 fell to 59 percent, a level not seen since the early 1980s. This fall in the employment-to-population ratio shifts the curve .

Which theory emphasizes the significance of new discoveries that can be used by many people at the same time?

Which of the following statements are TRUE regarding the demand for labor? I.The quantity of labor demanded depends on the real wage rate. II.If the money wage rate increases and the price level remains the same, the quantity of labor demanded decreases.

When the quantity of labor demanded exceeds the quantity of labor supplied, the real wage rate

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

The demand for labor curve is

What are the basic arguments of the neoclassical growth theory?

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

Over the last 100 years, real GDP per person in the United States has grown at an average rate of approximately 2 percent per year.

An advance in technology increases the productivity of labor. As a result, the nation's production function shifts ________ and the ________ labor curve shifts rightward.

Activities that encourage faster growth are

If the price level rises by 2 percent and workers' money wages increase by 2 percent, then the

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

Over the past 100 years real GDP per person in the United States, on average, has

Which of the following statements regarding U.S. economic growth is NOT correct?

Over the past fifty years, there has been substantial closure of the gap in real GDP per person between which of the following groups of countries?

Saving and investment that increase a nation's capital lead to

The U.S. employment-to-population ratio peaked in 2000 and in 2014 fell to 59 percent, a level not seen since the early 1980s. This fall in the employment-to-population ratio shifts the ________ curve ________.

Which theory emphasizes the significance of new discoveries that can be used by many people at the same time?

Which of the following statements are TRUE regarding the demand for labor? I.The quantity of labor demanded depends on the real wage rate. II.If the money wage rate increases and the price level remains the same, the quantity of labor demanded decreases.

When the quantity of labor demanded exceeds the quantity of labor supplied, the real wage rate

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

The demand for labor curve is

What are the basic arguments of the neoclassical growth theory?

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

An advance in technology increases the productivity of labor. As a result, the nation's production function shifts and the labor curve shifts rightward.

The U.S. employment-to-population ratio peaked in 2000 and in 2014 fell to 59 percent, a level not seen since the early 1980s. This fall in the employment-to-population ratio shifts the curve .