Question 1

Which of the following can reduce the level of economic growth?

Accepted Answer

A)  Crowding out. 
B)  Technological improvements. 
C)  Higher ratios of capital to labor. 
D)  Crowding in. 
A)  Crowding out. 
B)  Technological improvements. 
C)  Higher ratios of capital to labor. 
D)  Crowding in. A

Question 2

Long-run economic growth requires an increase in potential GDP.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is most likely to increase aggregate supply?

Accepted Answer

A)  An increase in safety regulations. 
B)  A decrease in the capital gains tax. 
C)  An increase in the minimum wage. 
D)  An increase in government borrowing. 
A)  An increase in safety regulations. 
B)  A decrease in the capital gains tax. 
C)  An increase in the minimum wage. 
D)  An increase in government borrowing. B

Question 4

Increased saving:

Accepted Answer

A)  Allows for increased investment. 
B)  Causes a decrease in economic growth. 
C)  Jeopardizes economic freedom. 
D)  Causes crowding out. 
A)  Allows for increased investment. 
B)  Causes a decrease in economic growth. 
C)  Jeopardizes economic freedom. 
D)  Causes crowding out.

Question 5

Improved labor skills contribute to growth of the economy by:

Accepted Answer

A)  Increasing productivity. 
B)  Raising savings rates. 
C)  Raising investment rates. 
D)  Replacing capital. 
A)  Increasing productivity. 
B)  Raising savings rates. 
C)  Raising investment rates. 
D)  Replacing capital.

Question 6

Which of the following explains why GDP per capita is likely to decline in less developed countries?

Accepted Answer

A)  Unemployment growth is greater than population growth. 
B)  Population growth is greater than inflation. 
C)  GDP growth is greater than capital investment growth. 
D)  Population growth is greater than GDP growth. 
A)  Unemployment growth is greater than population growth. 
B)  Population growth is greater than inflation. 
C)  GDP growth is greater than capital investment growth. 
D)  Population growth is greater than GDP growth.

Question 7

The size of the labor force and the quality of labor are impacted by immigration policy.

Accepted Answer

A) True 
 B)False

Question 8

Real GDP measures the:

Accepted Answer

A)  Market value of goods and services produced. 
B)  Standard of living. 
C)  Actual quantity of goods and services produced. 
D)  Level of productivity. 
A)  Market value of goods and services produced. 
B)  Standard of living. 
C)  Actual quantity of goods and services produced. 
D)  Level of productivity.

Question 9

Which of the following reduces the level of economic growth?

Accepted Answer

A)  Technological improvements. 
B)  Higher ratio of capital to labor. 
C)  Crowding out. 
D)  Research and development. 
A)  Technological improvements. 
B)  Higher ratio of capital to labor. 
C)  Crowding out. 
D)  Research and development.

Question 10

A reduction in private-sector borrowing and spending caused by increased government borrowing is known as:

Accepted Answer

A)  Crowding up. 
B)  Crowding in. 
C)  Over crowding. 
D)  Crowding out. 
A)  Crowding up. 
B)  Crowding in. 
C)  Over crowding. 
D)  Crowding out.

Question 11

GDP per capita is:

Accepted Answer

A)  Total GDP multiplied by total population. 
B)  Total GDP divided by total population. 
C)  Total output divided by total labor force. 
D)  The percentage change in real GDP from one period to another. 
A)  Total GDP multiplied by total population. 
B)  Total GDP divided by total population. 
C)  Total output divided by total labor force. 
D)  The percentage change in real GDP from one period to another.

Question 12

Which of the following is not a source of productivity gain?

Accepted Answer

A)  An increase in population. 
B)  An increase in the ratio of capital to labor. 
C)  Development of better capital equipment and products. 
D)  Better use of resources in the production process. 
A)  An increase in population. 
B)  An increase in the ratio of capital to labor. 
C)  Development of better capital equipment and products. 
D)  Better use of resources in the production process.

Question 13

If real GDP was $7,700 billion in 2004 and $8,200 billion in 2005,the economic growth rate was approximately ___ percent.

Accepted Answer

A)  6.1 
B)  6.3 
C)  6.5 
D)  9.3 
A)  6.1 
B)  6.3 
C)  6.5 
D)  9.3

Question 14

Supply-side economists believe that:

Accepted Answer

A)  Government regulation is necessary to ensure the correct mix of output. 
B)  A decrease in regulation will shift the aggregate supply curve to the right. 
C)  A decrease in regulation will allow producers to abuse consumers. 
D)  Government regulation encourages long-run economic growth. 
A)  Government regulation is necessary to ensure the correct mix of output. 
B)  A decrease in regulation will shift the aggregate supply curve to the right. 
C)  A decrease in regulation will allow producers to abuse consumers. 
D)  Government regulation encourages long-run economic growth.

Question 15

Compare the conflict between short-term profits and long-term productivity gains.

Accepted Answer

By cutting investment spending,a firm ca

Question 16

Improved management has made the greatest contribution to economic growth in the United States.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is true regarding crowding out?

Accepted Answer

A)  Saving is diverted from business investment to government spending. 
B)  Businesses that pay less than minimum wage are forced to close. 
C)  Consumption is encouraged because property rights are protected. 
D)  Immigrants without the required skills are forced out of the labor market. 
A)  Saving is diverted from business investment to government spending. 
B)  Businesses that pay less than minimum wage are forced to close. 
C)  Consumption is encouraged because property rights are protected. 
D)  Immigrants without the required skills are forced out of the labor market.

Question 18

Growth in GDP per capita has allowed Americans to live longer and consume more goods and services.

Accepted Answer

A) True 
 B)False

Question 19

Crowding out occurs when the government:

Accepted Answer

A)  Increases taxes,thus causing a decrease in consumption. 
B)  Borrows money,thus making it more difficult for the private sector to borrow. 
C)  Prints money,which displaces currency. 
D)  Encourages saving,which makes more dollars available for borrowing. 
A)  Increases taxes,thus causing a decrease in consumption. 
B)  Borrows money,thus making it more difficult for the private sector to borrow. 
C)  Prints money,which displaces currency. 
D)  Encourages saving,which makes more dollars available for borrowing.

Question 20

Rising employment rates imply falling GDP per capita.

Accepted Answer

A) True 
 B)False

Which of the following can reduce the level of economic growth?

Long-run economic growth requires an increase in potential GDP.

Which of the following is most likely to increase aggregate supply?

Increased saving:

Improved labor skills contribute to growth of the economy by:

Which of the following explains why GDP per capita is likely to decline in less developed countries?

The size of the labor force and the quality of labor are impacted by immigration policy.

Real GDP measures the:

Which of the following reduces the level of economic growth?

A reduction in private-sector borrowing and spending caused by increased government borrowing is known as:

GDP per capita is:

Which of the following is not a source of productivity gain?

If real GDP was $7,700 billion in 2004 and $8,200 billion in 2005,the economic growth rate was approximately ___ percent.

Supply-side economists believe that:

Compare the conflict between short-term profits and long-term productivity gains.

Improved management has made the greatest contribution to economic growth in the United States.

Which of the following statements is true regarding crowding out?

Growth in GDP per capita has allowed Americans to live longer and consume more goods and services.

Crowding out occurs when the government:

Rising employment rates imply falling GDP per capita.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Theory and Reality

International Trade

Filters

Exam 15: Economic Growth

Which of the following can reduce the level of economic growth?

Long-run economic growth requires an increase in potential GDP.

Which of the following is most likely to increase aggregate supply?

Increased saving:

Improved labor skills contribute to growth of the economy by:

Which of the following explains why GDP per capita is likely to decline in less developed countries?

The size of the labor force and the quality of labor are impacted by immigration policy.

Real GDP measures the:

Which of the following reduces the level of economic growth?

A reduction in private-sector borrowing and spending caused by increased government borrowing is known as:

GDP per capita is:

Which of the following is not a source of productivity gain?

If real GDP was $7,700 billion in 2004 and $8,200 billion in 2005,the economic growth rate was approximately ___ percent.

Supply-side economists believe that:

Compare the conflict between short-term profits and long-term productivity gains.

Improved management has made the greatest contribution to economic growth in the United States.

Which of the following statements is true regarding crowding out?

Growth in GDP per capita has allowed Americans to live longer and consume more goods and services.

Crowding out occurs when the government:

Rising employment rates imply falling GDP per capita.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Theory and Reality

International Trade

Filters