Question 1

How do we calculate growth in a nation's standard of living?

Accepted Answer

The standard of living is measured by real GDP per person.Thus growth in the standard of living is calculated using the growth rate of real GDP per person.

Question 2

The productivity curve is a relationship between

Accepted Answer

A) real GDP per hour of labor and capital per hour of labor,with technology held constant. 
B) nominal GDP per hour of labor and capital per hour of labor,with technology held constant. 
C) real GDP per hour of labor and capital per hour of labor whenever technological growth occurs. 
D) real GDP per unit of capital and capital per hour of labor,with technology held constant. 
E) capital per hour of labor and technological growth. 
A) real GDP per hour of labor and capital per hour of labor,with technology held constant. 
B) nominal GDP per hour of labor and capital per hour of labor,with technology held constant. 
C) real GDP per hour of labor and capital per hour of labor whenever technological growth occurs. 
D) real GDP per unit of capital and capital per hour of labor,with technology held constant. 
E) capital per hour of labor and technological growth. A

Question 3

As the real wage rate rises,the opportunity cost of

Accepted Answer

A) working rises. 
B) saving rises. 
C) leisure rises. 
D) leisure falls. 
E) buying goods and services rises. 
A) working rises. 
B) saving rises. 
C) leisure rises. 
D) leisure falls. 
E) buying goods and services rises. C

Question 4

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

Accepted Answer

The production function is the relations

Question 5

The supply of labor curve has a ________ slope because as the real wage rate rises,________.

Accepted Answer

A) negative;firms hire fewer workers 
B) positive;the opportunity cost of leisure rises 
C) positive;the opportunity cost of leisure falls 
D) negative;households work more hours 
E) positive;firms offer more jobs 
A) negative;firms hire fewer workers 
B) positive;the opportunity cost of leisure rises 
C) positive;the opportunity cost of leisure falls 
D) negative;households work more hours 
E) positive;firms offer more jobs

Question 6

During 2008,Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth rate per person of -1.3 percent.These rates indicate that in Swaziland

Accepted Answer

A) there was an error when calculating the growth rates because the growth rate of real GDP per person cannot be negative. 
B) the population growth rate was negative. 
C) the population grew at a faster rate than real GDP. 
D) poverty levels are declining. 
E) real GDP grew more rapidly than did the population. 
A) there was an error when calculating the growth rates because the growth rate of real GDP per person cannot be negative. 
B) the population growth rate was negative. 
C) the population grew at a faster rate than real GDP. 
D) poverty levels are declining. 
E) real GDP grew more rapidly than did the population.

Question 7

Which of the following lists gives factors that increase labor productivity?

Accepted Answer

A) saving and investment in physical capital,and wage increases 
B) expansion of human capital,labor force increases,and discovery of new technologies 
C) expansion of human capital,population growth,and discovery of new technologies 
D) saving and investment in physical capital,expansion of human capital,and discovery of new technologies 
E) labor force increases and wage increases 
A) saving and investment in physical capital,and wage increases 
B) expansion of human capital,labor force increases,and discovery of new technologies 
C) expansion of human capital,population growth,and discovery of new technologies 
D) saving and investment in physical capital,expansion of human capital,and discovery of new technologies 
E) labor force increases and wage increases

Question 8

The Rule of 70 states that the level of a variable will double in

Accepted Answer

A) 70 years. 
B) the number of years equal to the variable's annual rate of growth divided by 70. 
C) the number of years equal to 70 divided by the variable's annual growth rate. 
D) the number of years equal to the variable's annual growth rate minus 70. 
E) the number of years equal to 70 multiplied by the variable's annual growth rate expressed as a decimal. 
A) 70 years. 
B) the number of years equal to the variable's annual rate of growth divided by 70. 
C) the number of years equal to 70 divided by the variable's annual growth rate. 
D) the number of years equal to the variable's annual growth rate minus 70. 
E) the number of years equal to 70 multiplied by the variable's annual growth rate expressed as a decimal.

Question 9

In 2011,real GDP in the United States was $60 per hour worked.In major European economies,real GDP averaged on $48 per hour worked.This difference is explained by the points that ________ and ________.

Accepted Answer

A) Americans work more hours than Europeans;Americans produce more per hour than Europeans 
B) Americans are equally as productive as Europeans;Americans work more hours on average 
C) Americans work the same number of hours per week as Europeans on average;Americans are less productive due to technology differences 
D) Americans take more vacations than Europeans;Americans take more sick days than Europeans 
E) Americans work less hours than Europeans;Americans take less sick days than Europeans 
A) Americans work more hours than Europeans;Americans produce more per hour than Europeans 
B) Americans are equally as productive as Europeans;Americans work more hours on average 
C) Americans work the same number of hours per week as Europeans on average;Americans are less productive due to technology differences 
D) Americans take more vacations than Europeans;Americans take more sick days than Europeans 
E) Americans work less hours than Europeans;Americans take less sick days than Europeans

Question 10

Real GDP can increase either because the quantity of labor increases or because labor productivity increases.What is the effect on the standard of living if real GDP increases because
a.the quantity of labor increases?
b.labor productivity increases?

Accepted Answer

a.An increase in real GDP because the qu

Question 11

The production function shows that as employment increases,real GDP

Accepted Answer

A) increases at an increasing rate. 
B) increases at a decreasing rate. 
C) increases at a constant rate. 
D) decreases at a decreasing rate. 
E) increases until it reaches potential GDP and then it starts to decrease. 
A) increases at an increasing rate. 
B) increases at a decreasing rate. 
C) increases at a constant rate. 
D) decreases at a decreasing rate. 
E) increases until it reaches potential GDP and then it starts to decrease.

Question 12

The following government policies will help achieve faster economic growth EXCEPT

Accepted Answer

A) discouraging saving and encouraging spending. 
B) encouraging research and development. 
C) establishing and protecting property rights. 
D) improving the quality of education. 
E) increasing saving. 
A) discouraging saving and encouraging spending. 
B) encouraging research and development. 
C) establishing and protecting property rights. 
D) improving the quality of education. 
E) increasing saving.

Question 13

Governments should promote education because education contributes to the nation's

Accepted Answer

A) employment. 
B) free markets. 
C) economic growth potential. 
D) international trade. 
E) protection of property rights. 
A) employment. 
B) free markets. 
C) economic growth potential. 
D) international trade. 
E) protection of property rights.

Question 14

-The first table above gives the labor demand and labor supply schedules for a nation.The second table gives its production function.
a.What is the equilibrium real wage rate and the level of employment?
b.What is potential GDP?

Accepted Answer

a.The equilibrium real wage rate is $15

Question 15

One of the possible roles governments can play in sponsoring growth is to

Accepted Answer

A) provide tax incentives to encourage saving. 
B) own more of the nation's resources in order to put them to use. 
C) close the nation to trade in order to protect its domestic producers. 
D) make decisions for its citizens as to the most suitable job. 
E) limit the use of property rights in order to decrease the harm they create. 
A) provide tax incentives to encourage saving. 
B) own more of the nation's resources in order to put them to use. 
C) close the nation to trade in order to protect its domestic producers. 
D) make decisions for its citizens as to the most suitable job. 
E) limit the use of property rights in order to decrease the harm they create.

Question 16

Property rights protect

Accepted Answer

A) only the rights to physical property. 
B) only the rights to financial property. 
C) all rights except rights to intellectual property. 
D) rights to physical property,financial property,and intellectual property. 
E) the government's right to impose taxes. 
A) only the rights to physical property. 
B) only the rights to financial property. 
C) all rights except rights to intellectual property. 
D) rights to physical property,financial property,and intellectual property. 
E) the government's right to impose taxes.

Question 17

The growth rate of real GDP equals

Accepted Answer

A) [(employment in the current year - employment in previous year)/employment in previous year] × 100. 
B) [(real GDP in current year - real GDP in previous year)÷ real GDP in previous year] × 100. 
C) [(real GDP in previous year - real GDP in current year)÷ real GDP in previous year] × 100. 
D) [(real GDP in current year - real GDP in previous year)÷ real GDP in current year] × 100. 
E) (real GDP in current year - real GDP in previous year)× 100. 
A) [(employment in the current year - employment in previous year)/employment in previous year] × 100. 
B) [(real GDP in current year - real GDP in previous year)÷ real GDP in previous year] × 100. 
C) [(real GDP in previous year - real GDP in current year)÷ real GDP in previous year] × 100. 
D) [(real GDP in current year - real GDP in previous year)÷ real GDP in current year] × 100. 
E) (real GDP in current year - real GDP in previous year)× 100.

Question 18

Diminishing returns along a production function means that each additional hour of labor employed

Accepted Answer

A) produces a successively smaller additional amount of real GDP. 
B) produces a successively larger additional amount of real GDP. 
C) produces a constant additional amount of real GDP. 
D) does not produce any additional real GDP. 
E) forces the real wage rate to rise. 
A) produces a successively smaller additional amount of real GDP. 
B) produces a successively larger additional amount of real GDP. 
C) produces a constant additional amount of real GDP. 
D) does not produce any additional real GDP. 
E) forces the real wage rate to rise.

Question 19

Diminishing returns means that

Accepted Answer

A) each additional unit of labor produces successively less real GDP. 
B) hiring more labor results in less real GDP. 
C) each extra unit of real GDP produced requires less labor. 
D) each additional unit of labor produces successively more real GDP. 
E) hiring more labor must lower the real wage rate. 
A) each additional unit of labor produces successively less real GDP. 
B) hiring more labor results in less real GDP. 
C) each extra unit of real GDP produced requires less labor. 
D) each additional unit of labor produces successively more real GDP. 
E) hiring more labor must lower the real wage rate.

Question 20

A firm's demand for labor depends on the

Accepted Answer

A) nominal wage rate because it pays workers in dollars. 
B) real wage rate,which equals the nominal wage divided by the price level. 
C) real wage rate,which equals the nominal wage divided by the hours worked. 
D) nominal wage rate,which equals the real wage divided by the price level. 
E) supply of labor. 
A) nominal wage rate because it pays workers in dollars. 
B) real wage rate,which equals the nominal wage divided by the price level. 
C) real wage rate,which equals the nominal wage divided by the hours worked. 
D) nominal wage rate,which equals the real wage divided by the price level. 
E) supply of labor.

How do we calculate growth in a nation's standard of living?

The productivity curve is a relationship between

As the real wage rate rises,the opportunity cost of

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

The supply of labor curve has a slope because as the real wage rate rises,.

During 2008,Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth rate per person of -1.3 percent.These rates indicate that in Swaziland

Which of the following lists gives factors that increase labor productivity?

The Rule of 70 states that the level of a variable will double in

In 2011,real GDP in the United States was $60 per hour worked.In major European economies,real GDP averaged on $48 per hour worked.This difference is explained by the points that and .

Real GDP can increase either because the quantity of labor increases or because labor productivity increases.What is the effect on the standard of living if real GDP increases because a.the quantity of labor increases? b.labor productivity increases?

The production function shows that as employment increases,real GDP

The following government policies will help achieve faster economic growth EXCEPT

Governments should promote education because education contributes to the nation's

-The first table above gives the labor demand and labor supply schedules for a nation.The second table gives its production function. a.What is the equilibrium real wage rate and the level of employment? b.What is potential GDP?

One of the possible roles governments can play in sponsoring growth is to

Property rights protect

The growth rate of real GDP equals

Diminishing returns along a production function means that each additional hour of labor employed

Diminishing returns means that

A firm's demand for labor depends on the

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 17: Potential Gdp and Economic Growth

How do we calculate growth in a nation's standard of living?

The productivity curve is a relationship between

As the real wage rate rises,the opportunity cost of

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

The supply of labor curve has a ________ slope because as the real wage rate rises,________.

During 2008,Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth rate per person of -1.3 percent.These rates indicate that in Swaziland

Which of the following lists gives factors that increase labor productivity?

The Rule of 70 states that the level of a variable will double in

In 2011,real GDP in the United States was $60 per hour worked.In major European economies,real GDP averaged on $48 per hour worked.This difference is explained by the points that ________ and ________.

Real GDP can increase either because the quantity of labor increases or because labor productivity increases.What is the effect on the standard of living if real GDP increases because a.the quantity of labor increases? b.labor productivity increases?

The production function shows that as employment increases,real GDP

The following government policies will help achieve faster economic growth EXCEPT

Governments should promote education because education contributes to the nation's

-The first table above gives the labor demand and labor supply schedules for a nation.The second table gives its production function. a.What is the equilibrium real wage rate and the level of employment? b.What is potential GDP?

One of the possible roles governments can play in sponsoring growth is to

Property rights protect

The growth rate of real GDP equals

Diminishing returns along a production function means that each additional hour of labor employed

Diminishing returns means that

A firm's demand for labor depends on the

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

The supply of labor curve has a slope because as the real wage rate rises,.

In 2011,real GDP in the United States was $60 per hour worked.In major European economies,real GDP averaged on $48 per hour worked.This difference is explained by the points that and .