Question 1

The lower the real wage rate,the

Accepted Answer

A) fewer workers firms can profitably hire. 
B) more workers firms can profitably hire. 
C) more workers will supply labor. 
D) higher the nominal wage rate. 
E) larger the quantity of labor supplied. 
A) fewer workers firms can profitably hire. 
B) more workers firms can profitably hire. 
C) more workers will supply labor. 
D) higher the nominal wage rate. 
E) larger the quantity of labor supplied.

Question 2

In recent years,Taiwan has experienced increases in savings and investment.As a result of the higher investment and saving,we expect
I.increases in physical capital.
Ii.increases in the inflation rate.
Iii.advances in technology.

Accepted Answer

A) i and iii 
B) i and ii 
C) ii only 
D) ii and iii 
E) i,ii and iii 
A) i and iii 
B) i and ii 
C) ii only 
D) ii and iii 
E) i,ii and iii

Question 3

If the real wage rate decreases from $14.00 per hour to $13.00 per hour,the

Accepted Answer

A) quantity demanded of labor increases. 
B) demand for labor increases. 
C) quantity supplied of labor increases. 
D) supply of labor increases. 
E) equilibrium quantity of employment must decrease. 
A) quantity demanded of labor increases. 
B) demand for labor increases. 
C) quantity supplied of labor increases. 
D) supply of labor increases. 
E) equilibrium quantity of employment must decrease.

Question 4

Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year.How many years will it take for real GDP and real GDP per person to double?

Accepted Answer

Use the Rule of 70 for both answers.The

Question 5

Labor productivity equals ________.

Accepted Answer

A) real GDP × aggregate hours 
B) real GDP ÷ aggregate hours 
C) aggregate hours ÷ real GDP 
D) aggregate hours × labor productivity 
E) aggregate hours ÷ labor productivity 
A) real GDP × aggregate hours 
B) real GDP ÷ aggregate hours 
C) aggregate hours ÷ real GDP 
D) aggregate hours × labor productivity 
E) aggregate hours ÷ labor productivity

Question 6

In 2009,U.S.real GDP decreased by 3 percent and the population grew by 1 percent.Thus,real GDP per person

Accepted Answer

A) increased 2 percent. 
B) decreased 2 percent. 
C) increased 4 percent. 
D) decreased 4 percent. 
E) decreased 3 percent. 
A) increased 2 percent. 
B) decreased 2 percent. 
C) increased 4 percent. 
D) decreased 4 percent. 
E) decreased 3 percent.

Question 7

If the level of technology rises,GDP per hour of labor

Accepted Answer

A) increases for any level of capital per hour of labor. 
B) increases because the level of capital per hour of labor increases. 
C) decreases for a given level of capital per hour of labor. 
D) decreases because the level of capital per hour of labor decreases. 
E) does not change because GDP increases only when capital or labor increases. 
A) increases for any level of capital per hour of labor. 
B) increases because the level of capital per hour of labor increases. 
C) decreases for a given level of capital per hour of labor. 
D) decreases because the level of capital per hour of labor decreases. 
E) does not change because GDP increases only when capital or labor increases.

Question 8

The demand for labor curve is

Accepted Answer

A) a vertical line because firms have to hire labor. 
B) upward sloping,showing that as the real wage rate increases,more workers are hired. 
C) a horizontal line because we assume that the real wage rate is fixed. 
D) downward sloping,showing that the quantity of labor demanded increases when the real wage falls. 
E) U-shaped. 
A) a vertical line because firms have to hire labor. 
B) upward sloping,showing that as the real wage rate increases,more workers are hired. 
C) a horizontal line because we assume that the real wage rate is fixed. 
D) downward sloping,showing that the quantity of labor demanded increases when the real wage falls. 
E) U-shaped.

Question 9

Choose which statement is most correct.

Accepted Answer

A) Real GDP can never exceed potential GDP. 
B) Real GDP must always equal potential GDP. 
C) At times,real GDP can exceed potential GDP. 
D) Nominal GDP can never exceed potential GDP. 
E) Nominal GDP must always equal potential GDP. 
A) Real GDP can never exceed potential GDP. 
B) Real GDP must always equal potential GDP. 
C) At times,real GDP can exceed potential GDP. 
D) Nominal GDP can never exceed potential GDP. 
E) Nominal GDP must always equal potential GDP.

Question 10

The sustainable upper limit of real GDP is a level of GDP that is

Accepted Answer

A) greater than potential GDP,but by how much greater is unknown and controversial. 
B) less than potential GDP,but by how much less is unknown and controversial. 
C) potential GDP. 
D) determined only by what is the full employment equilibrium in the labor market. 
E) None of the above answers is correct because there is no sustainable upper limit to real GDP because real GDP can always be increased. 
A) greater than potential GDP,but by how much greater is unknown and controversial. 
B) less than potential GDP,but by how much less is unknown and controversial. 
C) potential GDP. 
D) determined only by what is the full employment equilibrium in the labor market. 
E) None of the above answers is correct because there is no sustainable upper limit to real GDP because real GDP can always be increased.

Question 11

A surplus of labor is eliminated by ________ in the real wage rate and a shortage of labor is eliminated by ________ in the real wage rate.

Accepted Answer

A) an increase;an increase 
B) an increase;a decrease 
C) a decrease;an increase 
D) a decrease;a decrease 
E) None of the above answers is correct because shortages and surpluses are eliminated by changes in the demand for labor and the supply of labor,not the wage rate. 
A) an increase;an increase 
B) an increase;a decrease 
C) a decrease;an increase 
D) a decrease;a decrease 
E) None of the above answers is correct because shortages and surpluses are eliminated by changes in the demand for labor and the supply of labor,not the wage rate.

Question 12

Suppose India wants to measure how much the standard of living has changed over the last decade.Which piece of data should India use?

Accepted Answer

A) population 
B) real GDP per person 
C) real GDP 
D) wages 
E) inflation 
A) population 
B) real GDP per person 
C) real GDP 
D) wages 
E) inflation

Question 13

If New Zealand is operating at potential GDP,which of the following is true?
I.New Zealand only has frictional and structural unemployment.
Ii.There is no inflation in New Zealand.
Iii.New Zealand has positive net exports.

Accepted Answer

A) i,ii and iii 
B) i only 
C) i and ii 
D) i and iii 
E) ii only 
A) i,ii and iii 
B) i only 
C) i and ii 
D) i and iii 
E) ii only

Question 14

If the government raises income taxes,then the labor

Accepted Answer

A) demand curve shifts rightward. 
B) demand curve shifts leftward. 
C) supply curve shifts rightward. 
D) supply curve shifts leftward. 
E) Both answers B and D are correct. 
A) demand curve shifts rightward. 
B) demand curve shifts leftward. 
C) supply curve shifts rightward. 
D) supply curve shifts leftward. 
E) Both answers B and D are correct.

Question 15

Labor productivity is $30 per hour and aggregate hours are 165 billion hours.What does real GDP equal?

Accepted Answer

Real GDP equals (labor product

Question 16

As long as an additional worker hired by a firm produces

Accepted Answer

A) more output than the real wage rate,the firm will hire that worker. 
B) more output than the real wage rate,the firm will not hire that worker. 
C) less output than the real wage rate,the firm will hire that worker. 
D) some output,the firm will hire that worker. 
E) more output than the nominal wage rate,the firm will hire that worker. 
A) more output than the real wage rate,the firm will hire that worker. 
B) more output than the real wage rate,the firm will not hire that worker. 
C) less output than the real wage rate,the firm will hire that worker. 
D) some output,the firm will hire that worker. 
E) more output than the nominal wage rate,the firm will hire that worker.

Question 17

A technological change ________ and a change in the capital stock ________.

Accepted Answer

A) shifts the productivity curve;shifts the productivity curve 
B) shifts the productivity curve;creates a movement along the productivity curve 
C) creates a movement along the productivity curve;shifts the productivity curve 
D) does not change the productivity curve;creates a movement along the productivity curve 
E) does not change the productivity curve;shifts the productivity curve 
A) shifts the productivity curve;shifts the productivity curve 
B) shifts the productivity curve;creates a movement along the productivity curve 
C) creates a movement along the productivity curve;shifts the productivity curve 
D) does not change the productivity curve;creates a movement along the productivity curve 
E) does not change the productivity curve;shifts the productivity curve

Question 18

A measure of growth in the standard of living is the growth in

Accepted Answer

A) real GDP. 
B) population. 
C) real GDP minus the growth in population. 
D) population minus the growth in real GDP. 
E) employment. 
A) real GDP. 
B) population. 
C) real GDP minus the growth in population. 
D) population minus the growth in real GDP. 
E) employment.

Question 19

-The table above gives information about the economy of France.The growth rate of real GDP per person in 1998 is ________ percent.

Accepted Answer

A) 3.1 
B) 0.4 
C) 3.6 
D) 4.0 
E) 1.9 
A) 3.1 
B) 0.4 
C) 3.6 
D) 4.0 
E) 1.9

Question 20

-The above figure shows a nation's production function.Point B is ________ and ________ because ________.

Accepted Answer

A) attainable;efficient;the nation is using resources efficiently 
B) attainable;inefficient;the nation is using resources inefficiently 
C) unattainable;inefficient;the nation is using resources inefficiently 
D) unattainable;inefficient;the nation is using resources efficiently but they could be more efficient 
E) unattainable;efficient;the nation would be using resources efficiently if they could attain this level of production 
A) attainable;efficient;the nation is using resources efficiently 
B) attainable;inefficient;the nation is using resources inefficiently 
C) unattainable;inefficient;the nation is using resources inefficiently 
D) unattainable;inefficient;the nation is using resources efficiently but they could be more efficient 
E) unattainable;efficient;the nation would be using resources efficiently if they could attain this level of production

The lower the real wage rate,the

In recent years,Taiwan has experienced increases in savings and investment.As a result of the higher investment and saving,we expect I.increases in physical capital. Ii.increases in the inflation rate. Iii.advances in technology.

If the real wage rate decreases from $14.00 per hour to $13.00 per hour,the

Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year.How many years will it take for real GDP and real GDP per person to double?

Labor productivity equals ________.

In 2009,U.S.real GDP decreased by 3 percent and the population grew by 1 percent.Thus,real GDP per person

If the level of technology rises,GDP per hour of labor

The demand for labor curve is

Choose which statement is most correct.

The sustainable upper limit of real GDP is a level of GDP that is

A surplus of labor is eliminated by in the real wage rate and a shortage of labor is eliminated by in the real wage rate.

Suppose India wants to measure how much the standard of living has changed over the last decade.Which piece of data should India use?

If New Zealand is operating at potential GDP,which of the following is true? I.New Zealand only has frictional and structural unemployment. Ii.There is no inflation in New Zealand. Iii.New Zealand has positive net exports.

If the government raises income taxes,then the labor

Labor productivity is $30 per hour and aggregate hours are 165 billion hours.What does real GDP equal?

As long as an additional worker hired by a firm produces

A technological change and a change in the capital stock .

A measure of growth in the standard of living is the growth in

-The table above gives information about the economy of France.The growth rate of real GDP per person in 1998 is ________ percent.

-The above figure shows a nation's production function.Point B is and because .

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

The lower the real wage rate,the

In recent years,Taiwan has experienced increases in savings and investment.As a result of the higher investment and saving,we expect I.increases in physical capital. Ii.increases in the inflation rate. Iii.advances in technology.

If the real wage rate decreases from $14.00 per hour to $13.00 per hour,the

Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year.How many years will it take for real GDP and real GDP per person to double?

Labor productivity equals ________.

In 2009,U.S.real GDP decreased by 3 percent and the population grew by 1 percent.Thus,real GDP per person

If the level of technology rises,GDP per hour of labor

The demand for labor curve is

Choose which statement is most correct.

The sustainable upper limit of real GDP is a level of GDP that is

A surplus of labor is eliminated by ________ in the real wage rate and a shortage of labor is eliminated by ________ in the real wage rate.

Suppose India wants to measure how much the standard of living has changed over the last decade.Which piece of data should India use?

If New Zealand is operating at potential GDP,which of the following is true? I.New Zealand only has frictional and structural unemployment. Ii.There is no inflation in New Zealand. Iii.New Zealand has positive net exports.

If the government raises income taxes,then the labor

Labor productivity is $30 per hour and aggregate hours are 165 billion hours.What does real GDP equal?

As long as an additional worker hired by a firm produces

A technological change ________ and a change in the capital stock ________.

A measure of growth in the standard of living is the growth in

-The table above gives information about the economy of France.The growth rate of real GDP per person in 1998 is ________ percent.

-The above figure shows a nation's production function.Point B is ________ and ________ because ________.

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

A surplus of labor is eliminated by in the real wage rate and a shortage of labor is eliminated by in the real wage rate.

A technological change and a change in the capital stock .

-The above figure shows a nation's production function.Point B is and because .