Question 1

When the labor market is in equilibrium,real GDP ________ potential GDP.

Accepted Answer

A) is greater than 
B) is equal to 
C) is less than 
D) might be greater than,less than,or equal to 
E) is not comparable to 
A) is greater than 
B) is equal to 
C) is less than 
D) might be greater than,less than,or equal to 
E) is not comparable to

Question 2

What is the Rule of 70?

Accepted Answer

The Rule of 70 is that the num

Question 3

If a nation's population grows at 2 percent and its real GDP grows at 4 percent,what is the growth rate of real GDP per person?

Accepted Answer

The growth rate of real GDP per person e

Question 4

The quantity of real GDP produced by one hour of labor is defined as

Accepted Answer

A) real GDP per person. 
B) the advance in technology. 
C) the growth rate of technology. 
D) labor productivity. 
E) economic growth. 
A) real GDP per person. 
B) the advance in technology. 
C) the growth rate of technology. 
D) labor productivity. 
E) economic growth.

Question 5

The supply of labor is defined as the relationship between the real wage rate and the

Accepted Answer

A) quantity of labor supplied by firms. 
B) amount of jobs supplied by firms. 
C) quantity of labor supplied by households. 
D) amount of jobs supplied by households. 
E) equilibrium quantity of employment. 
A) quantity of labor supplied by firms. 
B) amount of jobs supplied by firms. 
C) quantity of labor supplied by households. 
D) amount of jobs supplied by households. 
E) equilibrium quantity of employment.

Question 6

________ adopts the view that aggregate fluctuations are a natural consequence of an expanding economy.

Accepted Answer

A) Classical macroeconomics 
B) Keynesian economics 
C) The new macroeconomics 
D) The Lucas Wedge 
E) The Okun Gap 
A) Classical macroeconomics 
B) Keynesian economics 
C) The new macroeconomics 
D) The Lucas Wedge 
E) The Okun Gap

Question 7

To maximize profits,firms hire labor as long as

Accepted Answer

A) each additional hour hired produces more additional output than the real wage rate. 
B) the total hours hired produces more additional output than the real wage rate. 
C) each additional hour hired produces more additional output than the nominal wage rate. 
D) the quantity of labor supplied increases as the real wage rate increases. 
E) workers continue to supply labor to the firm. 
A) each additional hour hired produces more additional output than the real wage rate. 
B) the total hours hired produces more additional output than the real wage rate. 
C) each additional hour hired produces more additional output than the nominal wage rate. 
D) the quantity of labor supplied increases as the real wage rate increases. 
E) workers continue to supply labor to the firm.

Question 8

The quantity of labor demanded definitely increases if the

Accepted Answer

A) real wage rate rises. 
B) real wage rate falls. 
C) nominal wage rate rises. 
D) nominal wage rate falls. 
E) supply of labor decreases. 
A) real wage rate rises. 
B) real wage rate falls. 
C) nominal wage rate rises. 
D) nominal wage rate falls. 
E) supply of labor decreases.

Question 9

The production function shows that potential GDP increases when the

Accepted Answer

A) price level rises. 
B) price level falls. 
C) inflation rate falls. 
D) quantity of labor employed increases. 
E) the wage rate falls. 
A) price level rises. 
B) price level falls. 
C) inflation rate falls. 
D) quantity of labor employed increases. 
E) the wage rate falls.

Question 10

Real GDP per person averaged $150 a year (in 2009 dollars)from 1,000,000 BC until 1620.Then in ________ real GDP began to increase without limit and by 1850 had risen to twice its 1650 level because ________.

Accepted Answer

A) 1650;the Pilgrims arrived in the Americas 
B) 1750;Columbus arrived in the Americas 
C) 1650;of the Industrial Revolution 
D) 1750;of the Industrial Revolution 
E) 1776;United States was founded 
A) 1650;the Pilgrims arrived in the Americas 
B) 1750;Columbus arrived in the Americas 
C) 1650;of the Industrial Revolution 
D) 1750;of the Industrial Revolution 
E) 1776;United States was founded

Question 11

The ________ describes the relationship between the amount of labor employed and real GDP.

Accepted Answer

A) production function 
B) production possibilities frontier 
C) Lucas Wedge 
D) inflation rate 
E) Okun Gap 
A) production function 
B) production possibilities frontier 
C) Lucas Wedge 
D) inflation rate 
E) Okun Gap

Question 12

Which of the following characteristics is a precondition for economic growth?
I.economic freedom
Ii.free markets
Iii.active government policy to discourage saving

Accepted Answer

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

Question 13

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

Accepted Answer

A) 63 years 
B) 77.7 years 
C) 70 years 
D) 109 years 
E) 100 years 
A) 63 years 
B) 77.7 years 
C) 70 years 
D) 109 years 
E) 100 years

Question 14

-The tables above show a nation's labor demand and labor supply schedules and its production function.Given the equilibrium in the labor market,potential GDP is

Accepted Answer

A) $3.0 trillion. 
B) $3.7 trillion. 
C) $4.2 trillion. 
D) $4.5 trillion. 
E) $2.0 trillion. 
A) $3.0 trillion. 
B) $3.7 trillion. 
C) $4.2 trillion. 
D) $4.5 trillion. 
E) $2.0 trillion.

Question 15

The idea that the production function exhibits _______ implies that ________.

Accepted Answer

A) diminishing returns;the Lucas Wedge increases at output increases 
B) diminishing returns;each additional unit of labor employed generates an ever-decreasing amount of real GDP 
C) increasing returns;potential GDP is always increasing 
D) increasing returns;output should increase steadily as technology grows 
E) constant returns;each additional unit of labor employed generates an increasing amount of real GDP 
A) diminishing returns;the Lucas Wedge increases at output increases 
B) diminishing returns;each additional unit of labor employed generates an ever-decreasing amount of real GDP 
C) increasing returns;potential GDP is always increasing 
D) increasing returns;output should increase steadily as technology grows 
E) constant returns;each additional unit of labor employed generates an increasing amount of real GDP

Question 16

-The table above gives a nation's production function.Which of the following is NOT an attainable combination of real GDP and labor?

Accepted Answer

A) real GDP of $4.0 trillion and labor of 90 billion hours per year 
B) real GDP of $4.7 trillion and labor of 110 billion hours per year 
C) real GDP of $4.0 trillion and labor of 70 billion hours per year 
D) real GDP of $5.2 trillion and labor of 90 billion hours per year 
E) real GDP of $5.5 trillion and labor of 150 billion hours per year 
A) real GDP of $4.0 trillion and labor of 90 billion hours per year 
B) real GDP of $4.7 trillion and labor of 110 billion hours per year 
C) real GDP of $4.0 trillion and labor of 70 billion hours per year 
D) real GDP of $5.2 trillion and labor of 90 billion hours per year 
E) real GDP of $5.5 trillion and labor of 150 billion hours per year

Question 17

Economic growth is a sustained expansion of production possibilities measured as the increase in ________ over a given period.

Accepted Answer

A) real GDP 
B) real GDP per person 
C) the standard of living 
D) capital per person 
E) population 
A) real GDP 
B) real GDP per person 
C) the standard of living 
D) capital per person 
E) population

Question 18

If a country lacks ________,economic growth ________.

Accepted Answer

A) a democratic form of government;cannot occur 
B) a proper incentive system;cannot occur 
C) pure capitalism;will be slower compared to other countries 
D) a proper incentive system;will occur at a pace suggested by the new growth theory 
E) economic freedom;will increase at a faster pace 
A) a democratic form of government;cannot occur 
B) a proper incentive system;cannot occur 
C) pure capitalism;will be slower compared to other countries 
D) a proper incentive system;will occur at a pace suggested by the new growth theory 
E) economic freedom;will increase at a faster pace

Question 19

The Bubby Gum factory produces bubble gum.Joanne is one of the employees,and she produces 10 packs of bubble gum per hour.Joanne's money wage rate is $12 per hour.If a packet of bubble gum sells for $1.00,then Joanne ________ because ________.

Accepted Answer

A) is creating a $2.00 per hour loss for the firm;her real wage rate is more than her output per hour 
B) is creating a $2.00 per hour profit for the firm;her real wage rate is more than her output per hour 
C) should recommend that the Bubby Gum company should decrease the price of the bubble gum;it would sell more and bring a larger profit 
D) should ask for a raise in pay;then her real wage would be less than her output per hour 
E) is the last person the Bubby Gump company will employ;an additional hire would produce equal the amount of additional labor to real wage per hour 
A) is creating a $2.00 per hour loss for the firm;her real wage rate is more than her output per hour 
B) is creating a $2.00 per hour profit for the firm;her real wage rate is more than her output per hour 
C) should recommend that the Bubby Gum company should decrease the price of the bubble gum;it would sell more and bring a larger profit 
D) should ask for a raise in pay;then her real wage would be less than her output per hour 
E) is the last person the Bubby Gump company will employ;an additional hire would produce equal the amount of additional labor to real wage per hour

Question 20

As demonstrated by the labor supply schedule,the quantity of labor supplied depends on

Accepted Answer

A) the nominal wage. 
B) the amount of labor that firms want to hire. 
C) the real wage. 
D) the value of the dollar. 
E) workers' productivity. 
A) the nominal wage. 
B) the amount of labor that firms want to hire. 
C) the real wage. 
D) the value of the dollar. 
E) workers' productivity.

When the labor market is in equilibrium,real GDP ________ potential GDP.

What is the Rule of 70?

If a nation's population grows at 2 percent and its real GDP grows at 4 percent,what is the growth rate of real GDP per person?

The quantity of real GDP produced by one hour of labor is defined as

The supply of labor is defined as the relationship between the real wage rate and the

________ adopts the view that aggregate fluctuations are a natural consequence of an expanding economy.

To maximize profits,firms hire labor as long as

The quantity of labor demanded definitely increases if the

The production function shows that potential GDP increases when the

Real GDP per person averaged $150 a year (in 2009 dollars)from 1,000,000 BC until 1620.Then in real GDP began to increase without limit and by 1850 had risen to twice its 1650 level because .

The ________ describes the relationship between the amount of labor employed and real GDP.

Which of the following characteristics is a precondition for economic growth? I.economic freedom Ii.free markets Iii.active government policy to discourage saving

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

-The tables above show a nation's labor demand and labor supply schedules and its production function.Given the equilibrium in the labor market,potential GDP is

The idea that the production function exhibits _ implies that __.

-The table above gives a nation's production function.Which of the following is NOT an attainable combination of real GDP and labor?

Economic growth is a sustained expansion of production possibilities measured as the increase in ________ over a given period.

If a country lacks ,economic growth .

The Bubby Gum factory produces bubble gum.Joanne is one of the employees,and she produces 10 packs of bubble gum per hour.Joanne's money wage rate is $12 per hour.If a packet of bubble gum sells for $1.00,then Joanne because .

As demonstrated by the labor supply schedule,the quantity of labor supplied depends on

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

When the labor market is in equilibrium,real GDP ________ potential GDP.

What is the Rule of 70?

If a nation's population grows at 2 percent and its real GDP grows at 4 percent,what is the growth rate of real GDP per person?

The quantity of real GDP produced by one hour of labor is defined as

The supply of labor is defined as the relationship between the real wage rate and the

________ adopts the view that aggregate fluctuations are a natural consequence of an expanding economy.

To maximize profits,firms hire labor as long as

The quantity of labor demanded definitely increases if the

The production function shows that potential GDP increases when the

Real GDP per person averaged $150 a year (in 2009 dollars)from 1,000,000 BC until 1620.Then in ________ real GDP began to increase without limit and by 1850 had risen to twice its 1650 level because ________.

The ________ describes the relationship between the amount of labor employed and real GDP.

Which of the following characteristics is a precondition for economic growth? I.economic freedom Ii.free markets Iii.active government policy to discourage saving

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

-The tables above show a nation's labor demand and labor supply schedules and its production function.Given the equilibrium in the labor market,potential GDP is

The idea that the production function exhibits _______ implies that ________.

-The table above gives a nation's production function.Which of the following is NOT an attainable combination of real GDP and labor?

Economic growth is a sustained expansion of production possibilities measured as the increase in ________ over a given period.

If a country lacks ________,economic growth ________.

The Bubby Gum factory produces bubble gum.Joanne is one of the employees,and she produces 10 packs of bubble gum per hour.Joanne's money wage rate is $12 per hour.If a packet of bubble gum sells for $1.00,then Joanne ________ because ________.

As demonstrated by the labor supply schedule,the quantity of labor supplied depends on

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

Real GDP per person averaged $150 a year (in 2009 dollars)from 1,000,000 BC until 1620.Then in real GDP began to increase without limit and by 1850 had risen to twice its 1650 level because .

The idea that the production function exhibits _ implies that __.

If a country lacks ,economic growth .

The Bubby Gum factory produces bubble gum.Joanne is one of the employees,and she produces 10 packs of bubble gum per hour.Joanne's money wage rate is $12 per hour.If a packet of bubble gum sells for $1.00,then Joanne because .