Question 1

Human capital is acquired

Accepted Answer

A) only in school. 
B) only through on-the-job training. 
C) only through job experience. 
D) through schooling,job training,and experience. 
E) only at birth,that is,it's people's inborn talents. 
A) only in school. 
B) only through on-the-job training. 
C) only through job experience. 
D) through schooling,job training,and experience. 
E) only at birth,that is,it's people's inborn talents.

Question 2

Define potential GDP.Under what circumstances does actual real GDP fall short of potential GDP,equal potential GDP,and exceed potential GDP?

Accepted Answer

Potential GDP is the level of real GDP t

Question 3

The Lucas Wedge shows

Accepted Answer

A) the negative impact a slowdown in real GDP growth has on potential GDP. 
B) the increased impact of government spending on real GDP. 
C) the negative impact inflation has on consumer spending. 
D) the positive impact lower taxes have on real GDP. 
E) whether a country needs to slow its real GDP growth rate. 
A) the negative impact a slowdown in real GDP growth has on potential GDP. 
B) the increased impact of government spending on real GDP. 
C) the negative impact inflation has on consumer spending. 
D) the positive impact lower taxes have on real GDP. 
E) whether a country needs to slow its real GDP growth rate.

Question 4

A reason a nation faces diminishing returns along a production function is because

Accepted Answer

A) unemployment always exists. 
B) potential GDP is fixed. 
C) the quantity of physical capital is fixed. 
D) full employment is not possible. 
E) the wage rate is fixed while moving along the production function. 
A) unemployment always exists. 
B) potential GDP is fixed. 
C) the quantity of physical capital is fixed. 
D) full employment is not possible. 
E) the wage rate is fixed while moving along the production function.

Question 5

Holding all other influences constant,the quantity of labor supplied in a given time period depends

Accepted Answer

A) inversely on the real wage rate so that a higher real wage decreases the quantity of labor supplied. 
B) directly on the real wage rate so that a higher real wage increases the quantity of labor supplied. 
C) inversely on the quantity of labor demanded. 
D) on the money wage rate not the real wage rate. 
E) directly on the quantity of labor demanded. 
A) inversely on the real wage rate so that a higher real wage decreases the quantity of labor supplied. 
B) directly on the real wage rate so that a higher real wage increases the quantity of labor supplied. 
C) inversely on the quantity of labor demanded. 
D) on the money wage rate not the real wage rate. 
E) directly on the quantity of labor demanded.

Question 6

With fixed quantities of capital,land,and entrepreneurship and fixed technology,the amount of real GDP produced increases when ________ increases.
I.the quantity of labor employed
Ii.the inflation rate
Iii.the price level

Accepted Answer

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

Question 7

Growth in the standard of living is measured by the increase in

Accepted Answer

A) real GDP. 
B) the Rule of 70. 
C) employment. 
D) real GDP per person. 
E) consumption. 
A) real GDP. 
B) the Rule of 70. 
C) employment. 
D) real GDP per person. 
E) consumption.

Question 8

-According to the data in the table above,

Accepted Answer

A) the standard of living improved between year 1 and year 2. 
B) the standard of living worsened between year 1 and year 2. 
C) as measured by real GDP per person,the standard of living remained the same between year 1 and year 2. 
D) real GDP grew more rapidly than population between year 1 and year 2. 
E) real GDP grew more slowly than population between year 1 and year 2. 
A) the standard of living improved between year 1 and year 2. 
B) the standard of living worsened between year 1 and year 2. 
C) as measured by real GDP per person,the standard of living remained the same between year 1 and year 2. 
D) real GDP grew more rapidly than population between year 1 and year 2. 
E) real GDP grew more slowly than population between year 1 and year 2.

Question 9

Briefly define real and potential GDP,and explain the relationship between real GDP and potential GDP.How can we measure potential GDP?

Accepted Answer

Real GDP is the actual level of GDP,adju

Question 10

An increase in the real wage rate ________ the quantity of labor demanded and ________ the quantity of labor supplied.

Accepted Answer

A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;does not change 
A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;does not change

Question 11

One possible way of achieving faster economic growth is to

Accepted Answer

A) limit international trade. 
B) encourage international trade. 
C) limit research and development and concentrate on production of goods and services. 
D) abolish the system of patents and copyrights so that everyone can use people's ideas. 
E) let the government decide what research and development should be undertaken. 
A) limit international trade. 
B) encourage international trade. 
C) limit research and development and concentrate on production of goods and services. 
D) abolish the system of patents and copyrights so that everyone can use people's ideas. 
E) let the government decide what research and development should be undertaken.

Question 12

Why is economic growth so slow or non-existent in many third world countries? What policies would you propose to improve the situation?

Accepted Answer

Slow-growing third world countries gener

Question 13

Labor force productivity has increased from $30 per hour to $32 per hour over the past year.This could result from

Accepted Answer

A) only an increase in real GDP. 
B) an increase in real GDP with no change in the aggregate hours or a decrease in aggregate hours with no change in real GDP. 
C) only a decrease in aggregate hours. 
D) an increase in the labor force participation rate. 
E) an increase in population. 
A) only an increase in real GDP. 
B) an increase in real GDP with no change in the aggregate hours or a decrease in aggregate hours with no change in real GDP. 
C) only a decrease in aggregate hours. 
D) an increase in the labor force participation rate. 
E) an increase in population.

Question 14

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

Accepted Answer

A) Joanne is creating a $2.00 per hour loss for the firm. 
B) Joanne is creating a $2.00 per hour profit for the firm. 
C) the Bubby Gum company should decrease the price of the bubble gum so it sells more and makes a larger profit. 
D) the Bubby Gum company should pay Joanne more. 
E) None of the above answers is correct because more information about Joanne's real wage is needed to decide what to do. 
A) Joanne is creating a $2.00 per hour loss for the firm. 
B) Joanne is creating a $2.00 per hour profit for the firm. 
C) the Bubby Gum company should decrease the price of the bubble gum so it sells more and makes a larger profit. 
D) the Bubby Gum company should pay Joanne more. 
E) None of the above answers is correct because more information about Joanne's real wage is needed to decide what to do.

Question 15

A country reports that its actual real GDP is greater than its potential GDP.It must be that

Accepted Answer

A) an error was made when calculating actual real GDP. 
B) the price level is increasing. 
C) more workers decided to quit work in order to enjoy leisure time. 
D) the excess by which real GDP exceeds potential GDP is only temporary,and eventually real GDP will decrease to be equal to potential GDP. 
E) None of the above answers is correct because it is impossible for a country's real GDP to exceed its potential GDP. 
A) an error was made when calculating actual real GDP. 
B) the price level is increasing. 
C) more workers decided to quit work in order to enjoy leisure time. 
D) the excess by which real GDP exceeds potential GDP is only temporary,and eventually real GDP will decrease to be equal to potential GDP. 
E) None of the above answers is correct because it is impossible for a country's real GDP to exceed its potential GDP.

Question 16

If Turkey wants to promote faster economic growth,it will need to

Accepted Answer

A) promote incentive systems to encourage saving,research and development,increased trade and improved education. 
B) restrict economic freedom so the government has better control of markets. 
C) restrict international trade to protects its own workers. 
D) promote government intervention to help markets determine incentives. 
E) restrict property rights so that individuals can better share inventions. 
A) promote incentive systems to encourage saving,research and development,increased trade and improved education. 
B) restrict economic freedom so the government has better control of markets. 
C) restrict international trade to protects its own workers. 
D) promote government intervention to help markets determine incentives. 
E) restrict property rights so that individuals can better share inventions.

Question 17

During a business cycle recession,it is very likely that real GDP will

Accepted Answer

A) exceed nominal GDP. 
B) be less than potential GDP. 
C) equal nominal GDP but not equal potential GDP. 
D) equal nominal GDP and equal potential GDP. 
E) be greater than potential GDP. 
A) exceed nominal GDP. 
B) be less than potential GDP. 
C) equal nominal GDP but not equal potential GDP. 
D) equal nominal GDP and equal potential GDP. 
E) be greater than potential GDP.

Question 18

Saving

Accepted Answer

A) slows growth because it decreases consumption. 
B) finances investment which brings capital accumulation. 
C) has no impact on economic growth. 
D) is very low in most East Asian nations. 
E) is important for a country to gain the benefits of international trade. 
A) slows growth because it decreases consumption. 
B) finances investment which brings capital accumulation. 
C) has no impact on economic growth. 
D) is very low in most East Asian nations. 
E) is important for a country to gain the benefits of international trade.

Question 19

A nation's population was 250 million last year and is 255 million this year.If its real GDP was $8.5 trillion last year and is $8.8 trillion this year,what is its growth rate of real GDP per person?

Accepted Answer

Last year real GDP per person equaled ($

Question 20

When the labor market is in equilibrium,

Accepted Answer

A) there is excess labor supplied,which keeps real GDP less than potential GDP. 
B) there is full employment,which means that real GDP equals potential GDP. 
C) the real wage rate falls to equal the nominal wage rate because real GDP is greater than potential GDP. 
D) the real wage rate rises to allow real GDP to equal potential GDP. 
E) there is full employment but real GDP might be greater than,less than,or equal to potential GDP. 
A) there is excess labor supplied,which keeps real GDP less than potential GDP. 
B) there is full employment,which means that real GDP equals potential GDP. 
C) the real wage rate falls to equal the nominal wage rate because real GDP is greater than potential GDP. 
D) the real wage rate rises to allow real GDP to equal potential GDP. 
E) there is full employment but real GDP might be greater than,less than,or equal to potential GDP.

Human capital is acquired

Define potential GDP.Under what circumstances does actual real GDP fall short of potential GDP,equal potential GDP,and exceed potential GDP?

The Lucas Wedge shows

A reason a nation faces diminishing returns along a production function is because

Holding all other influences constant,the quantity of labor supplied in a given time period depends

With fixed quantities of capital,land,and entrepreneurship and fixed technology,the amount of real GDP produced increases when ________ increases. I.the quantity of labor employed Ii.the inflation rate Iii.the price level

Growth in the standard of living is measured by the increase in

-According to the data in the table above,

Briefly define real and potential GDP,and explain the relationship between real GDP and potential GDP.How can we measure potential GDP?

An increase in the real wage rate the quantity of labor demanded and the quantity of labor supplied.

One possible way of achieving faster economic growth is to

Why is economic growth so slow or non-existent in many third world countries? What policies would you propose to improve the situation?

Labor force productivity has increased from $30 per hour to $32 per hour over the past year.This could result from

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

A country reports that its actual real GDP is greater than its potential GDP.It must be that

If Turkey wants to promote faster economic growth,it will need to

During a business cycle recession,it is very likely that real GDP will

Saving

A nation's population was 250 million last year and is 255 million this year.If its real GDP was $8.5 trillion last year and is $8.8 trillion this year,what is its growth rate of real GDP per person?

When the labor market is in equilibrium,

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

Human capital is acquired

Define potential GDP.Under what circumstances does actual real GDP fall short of potential GDP,equal potential GDP,and exceed potential GDP?

The Lucas Wedge shows

A reason a nation faces diminishing returns along a production function is because

Holding all other influences constant,the quantity of labor supplied in a given time period depends

With fixed quantities of capital,land,and entrepreneurship and fixed technology,the amount of real GDP produced increases when ________ increases. I.the quantity of labor employed Ii.the inflation rate Iii.the price level

Growth in the standard of living is measured by the increase in

-According to the data in the table above,

Briefly define real and potential GDP,and explain the relationship between real GDP and potential GDP.How can we measure potential GDP?

An increase in the real wage rate ________ the quantity of labor demanded and ________ the quantity of labor supplied.

One possible way of achieving faster economic growth is to

Why is economic growth so slow or non-existent in many third world countries? What policies would you propose to improve the situation?

Labor force productivity has increased from $30 per hour to $32 per hour over the past year.This could result from

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

A country reports that its actual real GDP is greater than its potential GDP.It must be that

If Turkey wants to promote faster economic growth,it will need to

During a business cycle recession,it is very likely that real GDP will

Saving

A nation's population was 250 million last year and is 255 million this year.If its real GDP was $8.5 trillion last year and is $8.8 trillion this year,what is its growth rate of real GDP per person?

When the labor market is in equilibrium,

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

An increase in the real wage rate the quantity of labor demanded and the quantity of labor supplied.