Question 1

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

Accepted Answer

A) unattainable. 
B) attainable if the nation uses resources inefficiently. 
C) attainable if the nation uses resources efficiently. 
D) the maximum amount of real GDP the nation can ever produce. 
E) Both answers C and D are correct. 
A) unattainable. 
B) attainable if the nation uses resources inefficiently. 
C) attainable if the nation uses resources efficiently. 
D) the maximum amount of real GDP the nation can ever produce. 
E) Both answers C and D are correct.

Question 2

-The table above shows the labor demand and labor supply schedules for a nation.The equilibrium real wage rate is ________ and the equilibrium quantity of labor is ________ billions of hours per year.

Accepted Answer

A) $25;260 
B) $20;280 
C) $20;260 
D) $15;260 
E) $40;320 
A) $25;260 
B) $20;280 
C) $20;260 
D) $15;260 
E) $40;320

Question 3

Last year,in a nation far to the South,real GDP was $90 million and 900,000 workers were employed.This year real GDP is $100 million,950,000 workers are employed,and the number of hours each worker works per year did not change.Hence,labor productivity

Accepted Answer

A) has increased. 
B) has decreased. 
C) has remained constant. 
D) cannot be compared between the two years because both real GDP and the number of workers increased. 
E) might have changed,but more information is needed to determine if it changed. 
A) has increased. 
B) has decreased. 
C) has remained constant. 
D) cannot be compared between the two years because both real GDP and the number of workers increased. 
E) might have changed,but more information is needed to determine if it changed.

Question 4

In growth theory,the change in a country's standard of living is measured by the change in

Accepted Answer

A) real GDP per person. 
B) real GDP. 
C) the nation's capital stock. 
D) wages per person. 
E) employment. 
A) real GDP per person. 
B) real GDP. 
C) the nation's capital stock. 
D) wages per person. 
E) employment.

Question 5

A firm hires labor up to the point where the

Accepted Answer

A) real wage rate equals the nominal wage rate. 
B) additional hour of labor produces extra output that equals the real wage rate. 
C) additional hour of labor produces extra output that equals the nominal wage rate. 
D) firm can sell the extra output. 
E) real wage rate exceeds the nominal wage rate. 
A) real wage rate equals the nominal wage rate. 
B) additional hour of labor produces extra output that equals the real wage rate. 
C) additional hour of labor produces extra output that equals the nominal wage rate. 
D) firm can sell the extra output. 
E) real wage rate exceeds the nominal wage rate.

Question 6

Labor productivity is equal to the quantity of

Accepted Answer

A) real GDP produced by one hour of labor. 
B) workers employed during one hour. 
C) real GDP consumed by the total population in one hour. 
D) real GDP. 
E) workers who are gainfully employed. 
A) real GDP produced by one hour of labor. 
B) workers employed during one hour. 
C) real GDP consumed by the total population in one hour. 
D) real GDP. 
E) workers who are gainfully employed.

Question 7

Which of the following ideas reflect the Monetarist macroeconomic model?
I.The Monetarist model supports the Classical model,in general.
Ii.Decreases in the growth rate of the quantity of money trigger recessions.
Iii.Government intervention is an appropriate tool to steady the economy.

Accepted Answer

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

Question 8

One possible way of achieving faster economic growth is to

Accepted Answer

A) encourage saving. 
B) protect the economy from international trade. 
C) limit investment because investment adds nothing to production today. 
D) eliminate property rights because they prevent people from using other people's ideas. 
E) tax saving so that people spend more and businesses make more profit. 
A) encourage saving. 
B) protect the economy from international trade. 
C) limit investment because investment adds nothing to production today. 
D) eliminate property rights because they prevent people from using other people's ideas. 
E) tax saving so that people spend more and businesses make more profit.

Question 9

For a household,the opportunity cost of not working is the

Accepted Answer

A) nominal wage rate. 
B) real wage rate. 
C) cost of living. 
D) price level. 
E) demand for labor. 
A) nominal wage rate. 
B) real wage rate. 
C) cost of living. 
D) price level. 
E) demand for labor.

Question 10

This year Iceland has a real GDP per person that is approximately 8 times greater than that of Cape Verde.Cape Verde's growth rate of real GDP per person was 5.2 percent.If Cape Verde maintains this current growth rate,approximately how many years will it take for Cape Verde's real GDP per person to reach the same level that Iceland has this year?

Accepted Answer

A) 13.5 years 
B) 20 years 
C) 27 years 
D) 40 years 
E) 54 years 
A) 13.5 years 
B) 20 years 
C) 27 years 
D) 40 years 
E) 54 years

Question 11

The gap in GDP between the United States and Europe can be explained by the fact that

Accepted Answer

A) U.S.labor is more productive than European labor. 
B) prices are higher in the United States. 
C) the Okun Gap is larger in the United States. 
D) income taxes are higher in the United States. 
E) equilibrium employment is higher in Europe. 
A) U.S.labor is more productive than European labor. 
B) prices are higher in the United States. 
C) the Okun Gap is larger in the United States. 
D) income taxes are higher in the United States. 
E) equilibrium employment is higher in Europe.

Question 12

What does a productivity curve reflect? What leads to movements along a productivity curve and what leads to shifts in a productivity curve?

Accepted Answer

The productivity curve shows the relatio

Question 13

The Classical macroeconomic model proposes that

Accepted Answer

A) government intervention is required to help the economy reach its potential. 
B) real GDP equals potential GDP as long as inflation equals zero. 
C) changes in the quantity of money are critical in driving economic growth. 
D) markets work efficiently to produce the best macroeconomic outcomes. 
E) socialism produces the most efficient economic outcomes for a society. 
A) government intervention is required to help the economy reach its potential. 
B) real GDP equals potential GDP as long as inflation equals zero. 
C) changes in the quantity of money are critical in driving economic growth. 
D) markets work efficiently to produce the best macroeconomic outcomes. 
E) socialism produces the most efficient economic outcomes for a society.

Question 14

Potential GDP

Accepted Answer

A) is the same as real GDP. 
B) is the same as nominal GDP. 
C) is another name for the Lucas Wedge. 
D) is the level of output produced when the economy is fully employed. 
E) shows that the Okun Gap vastly exceeds the Lucas Wedge. 
A) is the same as real GDP. 
B) is the same as nominal GDP. 
C) is another name for the Lucas Wedge. 
D) is the level of output produced when the economy is fully employed. 
E) shows that the Okun Gap vastly exceeds the Lucas Wedge.

Question 15

Hershey Chocolate Factory pays a money wage rate equal to $30 per hour and sells its candy bars for $1.50 each.Hershey Chocolate Factory should hire labor until an additional unit of labor produces ________ candy bars an hour.

Accepted Answer

A) 45 
B) 1.5 
C) 20 
D) 30 
E) 10 
A) 45 
B) 1.5 
C) 20 
D) 30 
E) 10

Question 16

East Asian economies have grown

Accepted Answer

A) rapidly because of high saving rates. 
B) rapidly despite a lack of property rights. 
C) slowly because of a lack of property rights. 
D) slowly because of low saving rates. 
E) rapidly because they virtually eliminated international trade. 
A) rapidly because of high saving rates. 
B) rapidly despite a lack of property rights. 
C) slowly because of a lack of property rights. 
D) slowly because of low saving rates. 
E) rapidly because they virtually eliminated international trade.

Question 17

The level of real GDP the economy produces at full employment is

Accepted Answer

A) nominal GDP. 
B) potential GDP. 
C) never reached in reality. 
D) called the Lucas level. 
E) real GDP. 
A) nominal GDP. 
B) potential GDP. 
C) never reached in reality. 
D) called the Lucas level. 
E) real GDP.

Question 18

Households increase the quantity of labor supplied when the

Accepted Answer

A) real wage rate rises because the opportunity cost of not working falls. 
B) nominal wage rate rises because the real wage rate must also rise. 
C) real wage rate rises because the opportunity cost of not working rises. 
D) nominal wage rate falls because the opportunity cost of not working rises. 
E) income tax rises because an increase in the income tax increases the demand for labor. 
A) real wage rate rises because the opportunity cost of not working falls. 
B) nominal wage rate rises because the real wage rate must also rise. 
C) real wage rate rises because the opportunity cost of not working rises. 
D) nominal wage rate falls because the opportunity cost of not working rises. 
E) income tax rises because an increase in the income tax increases the demand for labor.

Question 19

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20.Then the firm's real wage is

Accepted Answer

A) $20. 
B) $80. 
C) $5. 
D) $0.20. 
E) $4. 
A) $20. 
B) $80. 
C) $5. 
D) $0.20. 
E) $4.

Question 20

If Country A's real GDP grows at a rate of 14 percent per year,about how many years will it take for Country A's real GDP to double?

Accepted Answer

A) 10 
B) 7 
C) 5 
D) 30 
E) 14 
A) 10 
B) 7 
C) 5 
D) 30 
E) 14

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

-The table above shows the labor demand and labor supply schedules for a nation.The equilibrium real wage rate is and the equilibrium quantity of labor is billions of hours per year.

Last year,in a nation far to the South,real GDP was $90 million and 900,000 workers were employed.This year real GDP is $100 million,950,000 workers are employed,and the number of hours each worker works per year did not change.Hence,labor productivity

In growth theory,the change in a country's standard of living is measured by the change in

A firm hires labor up to the point where the

Labor productivity is equal to the quantity of

Which of the following ideas reflect the Monetarist macroeconomic model? I.The Monetarist model supports the Classical model,in general. Ii.Decreases in the growth rate of the quantity of money trigger recessions. Iii.Government intervention is an appropriate tool to steady the economy.

One possible way of achieving faster economic growth is to

For a household,the opportunity cost of not working is the

The gap in GDP between the United States and Europe can be explained by the fact that

What does a productivity curve reflect? What leads to movements along a productivity curve and what leads to shifts in a productivity curve?

The Classical macroeconomic model proposes that

Potential GDP

Hershey Chocolate Factory pays a money wage rate equal to $30 per hour and sells its candy bars for $1.50 each.Hershey Chocolate Factory should hire labor until an additional unit of labor produces ________ candy bars an hour.

East Asian economies have grown

The level of real GDP the economy produces at full employment is

Households increase the quantity of labor supplied when the

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20.Then the firm's real wage is

If Country A's real GDP grows at a rate of 14 percent per year,about how many years will it take for Country A's real GDP to double?

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 above figure shows a nation's production function.Point B is

-The table above shows the labor demand and labor supply schedules for a nation.The equilibrium real wage rate is ________ and the equilibrium quantity of labor is ________ billions of hours per year.

Last year,in a nation far to the South,real GDP was $90 million and 900,000 workers were employed.This year real GDP is $100 million,950,000 workers are employed,and the number of hours each worker works per year did not change.Hence,labor productivity

In growth theory,the change in a country's standard of living is measured by the change in

A firm hires labor up to the point where the

Labor productivity is equal to the quantity of

Which of the following ideas reflect the Monetarist macroeconomic model? I.The Monetarist model supports the Classical model,in general. Ii.Decreases in the growth rate of the quantity of money trigger recessions. Iii.Government intervention is an appropriate tool to steady the economy.

One possible way of achieving faster economic growth is to

For a household,the opportunity cost of not working is the

The gap in GDP between the United States and Europe can be explained by the fact that

What does a productivity curve reflect? What leads to movements along a productivity curve and what leads to shifts in a productivity curve?

The Classical macroeconomic model proposes that

Potential GDP

Hershey Chocolate Factory pays a money wage rate equal to $30 per hour and sells its candy bars for $1.50 each.Hershey Chocolate Factory should hire labor until an additional unit of labor produces ________ candy bars an hour.

East Asian economies have grown

The level of real GDP the economy produces at full employment is

Households increase the quantity of labor supplied when the

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20.Then the firm's real wage is

If Country A's real GDP grows at a rate of 14 percent per year,about how many years will it take for Country A's real GDP to double?

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 table above shows the labor demand and labor supply schedules for a nation.The equilibrium real wage rate is and the equilibrium quantity of labor is billions of hours per year.