Question 1

The production function describes the relationship between

Accepted Answer

A) the real wage and the quantity of labor supplied. 
B) real GDP and the quantity of labor employed. 
C) real and potential GDP. 
D) real and nominal GDP. 
E) potential GDP and the real wage rate. 
A) the real wage and the quantity of labor supplied. 
B) real GDP and the quantity of labor employed. 
C) real and potential GDP. 
D) real and nominal GDP. 
E) potential GDP and the real wage rate.

Question 2

One possible way of achieving faster economic growth is to

Accepted Answer

A) abolish the system of patents and copyrights so that everyone can use people's ideas. 
B) limit international trade to only a few countries so that the nation is not hurt by too much trade. 
C) encourage research and development. 
D) limit schooling in order to have more people in the labor force,producing goods and services. 
E) promote tax saving so that people spend more and businesses' profits are larger. 
A) abolish the system of patents and copyrights so that everyone can use people's ideas. 
B) limit international trade to only a few countries so that the nation is not hurt by too much trade. 
C) encourage research and development. 
D) limit schooling in order to have more people in the labor force,producing goods and services. 
E) promote tax saving so that people spend more and businesses' profits are larger.

Question 3

Compared to the U.S.production function,the European production function is

Accepted Answer

A) higher. 
B) lower. 
C) the same. 
D) lower than the U.S.production function at low levels of employment and higher than the U.S.production function at high levels of employment. 
E) higher than the U.S.production function at low levels of employment and lower than the U.S.production function at high levels of employment. 
A) higher. 
B) lower. 
C) the same. 
D) lower than the U.S.production function at low levels of employment and higher than the U.S.production function at high levels of employment. 
E) higher than the U.S.production function at low levels of employment and lower than the U.S.production function at high levels of employment.

Question 4

Labor productivity equals

Accepted Answer

A) real GDP. 
B) real GDP per hour of labor. 
C) the total production of labor. 
D) the quantity of labor hours divided by real GDP. 
E) real GDP divided by the amount of human capital. 
A) real GDP. 
B) real GDP per hour of labor. 
C) the total production of labor. 
D) the quantity of labor hours divided by real GDP. 
E) real GDP divided by the amount of human capital.

Question 5

What is the effect on real GDP per person if labor productivity increases? What is the effect on the nation's standard of living?

Accepted Answer

Real GDP equals (aggregate hours)× (labo

Question 6

-The figure above shows the U.S.supply of labor curve.If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level,there will be a

Accepted Answer

A) rightward shift of the supply of labor curve. 
B) leftward shift of the supply of labor curve. 
C) movement downward along the supply of labor curve from a point such as A to a point such as B. 
D) movement upward along the supply of labor curve from a point such as C to a point such as B. 
E) None of the above answers is correct because there is no change in the supply of labor curve. 
A) rightward shift of the supply of labor curve. 
B) leftward shift of the supply of labor curve. 
C) movement downward along the supply of labor curve from a point such as A to a point such as B. 
D) movement upward along the supply of labor curve from a point such as C to a point such as B. 
E) None of the above answers is correct because there is no change in the supply of labor curve.

Question 7

Labor productivity growth depends on
I.saving and investment.
Ii.increases in human capital.
Iii.technological growth.

Accepted Answer

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

Question 8

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

Accepted Answer

A) attainable;inefficient;the nation is using resources inefficiently 
B) attainable;efficient;the nation is using resources efficiently 
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;inefficient;the nation is using resources inefficiently 
B) attainable;efficient;the nation is using resources efficiently 
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

Question 9

As the quantity of labor employed increases,the production functions exhibits a

Accepted Answer

A) positive,linear relationship. 
B) positive relationship,with each additional unit of labor producing less additional real GDP. 
C) positive relationship,with each additional unit of labor producing more additional real GDP. 
D) negative,linear relationship. 
E) U-shaped curve. 
A) positive,linear relationship. 
B) positive relationship,with each additional unit of labor producing less additional real GDP. 
C) positive relationship,with each additional unit of labor producing more additional real GDP. 
D) negative,linear relationship. 
E) U-shaped curve.

Question 10

-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? If you cannot determine a precise amount,give the range in which potential GDP must lie.

Accepted Answer

a.The equilibrium real wage rate is $15

Question 11

If real GDP increases by 6 percent and at the same time the population increases by 2 percent,then real GDP per person grows by

Accepted Answer

A) 6 percent. 
B) 4 percent. 
C) 2 percent. 
D) 8 percent. 
E) 3 percent. 
A) 6 percent. 
B) 4 percent. 
C) 2 percent. 
D) 8 percent. 
E) 3 percent.

Question 12

Growth in physical capital depends most directly upon the

Accepted Answer

A) amount of saving and investment. 
B) number of firms in the nation. 
C) speed of population growth. 
D) amount of government expenditures. 
E) level of human capital. 
A) amount of saving and investment. 
B) number of firms in the nation. 
C) speed of population growth. 
D) amount of government expenditures. 
E) level of human capital.

Question 13

A basic precondition necessary to achieve economic growth is

Accepted Answer

A) well-functioning factories. 
B) well-being of society. 
C) a well-functioning legal system. 
D) a well-organized work force. 
E) a strong central government that directs the nation's research and development activities. 
A) well-functioning factories. 
B) well-being of society. 
C) a well-functioning legal system. 
D) a well-organized work force. 
E) a strong central government that directs the nation's research and development activities.

Question 14

Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP.If 50 billion more hours are employed and Australia's real GDP increases by $4 trillion more,

Accepted Answer

A) Australia's production function exhibits diminishing returns. 
B) Australia's production function exhibits increasing returns. 
C) Australia has an Okun Wedge of $1 trillion. 
D) Australia has positive Lucas Wedge. 
E) Australia's production possibility frontier has a positive slope. 
A) Australia's production function exhibits diminishing returns. 
B) Australia's production function exhibits increasing returns. 
C) Australia has an Okun Wedge of $1 trillion. 
D) Australia has positive Lucas Wedge. 
E) Australia's production possibility frontier has a positive slope.

Question 15

Many economists argue that an incentive to save is

Accepted Answer

A) high income tax rates. 
B) a tax on consumption rather than on income. 
C) a tax on income rather than a tax on consumption. 
D) greater government regulation of the banking and securities industries. 
E) strengthening the property rights that savers have to the physical capital they purchase. 
A) high income tax rates. 
B) a tax on consumption rather than on income. 
C) a tax on income rather than a tax on consumption. 
D) greater government regulation of the banking and securities industries. 
E) strengthening the property rights that savers have to the physical capital they purchase.

Question 16

List and explain the three factors that can increase labor productivity.

Accepted Answer

The three factors that can increase labo

Question 17

In this year,Country A has a real GDP per person that is 4 times greater than that of Country B.Country B's growth rate of real GDP per person is 3.5 percent per year.How many years will it take for Country B's real GDP per person to reach the same level that Country A had in this year?

Accepted Answer

A) 10 years 
B) 20 years 
C) 40 years 
D) 60 years 
E) 56 years 
A) 10 years 
B) 20 years 
C) 40 years 
D) 60 years 
E) 56 years

Question 18

Over the business cycle,real GDP fluctuates around

Accepted Answer

A) the business cycle trough. 
B) the business cycle peak. 
C) nominal GDP. 
D) potential GDP. 
E) the Lucas Wedge. 
A) the business cycle trough. 
B) the business cycle peak. 
C) nominal GDP. 
D) potential GDP. 
E) the Lucas Wedge.

Question 19

What policies can a government undertake to achieve faster economic growth?

Accepted Answer

There are several policies a government

Question 20

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours.What does labor productivity equal?

Accepted Answer

Labor productivity is defined

The production function describes the relationship between

One possible way of achieving faster economic growth is to

Compared to the U.S.production function,the European production function is

Labor productivity equals

What is the effect on real GDP per person if labor productivity increases? What is the effect on the nation's standard of living?

-The figure above shows the U.S.supply of labor curve.If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level,there will be a

Labor productivity growth depends on I.saving and investment. Ii.increases in human capital. Iii.technological growth.

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

As the quantity of labor employed increases,the production functions exhibits a

If real GDP increases by 6 percent and at the same time the population increases by 2 percent,then real GDP per person grows by

Growth in physical capital depends most directly upon the

A basic precondition necessary to achieve economic growth is

Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP.If 50 billion more hours are employed and Australia's real GDP increases by $4 trillion more,

Many economists argue that an incentive to save is

List and explain the three factors that can increase labor productivity.

In this year,Country A has a real GDP per person that is 4 times greater than that of Country B.Country B's growth rate of real GDP per person is 3.5 percent per year.How many years will it take for Country B's real GDP per person to reach the same level that Country A had in this year?

Over the business cycle,real GDP fluctuates around

What policies can a government undertake to achieve faster economic growth?

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours.What does labor productivity equal?

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 production function describes the relationship between

One possible way of achieving faster economic growth is to

Compared to the U.S.production function,the European production function is

Labor productivity equals

What is the effect on real GDP per person if labor productivity increases? What is the effect on the nation's standard of living?

-The figure above shows the U.S.supply of labor curve.If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level,there will be a

Labor productivity growth depends on I.saving and investment. Ii.increases in human capital. Iii.technological growth.

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

As the quantity of labor employed increases,the production functions exhibits a

If real GDP increases by 6 percent and at the same time the population increases by 2 percent,then real GDP per person grows by

Growth in physical capital depends most directly upon the

A basic precondition necessary to achieve economic growth is

Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP.If 50 billion more hours are employed and Australia's real GDP increases by $4 trillion more,

Many economists argue that an incentive to save is

List and explain the three factors that can increase labor productivity.

In this year,Country A has a real GDP per person that is 4 times greater than that of Country B.Country B's growth rate of real GDP per person is 3.5 percent per year.How many years will it take for Country B's real GDP per person to reach the same level that Country A had in this year?

Over the business cycle,real GDP fluctuates around

What policies can a government undertake to achieve faster economic growth?

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours.What does labor productivity equal?

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 above figure shows a nation's production function.Point C is and because .