Question 1

The quantity of labor demanded is the labor hours all

Accepted Answer

A) firms plan to hire at a given real wage rate. 
B) firms plan to hire at a given nominal wage rate. 
C) employees plan to work at a given real wage rate. 
D) employees plan to work at a given nominal wage rate. 
E) Both answers A and C are correct. 
A) firms plan to hire at a given real wage rate. 
B) firms plan to hire at a given nominal wage rate. 
C) employees plan to work at a given real wage rate. 
D) employees plan to work at a given nominal wage rate. 
E) Both answers A and C are correct.

Question 2

Economic freedom is a precondition for economic growth.Which of the following is a characteristic of economic freedom?
I.A democratic form of government
Ii.Property rights must be protected.
Iii.The government must support and pay for inventions and innovations.

Accepted Answer

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

Question 3

What is the law of diminishing returns? Give an example of what the law of diminishing returns implies.

Accepted Answer

The law of diminishing returns is the ob

Question 4

The shape of the productivity curve reflects the

Accepted Answer

A) effects of capital accumulation. 
B) effects of technological progress. 
C) change in labor productivity as human capital increases. 
D) law of diminishing marginal returns. 
E) effects of population growth. 
A) effects of capital accumulation. 
B) effects of technological progress. 
C) change in labor productivity as human capital increases. 
D) law of diminishing marginal returns. 
E) effects of population growth.

Question 5

As additional units of labor hours are employed,holding all other factors constant,along the production function,

Accepted Answer

A) real GDP increases at an increasing rate. 
B) nominal GDP decreases at an increasing rate. 
C) real GDP increases at a decreasing rate. 
D) real GDP increase at a constant rate. 
E) real GDP initially decreases and then starts to increase. 
A) real GDP increases at an increasing rate. 
B) nominal GDP decreases at an increasing rate. 
C) real GDP increases at a decreasing rate. 
D) real GDP increase at a constant rate. 
E) real GDP initially decreases and then starts to increase.

Question 6

Potential GDP

Accepted Answer

A) is the quantity of GDP produced when the economy is at full employment of all resources. 
B) can never be exceeded. 
C) can never be attained. 
D) is another name for real GDP. 
E) is another name for nominal GDP. 
A) is the quantity of GDP produced when the economy is at full employment of all resources. 
B) can never be exceeded. 
C) can never be attained. 
D) is another name for real GDP. 
E) is another name for nominal GDP.

Question 7

As more labor is hired,moving along the production function,diminishing returns occur because

Accepted Answer

A) workers are overworked and so their productivity decreases. 
B) the wage rate paid is too low and so workers decrease their work effort. 
C) there are fixed quantities of other resources. 
D) the real wage rate must increase in order to hire additional workers. 
E) real GDP increases more rapidly the more workers are hired. 
A) workers are overworked and so their productivity decreases. 
B) the wage rate paid is too low and so workers decrease their work effort. 
C) there are fixed quantities of other resources. 
D) the real wage rate must increase in order to hire additional workers. 
E) real GDP increases more rapidly the more workers are hired.

Question 8

-Using the data in the table above,real GDP per person in 2009 is

Accepted Answer

A) $70,000. 
B) $71,429. 
C) $75,000. 
D) $70 trillion. 
E) 7 percent. 
A) $70,000. 
B) $71,429. 
C) $75,000. 
D) $70 trillion. 
E) 7 percent.

Question 9

If a country experiences a real GDP growth rate of 6 percent,real GDP will double in

Accepted Answer

A) 10 years. 
B) 11.67 years. 
C) 14 years. 
D) 17.5 years. 
E) 16.67 years. 
A) 10 years. 
B) 11.67 years. 
C) 14 years. 
D) 17.5 years. 
E) 16.67 years.

Question 10

Labor productivity increases if
I.human capital decreases.
Ii.technology advances.
Iii.quality of education decreases.

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 11

Property rights

Accepted Answer

A) don't include intellectual property. 
B) don't include financial property. 
C) don't include physical property. 
D) include physical,financial,and intellectual property. 
E) slow the economic growth by placing limits on who can use what. 
A) don't include intellectual property. 
B) don't include financial property. 
C) don't include physical property. 
D) include physical,financial,and intellectual property. 
E) slow the economic growth by placing limits on who can use what.

Question 12

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

Accepted Answer

A) attainable if the economy is inefficient. 
B) unattainable given the state of the economy. 
C) attainable if the nation uses resources efficiently. 
D) the maximum amount of real GDP the nation can produce. 
E) the labor market equilibrium quantity of employment and real GDP. 
A) attainable if the economy is inefficient. 
B) unattainable given the state of the economy. 
C) attainable if the nation uses resources efficiently. 
D) the maximum amount of real GDP the nation can produce. 
E) the labor market equilibrium quantity of employment and real GDP.

Question 13

If real GDP in year 1 is $72 million and real GDP in year 2 is $87 million,then the growth rate of real GDP is

Accepted Answer

A) 15 percent. 
B) $15 million. 
C) 20.8 percent. 
D) 17 percent. 
E) 83 percent. 
A) 15 percent. 
B) $15 million. 
C) 20.8 percent. 
D) 17 percent. 
E) 83 percent.

Question 14

Over the last decade,a country experiences a significant increase in labor productivity.
a.Draw and label a labor market supply and demand diagram.Show how the equilibrium real wage rate and the equilibrium quantity of labor change as productivity increases.
b.Draw and label a production function.Show how potential GDP changes as labor productivity increases.

Accepted Answer

@#IMG-DLM& a.The figure above shows the effect of

Question 15

Which of the following is NOT a necessary precondition for economic growth?

Accepted Answer

A) economic freedom 
B) democracy 
C) property rights 
D) free markets 
E) ALL of the above are necessary preconditions. 
A) economic freedom 
B) democracy 
C) property rights 
D) free markets 
E) ALL of the above are necessary preconditions.

Question 16

Real GDP per person averaged $150 a year (in 2009 dollars)from 1,000,000 BC until 1620.During this time there was a period when it rose to ________ around ________ because ________.

Accepted Answer

A) $210;1620;the Pilgrim Fathers began to arrive in the Americas 
B) $210;1492;Columbus sailed to the Americas 
C) $140;400 BC;the Roman Empire collapsed 
D) $190;500 BC;of the gains from human capital while Aristotle and Plato were teaching in Athens 
E) a 1-million year high;the 1340s;the Black Death gripped Europe 
A) $210;1620;the Pilgrim Fathers began to arrive in the Americas 
B) $210;1492;Columbus sailed to the Americas 
C) $140;400 BC;the Roman Empire collapsed 
D) $190;500 BC;of the gains from human capital while Aristotle and Plato were teaching in Athens 
E) a 1-million year high;the 1340s;the Black Death gripped Europe

Question 17

When all other influences on work plans remain the same,the

Accepted Answer

A) lower the real wage rate,the smaller the quantity of labor supplied. 
B) higher the real wage rate,the greater the quantity of labor demanded. 
C) lower the real wage rate,the greater the quantity of labor supplied. 
D) lower the real wage rate,the smaller the quantity of labor demanded. 
E) lower the real wage rate,the larger the labor force participation. 
A) lower the real wage rate,the smaller the quantity of labor supplied. 
B) higher the real wage rate,the greater the quantity of labor demanded. 
C) lower the real wage rate,the greater the quantity of labor supplied. 
D) lower the real wage rate,the smaller the quantity of labor demanded. 
E) lower the real wage rate,the larger the labor force participation.

Question 18

Belgium's real GDP per person is $33,000 and Austria's is $34,700.The population growth rate in Belgium is 0.13 percent and the growth rate of real GDP is 3.0 percent.The population growth rate in Austria is 0.08 percent and the growth rate of real GDP is 3.3 percent.If these growth rates continue,how many years will it take for Belgium's real GDP per person to equal Austria's real GDP per person?

Accepted Answer

A) Belgium's standard of living will never equal Austria's. 
B) just over 23 years 
C) just over 24 years 
D) just over 21 years 
E) over 230 years 
A) Belgium's standard of living will never equal Austria's. 
B) just over 23 years 
C) just over 24 years 
D) just over 21 years 
E) over 230 years

Question 19

If adding an initial 100 billion labor hours per year increases real GDP by $3 trillion,diminishing returns informs us that an additional 100 billion labor hours per year will increase real GDP by

Accepted Answer

A) exactly $3 trillion. 
B) less than $3 trillion. 
C) more than $3 trillion. 
D) either exactly $3 trillion or by less than $3 trillion,depending on whether the real wage rate remains constant or rises. 
E) some amount but there is not enough information to tell by how much. 
A) exactly $3 trillion. 
B) less than $3 trillion. 
C) more than $3 trillion. 
D) either exactly $3 trillion or by less than $3 trillion,depending on whether the real wage rate remains constant or rises. 
E) some amount but there is not enough information to tell by how much.

Question 20

For the world,what period of time experienced the fastest growth rate of real GDP per person?

Accepted Answer

A) around 500 B.C. 
B) around 400 A.D. 
C) between 1000 A.D.and 1500 A.D. 
D) after about 1850 A.D. 
E) between 1500 A.D.and 1850 A.D. 
A) around 500 B.C. 
B) around 400 A.D. 
C) between 1000 A.D.and 1500 A.D. 
D) after about 1850 A.D. 
E) between 1500 A.D.and 1850 A.D.

The quantity of labor demanded is the labor hours all

Economic freedom is a precondition for economic growth.Which of the following is a characteristic of economic freedom? I.A democratic form of government Ii.Property rights must be protected. Iii.The government must support and pay for inventions and innovations.

What is the law of diminishing returns? Give an example of what the law of diminishing returns implies.

The shape of the productivity curve reflects the

As additional units of labor hours are employed,holding all other factors constant,along the production function,

Potential GDP

As more labor is hired,moving along the production function,diminishing returns occur because

-Using the data in the table above,real GDP per person in 2009 is

If a country experiences a real GDP growth rate of 6 percent,real GDP will double in

Labor productivity increases if I.human capital decreases. Ii.technology advances. Iii.quality of education decreases.

Property rights

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

If real GDP in year 1 is $72 million and real GDP in year 2 is $87 million,then the growth rate of real GDP is

Which of the following is NOT a necessary precondition for economic growth?

Real GDP per person averaged $150 a year (in 2009 dollars)from 1,000,000 BC until 1620.During this time there was a period when it rose to around because .

When all other influences on work plans remain the same,the

If adding an initial 100 billion labor hours per year increases real GDP by $3 trillion,diminishing returns informs us that an additional 100 billion labor hours per year will increase real GDP by

For the world,what period of time experienced the fastest growth rate of real GDP per person?

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 quantity of labor demanded is the labor hours all

Economic freedom is a precondition for economic growth.Which of the following is a characteristic of economic freedom? I.A democratic form of government Ii.Property rights must be protected. Iii.The government must support and pay for inventions and innovations.

What is the law of diminishing returns? Give an example of what the law of diminishing returns implies.

The shape of the productivity curve reflects the

As additional units of labor hours are employed,holding all other factors constant,along the production function,

Potential GDP

As more labor is hired,moving along the production function,diminishing returns occur because

-Using the data in the table above,real GDP per person in 2009 is

If a country experiences a real GDP growth rate of 6 percent,real GDP will double in

Labor productivity increases if I.human capital decreases. Ii.technology advances. Iii.quality of education decreases.

Property rights

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

If real GDP in year 1 is $72 million and real GDP in year 2 is $87 million,then the growth rate of real GDP is

Which of the following is NOT a necessary precondition for economic growth?

Real GDP per person averaged $150 a year (in 2009 dollars)from 1,000,000 BC until 1620.During this time there was a period when it rose to ________ around ________ because ________.

When all other influences on work plans remain the same,the

If adding an initial 100 billion labor hours per year increases real GDP by $3 trillion,diminishing returns informs us that an additional 100 billion labor hours per year will increase real GDP by

For the world,what period of time experienced the fastest growth rate of real GDP per person?

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.During this time there was a period when it rose to around because .