Question 1

If capital per hour of labor increases, real GDP per hour of labor

Accepted Answer

A)   decreases for a given level of technology.
B)   increases because the level of technology increases.
C)   increases for a given level of technology.
D)   decreases because the level of technology decreases.E) C) and D)
F) A) and C)

Question 2

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

Accepted Answer

A)   investment in new capital
B)   resource conservation
C)   investment in human capital
D)   discoveries of new technologyE) B) and C)
F) A) and D)

Question 3

If a nation's population grows, then

Accepted Answer

A)   growth in real GDP per person will be less than the growth of real GDP.
B)   there can be no economic growth.
C)   growth in real GDP per person will be greater than the growth of real GDP.
D)   there must be an increase in real GDP per person.E) A) and C)
F) A) and B)

Question 4

An increase in labor productivity relates to

Accepted Answer

A)   working harder over time.
B)   working longer over time.
C)   producing the same output with fewer labor hours.
D)   producing the same output with more labor hours.E) All of the above
F) B) and C)

Question 5

Faster long-term growth can be achieved by discouraging saving and encouraging consumption.

Accepted Answer

A) True 
 B)False

Question 6

Savings is an important factor influencing economic growth because saving

Accepted Answer

A)   can finance new investment and capital formation.
B)   helps the economy maintain the current level of total expenditures when a recession begins.
C)   provides a fund for wages needed from any unexpected population growth.
D)   All of the above answers are correct.E) None of the above
F) A) and B)

Question 7

A recent article states that "...gains from two centuries of rapid technological innovation are largely exhausted, and new discoveries lack the same revolutionary quality....{Further}, 80 percent of the growth between 1950 and 1993 came from the new application of old ideas, and these old ideas are now mostly wrung dry."
(The Economist, 03/03/2011) 
-The neoclassical growth theory says, in part, that

Accepted Answer

A)   a population explosion driven by economic growth will end economic growth.
B)   technological change leads to economic growth.
C)   the differences in nation's growth rates will persist indefinitely.
D)   technology does not play a role in economic growth.E) A) and B)
F) B) and C)

Question 8

The supply of labor curve

Accepted Answer

A)   has a negative slope.
B)   is independent of the wage rate.
C)   shows how much labor workers are willing to supply at various real wage rates.
D)   is usually vertical.E) A) and B)
F) A) and C)

Question 9

Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is

Accepted Answer

A)   $1,000.
B)   positive.
C)   negative.
D)   zero.E) A) and D)
F) A) and C)

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 are the equilibrium real wage rate and the level of employment?
b) What is potential GDP?

Accepted Answer

a) The equilibrium real wage rate is $15...

Question 11

A worker's stock of knowledge is known as

Accepted Answer

A)   monetary capital.
B)   human capital.
C)   physical capital.
D)   financial capital.E) None of the above
F) B) and D)

Question 12

At the full-employment equilibrium in the labor market

Accepted Answer

A)   there is no unemployment.
B)   there are no job vacancies.
C)   there is neither a shortage nor a surplus of labor.
D)   the money wage rate equals the real wage rate.E) A) and B)
F) None of the above

Question 13

An increase in labor productivity ________ the real wage rate and an increase in population ________ the real wage rate.

Accepted Answer

A)   raises; lowers
B)   raises; raises
C)   lowers; lowers
D)   lowers; raisesE) A) and B)
F) A) and C)

Question 14

If workers' money wage rates increase by 5 percent and the price level remains constant, workers'

Accepted Answer

A)   quantity of labor supplied will decrease.
B)   quantity of labor supplied will increase.
C)   quantity of labor supplied will not change.
D)   demand for jobs will decrease.E) A) and B)
F) A) and C)

Question 15

An increase in labor productivity shifts the

Accepted Answer

A)   labor demand curve rightward.
B)   labor demand curve leftward.
C)   labor supply curve rightward.
D)   labor supply curve leftward.E) C) and D)
F) None of the above

Question 16

New growth theory proposes that real GDP per person grows because of ________ and that growth ________.

Accepted Answer

A)   the pursuit of profit; can persist indefinitely
B)   productivity shocks; can persist indefinitely
C)   technological change; can only increase above the subsistence level temporarily
D)   productivity shocks; occurs randomlyE) A) and B)
F) A) and C)

Question 17

In 2016, of the following which nations had the highest level of real GDP per person?

Accepted Answer

A)   Japan
B)   Europe Big 4
C)   Canada
D)   ChinaE) B) and C)
F) None of the above

Question 18

Workers who pursue an education directly increase their

Accepted Answer

A)   financial capital.
B)   physical capital.
C)   human capital.
D)   saving.E) A) and D)
F) A) and C)

Question 19

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

Accepted Answer

A)   Population growth occurs, increasing the supply of labor.
B)   Population growth occurs, shifting the labor supply curve leftward.
C)   Growth is not possible so the demand for labor never changes.
D)   Investment in capital decreases labor demand, decreasing the demand for labor.E) All of the above
F) A) and B)

Question 20

New growth theory economists believe that:
I. Economic growth can continue as long as we keep finding new ideas.
II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

Accepted Answer

A)   I only
B)   II only
C)   both I and II
D)   neither I nor IIE) None of the above
F) All of the above

Exam 6: Economic Growth

If capital per hour of labor increases, real GDP per hour of labor

Correct Answer
verified

The supply of labor curve

Correct Answer
verified

New growth theory proposes that real GDP per person grows because of and that growth .

Correct Answer
verified

New growth theory economists believe that: I. Economic growth can continue as long as we keep finding new ideas. II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

Correct Answer
verified

Correct Answer
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An increase in labor productivity the real wage rate and an increase in population the real wage rate.

Correct Answer
verified

If workers' money wage rates increase by 5 percent and the price level remains constant, workers'

Correct Answer
verified

Workers who pursue an education directly increase their

Correct Answer
verified

Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is

Correct Answer
verified

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

Correct Answer
verified

At the full-employment equilibrium in the labor market

Correct Answer
verified

An increase in labor productivity shifts the

Correct Answer
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A worker's stock of knowledge is known as

Correct Answer
verified

If a nation's population grows, then

Correct Answer
verified

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

Correct Answer
verified

An increase in labor productivity relates to

Correct Answer
verified

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function. a) What are the equilibrium real wage rate and the level of employment? b) What is potential GDP?

Correct Answer
verified
a) The equilibrium real wage rate is $15...
View Answer

In 2016, of the following which nations had the highest level of real GDP per person?

Correct Answer
verified

Savings is an important factor influencing economic growth because saving

Correct Answer
verified

Faster long-term growth can be achieved by discouraging saving and encouraging consumption.

Correct Answer
verified

Exam 6: Economic Growth

If capital per hour of labor increases, real GDP per hour of labor

Correct AnswerverifiedShow Answer

The supply of labor curve

Correct AnswerverifiedShow Answer

New growth theory proposes that real GDP per person grows because of ________ and that growth ________.

Correct AnswerverifiedShow Answer

New growth theory economists believe that: I. Economic growth can continue as long as we keep finding new ideas. II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An increase in labor productivity ________ the real wage rate and an increase in population ________ the real wage rate.

Correct AnswerverifiedShow Answer

If workers' money wage rates increase by 5 percent and the price level remains constant, workers'

Correct AnswerverifiedShow Answer

Workers who pursue an education directly increase their

Correct AnswerverifiedShow Answer

Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is

Correct AnswerverifiedShow Answer

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

Correct AnswerverifiedShow Answer

At the full-employment equilibrium in the labor market

Correct AnswerverifiedShow Answer

An increase in labor productivity shifts the

Correct AnswerverifiedShow Answer

A worker's stock of knowledge is known as

Correct AnswerverifiedShow Answer

If a nation's population grows, then

Correct AnswerverifiedShow Answer

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

Correct AnswerverifiedShow Answer

An increase in labor productivity relates to

Correct AnswerverifiedShow Answer

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function. a) What are the equilibrium real wage rate and the level of employment? b) What is potential GDP?

Correct Answerverifieda) The equilibrium real wage rate is $15...View AnswerShow Answer

In 2016, of the following which nations had the highest level of real GDP per person?

Correct AnswerverifiedShow Answer

Savings is an important factor influencing economic growth because saving

Correct AnswerverifiedShow Answer

Faster long-term growth can be achieved by discouraging saving and encouraging consumption.

Correct AnswerverifiedShow Answer

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Correct Answer
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New growth theory proposes that real GDP per person grows because of and that growth .

Correct Answer
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An increase in labor productivity the real wage rate and an increase in population the real wage rate.

Correct Answer
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a) The equilibrium real wage rate is $15...
View Answer

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Correct Answer
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