econ test #3 chapter 6 pt. II

An increase in a nation's population results in

a movement along the nation's production function

Saving and investment that increase a nation's capital lead to

an increase in labor productivity.

An increase in labor productivity shifts the labor ________ curve ________.

demand; rightward

The relationship between education and economic growth can best be summarized by saying that

education has benefits beyond those who receive the education, which encourages economic growth.

A worker's stock of knowledge is known as

human capital.

An increase in saving that leads to more capital accumulation ________ labor productivity.

increases

Labor productivity increases with

increases in capital

Technological change

increases potential GDP.

If the saving rate increases, a country's growth rate of real GDP per hour of labor ________ and capital per hour of labor ________

increases; increases

The demand for labor curve

is downward sloping because productivity of labor diminishes as more workers are employed

Which of the following is TRUE regarding the real wage rate? The real wage rate

measures the quantity of goods and services an hour's work can buy

The country of Kemper is on its aggregate production function at point W in the above figure. If the population increases with no change in capital or technology, the economy will

move to point such as X.

If the price level rises by 3 percent and workers' money wages increase by 3 percent, then the

quantity of labor demanded does not change because there is no change in the real wage rate

Human capital is the

skill and knowledge accumulated by humans

Most ________ is embodied in physical capital.

technological change

The Industrial Revolution in England in large was the result of

technological innovations encouraged by the patent system.

Classical growth theory proposes that real GDP growth is ________ and that real GDP per person will ________ the subsistence level.

temporary; temporarily be above

The notion that technological change is not random but instead is driven by the pursuit of profits is an essential element of

the new growth theory.

If the real wage rate is such that the quantity of labor supplied by workers is less than the quantity of labor demanded by firms

there is a shortage of labor

The tables above show the labor market and the production function schedule for the country of Pickett. Potential GDP is ________

$14 trillion

Labor productivity, real GDP per labor hour, increases if

All of the above answers are correct.

If this quote is TRUE, what would the neoclassical growth theory predict?

Economic growth stops because most technological advances have already been made

Which of the following statements regarding human capital is INCORRECT?

Education is the only vehicle for the creation of human capital because training simply reinforces what has already been learned

________ is the knowledge and skill that people have obtained from education and on-the-job training

Human capital

If the price level increases, but workers' money wage rates remain constant,which of the following is TRUE

I and II

Which of the following statements are TRUE regarding the demand for labor

I and II

Which of the following is associated with classical growth theory

III: Population explosions bring real GDP per person back to subsistence levels.