Macroeconomics Chapter 6 Homework

According to new growth​ theory, the growth of real GDP per person​ _______. A. stops when technology stops advancing B. stops if old firms die and continues if new firms are born C. persists indefinitely D. decreases when workers take more leisure and increases when the average workweek increases

persists indefinitely

Once the preconditions for growth are in​ place, the influences on the pace of labour productivity growth are​ _______. A. human capital​ growth, population​ growth, and low inflation B. physical capital​ growth, human capital​ growth, and technological advances C. low​ inflation, low​ unemployment, and investment in physical capital D. physical capital​ growth, population​ growth, and human capital growth

physical capital​ growth, human capital​ growth, and technological advances

Between 1916 and​ 2016, the average growth rate of real GDP per person in the United States was 2 percent a year. Complete the sentence. During this​ period, ______ grew at a faster rate than​ ______. A. real​ GDP; the population B. ​GDP; the population C. ​inflation; real GDP D. the​ population; real GDP

real​ GDP; the population

The demand for labor is the relationship between the quantity of labor demanded and the​ ______. The supply of labor is the relationship between the quantity of labor supplied and the​ ______. A. nominal interest​ rate; nominal interest rate B. real interest​ rate; real interest rate C. money wage​ rate; money wage rate D. real wage​ rate; real wage rate

real wage​ rate; real wage rate

According to neoclassical growth​ theory, the growth of real GDP per person stops when​ _______. A. a population explosion eventually occurs and real GDP per person returns to the subsistence level B. technology stops advancing C. knowledge capital experiences diminishing marginal returns D. labor experiences diminishing marginal returns

technology stops advancing

The fundamental precondition for labor productivity growth is​ _______. A. education B. the incentive system created by​ firms, markets, property​ rights, and money This is the correct answer. C. a growing population D. controlled immigration

the incentive system created by firms, markets, property rights, and money

he two broad sources of potential GDP growth are growth of​ ______ and growth of​ ______. A. ​government; the private sector B. ​corporations; private firms C. the supply of​ labor; labor productivity D. ​exports; imports

the supply of​ labor; labor productivity

Among the​ G7, the country with the highest real GDP per person in 2016 is​ _______. A. the United States This is the correct answer. B. Japan C. the United Kingdom D. Canada

the united states

Potential GDP is determined by​ ______. A. the​ full-employment quantity of labor B. the supply of labor C. labor productivity D. the demand for labor

the​ full-employment quantity of labor

Choose the correct statement. A. Neoclassical growth theory is sometimes called Malthusian theory. B. Classical growth theory tells us that technological change induces a level of saving and investment that makes capital per hour of labor grow indefinitely. C. ​Modern-day Malthusians point to global warming and climate change as reasons to believe that eventually real GDP per person will decrease. This is the correct answer. D. Neoclassical growth theory is the view that the growth of real GDP per person is temporary and that when it rises above the subsistence​ level, a population explosion eventually brings it back to the subsistence level.

​Modern-day Malthusians point to global warming and climate change as reasons to believe that eventually real GDP per person will decrease.

The gap between real GDP per person in the United States and Hong Kong has​ ______ since 1980. During this​ period, the growth rate of real GDP per person in the United States has been​ ______ than in Hong Kong. A. ​decreased; faster B. remained​ constant; equal C. ​increased; faster D. ​decreased; slower

​decreased; slower

In 2018​ Brazil's real GDP is growing at 1.7 percent a year and its population is growing at 0.7 percent a year. If these growth rates​ continue, in what year will​ Brazil's real GDP per person be twice what it is in​ 2018? If these growth rates​ continue, Brazil's real GDP per person will be twice what it is in 2018 in​ _______. A. 2118 B. 2059 C. 2088 D. 2047

2088

Choose the correct statement. A. Real GDP grows at a smoother rate than potential GDP grows. B. A return to full employment in a business cycle expansion is shown as a movement from inside the PPF to a point on the PPF. C. The return to full employment in an expansion phase of the business cycle is economic growth. D. Economic growth is illustrated as a movement along the PPF

A return to full employment in a business cycle expansion is shown as a movement from inside the PPF to a point on the PPF.

Choose the correct statement. A. Beginning in​ 1760, technological advances transformed the economy of England in the Industrial Revolution. This is the correct answer. B. The presence of a banking system in Britain in the middle 1700s started the Industrial Revolution. C. ​England's patent system began with the Statue of Monopolies in 1760. D. The Industrial Revolution began in 1760 in what would later become the United States.

Beginning in​ 1760, technological advances transformed the economy of England in the Industrial Revolution.

Choose the correct statement. A. If there is a shortage of​ labor, the real wage rate falls to eliminate the shortage. B. Each additional hour of labor increases real GDP by successively smaller amounts. C. The quantity of labor demanded in the economy during a given period depends on the quantity of labor supplied. D. The nominal wage influences the quantity of labor supplied because what matters to households is not the number of dollars they earn but what they can buy with those dollars.

Each additional hour of labor increases real GDP by successively smaller amounts.

Choose the correct statement. A. The real wage rate is the number of dollars that an hour of labor earns B. The demand for labor is the relationship between the quantity of labor demanded and the money wage rate. C. If there is a shortage of​ labor, the real wage rate rises to eliminate the shortage. D. The real wage rate is the money wage rate multiplied by the price level.

If there is a shortage of​ labor, the real wage rate rises to eliminate the shortage.

Choose the correct statement. A. The real wage rate is the number of dollars that an hour of labor earns B. The real wage rate is the money wage rate multiplied by the price level. C. If there is a shortage of​ labor, the real wage rate rises to eliminate the shortage. This is the correct answer. D. The demand for labor is the relationship between the quantity of labor demanded and the money wage rate.

If there is a shortage of​ labor, the real wage rate rises to eliminate the shortage.

The IMF projects that​ China's real GDP per person will be​ 57,163 yuan in 2017 and​ 60,334 yuan in 2018 and that​ India's real GDP per person will be​ 98,028 rupees in 2017 and​ 104,191 rupees in 2018. By maintaining their current growth​ rates, which country will be first to double its standard of living and when will that​ happen? By maintaining their current growth​ rates, _______ will be the first to double its standard of​ living, and that will occur in​ _______. A. ​China; 12.7 B. ​India; 11.1 years C. ​India; 6.3 D. ​China; 5.5

India 11.1 years

Choose the correct statement. A. An increase in the quantity of labor and a corresponding decrease in leisure hours shifts the production function upward. B. Labor hours are not all equally productive. This is the correct answer. C. An increase in the quantity of labor and a corresponding decrease in leisure hours will have no effect on real GDP. D. The aggregate production function is the relationship that tells us how real GDP changes as the real wage rate​ changes, when all other influences on production remain the same.

Labor hours are not all equally productive.

Choose the correct statement. A. The largest contribution to labor productivity growth comes from human capital. B. Most technologies are embodied in physical capital. C. Growth in average hours per work increase labor productivity. D. The fundamental source of labor productivity growth is physical capital.

Most technologies are embodied in physical capital.

​______ sees the economy as a perpetual motion machine. A. New growth theory This is the correct answer. B. New population theory C. Neoclassical growth theory D. Classical growth theory

New growth theory

Choose the statements concerning neoclassical growth theory that are true. 1. Technological change results from chance.Technological change results from chance. 2. Economic growth will stop if technology stops advancing. 3. Technological change results from the choices people make in the pursuit of profit. 4. Neoclassical growth theory states that growth in real GDP per person can persist indefinitely. A. Statements 1 and 3 are correct. B. Statements 2 and 4 are correct. C. Statements 3 and 4 are correct. D. Statements 1 and 2 are correct.

Statements 1 and 2 are correct.

Choose the correct statement about an increase in the population. A. The real wage rate rises. B. Potential GDP per hour of labor decreases. This is the correct answer. C. Potential GDP decreases. D. The production function shifts upward.

Potential GDP per hour of labor decreases.

Choose the correct statement about growth in labor productivity. A. The real wage rate falls and the equilibrium quantity of labor increases. B. Potential GDP per hour of labor increases. This is the correct answer. C. Potential GDP remains unchanged. D. The demand for labor​ increases, the production function does not​ change, but a movement occurs along the production function.

Potential GDP per hour of labor increases.

Choose the correct statement. A. The return to full employment in an expansion phase of the business cycle is economic growth. B. The growth rate of potential GDP and the trend growth rate of real GDP have risen since 2000. C. The annual growth rate of real GDP fluctuates widely over the business cycle. This is the correct answer. D. The annual growth rate of real GDP provides information about changes in the trend growth rate.

The annual growth rate of real GDP fluctuates widely over the business cycle.

Choose the correct statement. A. South​ Africa's economic growth rate is 8 percent a year. B. The economic growth rate in South Africa is greater than the economic growth rate in Botswana. C. The economic growth rate in Botswana is greater than the economic growth rate in South Africa. D. The economic growth rates in South Africa and Botswana are equal.

The economic growth rate in Botswana is greater than the economic growth rate in South Africa.

The effect of the United States returning millions of workers to their countries of origin is​ _____ the U.S. PF and​ _____ in potential GDP. A. a movement down​ along; a decrease B. a movement down​ along; no change C. a downward shift​ of; no change D. a downward shift​ of; a decrease

a movement down​ along; a decrease

If the growth rates of 2015 are maintained in future​ years, real GDP per person in Europa will​ ______. A. double by 2027 B. never double unless the population stops growing C. double by 2024 D. double after 12

double by 2024

The effect of the United States returning millions of workers to their home countries is​ _____ Mexico's production function and​ _____ in potential GDP. A. an upward shift​ of; an increase B. a movement up​ along; an increase C. a movement up​ along; no change D. an upward shift​ of; no change

a movement up​ along; an increase

According to classical growth​ theory, the growth of real GDP per person stops when​ _______. A. a population explosion eventually occurs and real GDP per person returns to the subsistence level B. the population growth rate​ slows, and with no change in labor​ productivity, the growth rate of real GDP stops C. the opportunity cost of women in the labor force increases D. capital experiences diminishing marginal returns

a population explosion eventually occurs and real GDP per person returns to the subsistence level

During the 100 years from 1916 to​ 2016, what was the growth rate of real GDP per person in the United​ States? During the 100 years from 1916 to​ 2016, real GDP per person in the United States grew at​ ______. A. an average of 4 percent a year B. 3 percent a year in most decades C. an average of 2 percent a year This is the correct answer. D. 2.0 percent each decade

an average of 2 percent a year

An increase in labor productivity results in​ ______. A. a decrease in potential GDP per hour of labor because of diminishing returns B. an increase in the demand for labor C. no change in the equilibrium quantity of labor D. a movement along the production function

an increase in the demand for labor

An increase in labor productivity results in​ ______. A. a decrease in potential GDP per hour of labor because of diminishing returns B. an increase in the demand for labor This is the correct answer. C. a movement along the production function D. no change in the equilibrium quantity of labor

an increase in the demand for labor

The growth rate is the​ _____ of a variable​ - the change in the level expressed as a percentage of the initial level. A. annual percentage change B. increase or decrease C. daily percentage change D. change in the level

annual percentage change

Labor market equilibrium occurs​ _______. A. when there is zero unemployment B. at the nominal wage rate at which the quantity of labor demanded equals the quantity of labor supplied C. at the real wage rate at which the quantity of labor demanded equals the quantity of labor supplied D. when the demand for labor is maximized

at the real wage rate at which the quantity of labor demanded equals the quantity of labor supplied

What influences work hours​ growth? Work hours growth is influenced by​ _______. A. real GDP growth B. physical capital growth C. changes in labor productivity D. changes in average hours per worker

changes in average hours per worker

In new growth theory​ ______. A. discoveries result from choices B. the forces of competition destroy incentives to make new discoveries C. the pace of technological change influences the economic growth rate but economic growth does not influence the pace of technological change D. discoveries are a private capital good

discoveries result from choices

In new growth theory​ ______. A. the forces of competition destroy incentives to make new discoveries B. discoveries result from choices This is the correct answer. C. the pace of technological change influences the economic growth rate but economic growth does not influence the pace of technological change D. discoveries are a private capital good

discoveries result from choices

Real GDP per person is real GDP​ _____. A. divided by the population B. divided by the total labor hours C. multiplied by the population D. divided by aggregate demand

divided by the population

An increase in labor productivity increases potential GDP because​ ______. A. employment increases due to an increase in the supply of labor B. there is a movement along the existing production function C. production becomes more labor intensive and less capital intensive D. employment increases and a given amount of employment produces more real GDP

employment increases and a given amount of employment produces more real GDP

An increase in labor productivity increases potential GDP because​ ______. A. there is a movement along the existing production function B. employment increases and a given amount of employment produces more real GDP C. production becomes more labor intensive and less capital intensive D. employment increases due to an increase in the supply of labor

employment increases and a given amount of employment produces more real GDP

Economic growth is the​ _____. A. expansion of production possibilities B. decrease in real GDP C. expansion of consumption possibilities D. increase in real GDP

expansion of production possibilities

According to new growth​ theory, ______. A. prosperity will last but growth will not last because eventually the real interest rate​ falls, which slows the capital accumulation needed for growth B. growth can persist indefinitely This is the correct answer. C. labor productivity grows most quickly in countries with the largest populations D. growth rates and income levels per person around the globe will converge

growth can persist indefinitely

In neoclassical growth​ theory, ______. A. a population explosion brings diminishing returns to​ labor, so labor productivity eventually decreases B. real GDP per person grows because of the choices people make in the pursuit of profit C. growth will stop if technology stops advancing This is the correct answer. D. technological advances depend on how many people are looking for a new technology and how intensively they are looking

growth will stop if technology stops advancing

The quantity of labor demanded is the number of labor hours​ _______ during a given period. The quantity of labor supplied is the number of labor hours​ _______ during a given period. A. that firms are willing to hire at a minimum wage​ rate; that all the households in the economy are willing to work at a minimum wage rate B. that all the households in the economy are willing to​ work; that all the firms in the economy are willing to hire C. hired by all the firms in the​ economy; that all the households in the economy plan to work D. that produce the desired quantity of real​ GDP; that firms hire to produce the desired quantity of real GDP

hired by all the firms in the​ economy; that all the households in the economy plan to work

What is the aggregate production​ function? The aggregate production function is the relationship that tells us​ ______, when all other influences on production remain the same. A. how real GDP changes as the quantity of labor changes B. how real GDP changes as the quantity of leisure changes C. how the real wage rate changes as the quantity of labor changes D. how potential GDP changes as the labor market moves from surplus or shortage to equilibrium how real GDP changes as the quantity of labor changes

how real GDP changes as the quantity of labor changes

The fundamental source of labor productivity growth is​ ______. A. money B. physical capital C. government D. human capital

human capital

Assume that the preconditions for labor productivity growth are in place. What influences the pace of labor productivity​ growth? The pace of labor productivity growth is influenced in part by​ _______. A. population growth B. human capital growth C. the rate of change of the U.S. dollar exchange rate in the foreign exchange market D. international trade

human capital growth

Describe the gap between real GDP per person in the United States and real GDP per person in Japan between 1980 and 2016. Between 1980 and​ 2016, the gap between real GDP per person in the United States and real GDP per person in Japan​ ______. A. initially widened and then narrowed as​ Japan's economy experienced rapid growth B. initially narrowed and then widened as​ Japan's economy stagnated This is the correct answer. C. reversed D. narrowed consistently and in 2016 real GDP per person is equal in both countries

initially narrowed and then widened as​ Japan's economy stagnated

The key proposition of new growth theory that makes growth persist is that​ ______ is not subject to diminishing returns. A. physical capital B. knowledge capital C. labor D. production

knowledge capital

According to new growth​ theory, ______ experience diminishing returns. A. factors of production do not B. labor does not C. knowledge is capital that does not This is the correct answer. D. physical capital does not

knowledge is capital that does not

An increase in the population​ _______ the real wage rate. A. raises B. does not change C. lowers

lowers

Americans work longer hours than those in most other rich nations. Americans also produce more per person during the​ year, but only part of the U.S. productivity growth can be explained by the longer hours Americans work. Americans also create more wealth per hour of work. U.S. employees worked an average of​ 1,804 hours in​ 2006, compared to​ 1,564.4 for the​ French, but far less than the​ 2,200 hours that Asians worked. But the Asian countries the average labor productivity is lower. ​Source: CBS​ News, September​ 3, 2007 If workers in developing Asian economies work more hours than​ Americans, why are they not the​ world's most​ productive? Workers in developing Asian economies who work more hours than Americans are not the​ world's most productive workers because​ ______. A. the extra hours worked by people in the developing Asian economies bring diminishing returns B. productivity depends on how much real GDP each hour of labor can produce C. firms that produce in developing Asian economies have smaller profits than firms that produce in the United States D. Americans are paid more than workers in the developing Asian economies

productivity depends on how much real GDP each hour of labor can produce

Real GDP per person grows when​ ______. A. immigration laws are restrictive B. the population grows at a faster rate than real GDP grows C. real GDP and the population grow at an equal rate D. real GDP grows at a faster rate than the population grows

real GDP grows at a faster rate than the population grows

What do we measure to verify that the economy of Singapore has caught up to and surpassed the economy of the United​ States, but that the economy of Mexico has​ not? By measuring​ ______, we can see that the economy of Singapore has caught up to and surpassed the economy of the United​ States, but that the economy of Mexico has not. A. inflation per person B. the population C. real GDP D. real GDP per person

real GDP per person

Between 1916 and​ 2016, the average growth rate of real GDP per person in the United States was 2 percent a year. Complete the sentence. During this​ period, ______ grew at a faster rate than​ ______. A. ​GDP; the population B. real​ GDP; the population This is the correct answer. C. ​inflation; real GDP D. the​ population; real GDP

real​ GDP; the population

According to classical growth​ theory, when real GDP per person​ ______, the population grows. A. rises above the subsistence level B. equals the subsistence level C. grows because of technological change D. falls below the subsistence level

rises above the subsistence level

An increase in labor productivity​ ______. A. increases potential GDP and decreases potential GDP per hour of labor B. increases the supply of​ labor, increases potential​ GDP, and decreases potential GDP per hour of labor C. shifts the demand for labor curve rightward and the production function upward This is the correct answer. D. decreases the real wage​ rate, increases potential​ GDP, and increases potential GDP per hour of labor

shifts the demand for labor curve rightward and the production function upward

An increase in the population​ ______. A. shifts the supply of labor curve rightward and creates a movement along the production function This is the correct answer. B. shifts the production function upward C. increases the real wage​ rate, increases potential​ GDP, and decreases potential GDP per hour of labor D. increases potential GDP and increases potential GDP per hour of labor

shifts the supply of labor curve rightward and creates a movement along the production function

The Rule of 70 is the number of years it takes for the level of any variable to double. It is approximately 70​ _____ by the annual percentage​ _____. A. ​multiplied; interest rate B. ​divided; growth rate of the variable C. ​divided; inflation rate D. ​multiplied; growth rate of the variable

​divided; growth rate of the variable

The preconditions for labor productivity growth are​ ______. A. ​firms, markets, property​ rights, and money B. property​ rights, money,​ firms, and a slowly growing population C. ​firms, markets, money and a positive population growth rate D. ​money, a​ democracy, low​ inflation, and low interest rates

​firms, markets, property​ rights, and money

An increase in the population​ ______ potential GDP and​ ______ potential GDP per hour of labor. A. ​decreases; increases B. ​decreases; decreases C. ​increases; increases D. ​increases; decreases

​increases; decreases

An increase in labor productivity​ _______ potential GDP and​ ______ potential GDP per hour of labor. A. ​increases; decreases B. ​increases; increases C. ​decreases; decreases D. ​decreases; increases

​increases; increases

An increase in the population​ ______ the equilibrium quantity of​ labor, ______ and potential GDP. A. ​decreases; decreases B. ​increases; increases C. ​decreases; increases D. ​increases; decreases

​increases; increases

An increase in labor productivity​ ______ the real wage rate and​ ______ the equilibrium quantity of labor. A. ​increases; increases; B. ​decreases; decreases; C. ​decreases; increases; D. ​increases; decreases;

​increases; increases;