Homework #3 - Chapter 6

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

Human capital

Real GDP grows when: I. the quantities of the factors of production grow. II. persistent advances in technology make factors of production increasingly productive. III. human capital grows

I, II, and III

Which of the following statements is CORRECT? - When the real wage increases, the labor supply curve shifts rightward. - When the real wage increases, the labor supply curve shifts leftward. - When the real wage decreases, the labor supply curve shifts leftward.

None of these statements are correct.

Which theory of economic growth concludes that growth can continue indefinitely?

The new theory.

Potential GDP per labor hour can increase due to

increases in labor productivity.

Technological change

increases potential GDP.

Ongoing economic growth in real GDP per person requires all of the following EXCEPT ________.

population growth

The aggregate production function shows how ________ varies with ________.

real GDP; labor

People base their labor supply on the ________ because they care about ________.

real wage; what their earnings will buy

Over the last 100 years, the average U.S. growth rate in real GDP per person was about

2 percent per year.