test 2 pre quiz

A surplus of labor is eliminated by ________ in the real wage rate and a shortage of labor is eliminated by ________ in the real wage rate.

a decrease; an increase

Which of the following statement or statements are correct about potential GDP? i. Actual real GDP equals potential GDP when the economy is at full employment. ii. Real GDP can be less than potential GDP. iii. When real GDP equals potential GDP, it also equals nominal GDP.

i and ii

If the stock of physical capital (that is machinery, equipment, etc.) and human capital remains the same and the population increases, then

labor productivity will decrease.

The inflation rate is the

percentage change in the CPI from one year to the next year.

The level of real GDP the economy produces at full employment is

potential gdp

) If real GDP was $13.1 trillion in 2013 and $13.3 in 2014, what is the growth rate?

1.5 percent

The expansion of human capital and the discovery of new technologies ________ because ________.

are not subject to diminishing returns; they shift the productivity curve upward

Item Quantity Price (2000) (2000) 4 $5.00 2 $3.00 4 $1.00 Price (2010) $7.50 $3.00 $1.50 Movie tickets Bags of popcorn Cups of Mt. Dew 3) The information in the above table gives the 2000 base period market basket and prices used to 3) construct the CPI for a small nation. The table also has 2010 prices. What is the value of the CPI for the base period 2000?

100

The value of the CPI for the reference base period is always

100

) The information in the above table gives the 2000 base period market basket and prices used to 4) construct the CPI for a small nation. The table also has 2010 prices. What is the value of the CPI for 2010?

140

Year CPI 1994 90.0 1996 95.5 1998-2000 2002 100.0 104.0 2) The table above gives the CPI for a nation. Based on the table, we can determine that the reference 2) base period is

1998-2000

The annual growth rate of an economy is 10 percent. The economy's GDP will double in about 17) ________ years.

7

If the cost of the CPI market basket at current period prices is $275 and the cost of the CPI market basket at base period prices is $350, the CPI is

79

The production function shows that as employment increases, real GDP

increases at a decreasing rate.

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

lower the real wage rate, the smaller the quantity of labor supplied.

The real wage rate is the ________ divided by the ________.

nominal wage rate; price level

The Rule of 70, as applied to real GDP growth, can be used to find the

number of years it takes for the level of real GDP to double.

Labor productivity equals

real GDP per hour of labor