Econ 121

negative

(Figure: Depreciation and Investment) According to this diagram of the Solow model, if the current capital stock is 70, then economic growth will be:

50 units

(Figure: Depreciation and Investment) According to this diagram of the Solow model, the steady-state level of the capital stock is:

60; 40

(Figure: Labor Market) Refer to the figure. What is the number of people who are employed at the market wage? How many people end up unemployed due to the implementation of a $10 minimum wage?

20 million

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. How many people in this country are in the labor force?

66.7%

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's labor force participation rate?

25%

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's unemployment rate?

does not have a job but is actively looking for one

An unemployed person is one who:

the development of new technology in production

Assume that a country's production function changes from to . Which of the following events could explain the change in this production function?

production function to shift upward.

Better ideas cause the:

physical capital, human capital, and technological knowledge per worker.

Countries with high GDP per capita tend to have a lot of:

the marginal product of capital

Diminishing returns to capital implies that _____ diminishes as more capital is added.

raise structural unemployment

Higher levels of unemployment benefits and employment protection:

acquired only through investment of time and other resources.

Human capital is:

0%

If = 5%, = -3%, and = 2%, then must equal:

remains constant

If investment equals depreciation, then the capital stock:

increases

If investment is greater than depreciation, then the capital stock:

decreases

If investment is less than depreciation, then the capital stock:

6 units

If the depreciation rate is 0.03 and the capital stock is 200, how many units of capital will depreciate this period?

16 units

Imagine an economy with production function Y = F(K) = and 400 units of capital. If the fraction of output invested in new capital is γ = 0.2 and the depreciation rate is δ= 0.05, what is the steady-state amount of capital?

a decrease in both the capital stock and output.

In the Solow model, if a country's depreciation rate (δ) increased from 1% to 2% and it was operating at its steady state before the change, we would expect to see:

growth in the money supply

In the equation , what does M stand for?

inflation

In the equation , what does P stand for?

real GDP

In the equation , what does Yr stand for?

growth in the velocity of money

In the equation , what does v stand for?

structural

Oil shocks, the shift from manufacturing to service jobs, and the use of new technologies are reasons for _____ unemployment.

French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher.

Structural unemployment is more persistent in France than in the United States because:

may continue to increase even if human capital remains relatively constant.

Technological knowledge:

the marginal product of capital.

The increase in output caused by the addition of one more unit of capital is called:

understated

The presence of discouraged workers causes the measured unemployment rate to be:

structural unemployment

The shift toward more of a service economy and less of a manufacturing economy in the United States has caused an increase in:

There is no new net investment or any growth.

What is meant by the "steady-state" level of capital?

scarcity of information

What is one of the causes of frictional unemployment?

6%

When inflation is 4% and the real GDP growth rate is 2%, what is the spending growth rate?

someone who is collecting unemployment benefits

Which of the following individuals can be counted as part of the labor force?

Both minimum wages and union wages

_____ reduce the quantity of labor demanded.