Econ 7 assignment

Using the Rule of 70, if the country of Flowerdom's current growth rate of real GDP per person was 7 percent a year, how long would it take the country's real GDP per person to double? 2 years 49 years 10 years 1 year

10 years

The decreasing slope of a production function reflects diminishing returns. decreasing costs. increasing aggregate demand. rising unemployment.

diminishing returns.

The Industrial Revolution in England in large was the result of growth in human capital. technological innovations encouraged by the market system. population growth. technological innovations that were financed mainly by government spending.

technological innovations encouraged by the market system.

In 2010, of the following ________ had the highest real GDP per person. Japan Canada the United States the Europe Big 4 countries

the United States

The labor demand curve slopes downward because the firm maximizes profits by hiring more labor when the real wage rate falls. workers supply fewer hours of work when the real wage rate rises. the firm maximizes profits by hiring more labor when the real wage rate rises. workers supply more hours of work when the real wage rate rises.

the firm maximizes profits by hiring more labor when the real wage rate falls.

Greater labor force participation for households at higher real wage rate is one reason that the demand for labor curve is upward sloping. the supply of labor curve is downward sloping. the demand for labor curve is downward sloping.

the supply of labor curve is upward sloping.

Greater labor force participation for households at higher real wage rate is one reason that the demand for labor curve is upward sloping. the supply of labor curve is upward sloping. the demand for labor curve is downward sloping. the supply of labor curve is downward sloping.

the supply of labor curve is upward sloping.

When cyclical unemployment is zero, the unemployment rate equals the natural unemployment rate. structural unemployment is zero. frictional unemployment is zero. cyclical and frictional unemployment are zero.

the unemployment rate equals the natural unemployment rate.

Testgen questions still do not copy to other applications.Which of the following means that the CPI overstates the actual inflation rate? quality change bias outlet substitution bias new goods bias All of the above cause the CPI to overstate inflation

All of the above cause the CPI to overstate inflation

Which type of price index uses base year quantities (i.e. the quantities before the price change) which typically overstates inflation? Paasche Laspeyres Fisher's Mean None of the above

Laspeyres

Which type of price index theory uses current period's year's quantities (after the price change)? Paasche Laspeyres Boskin's Index Fisher's Mean

Paasche

Which of the following is consistent with classical growth theory? Real GDP per person will never permanently increase. As real GDP increases, there will be a decrease in the rate of population growth. Real GDP per person will increase because technological change induces investment. Competition destroys innovation and decreases profit.

Real GDP per person will never permanently increase.

Which of the following is a price index commonly used by economists and policy makers? CORE Inflation Consumer Price Index GDP Deflator Personal Consumption Expenditure (PCE) all of these answers

all of these answers

The growth rate of real GDP per person in the United States has has consistently been 2 percent per decade over the past century. has been the highest in the world over the past 5 decades. averaged approximately 2 percent per year over the past century. has increased every year over the past century.

averaged approximately 2 percent per year over the past century.

Purchasing power parity prices are used to: adjust for differences in population. is a proper measure of economic welfare. do not omit the underground economy. can be used to make more valid per capita GDP comparisons between one country and another.

can be used to make more valid per capita GDP comparisons between one country and another.

Economic growth is measured by changes in nominal GDP. changes in real GDP. changes in the employment rate. All of the above are used to measure economic growth.

changes in real GDP.

The view that population growth occurs when real GDP per person exceeds the amount necessary to sustain life is part of the ________. classical growth theory new growth theory neoclassical growth theory modern theory of population growth

classical growth theory

U6 measure of unemployment is approximately _______ the U3 measure of unemployment. double 150% 75% triple

double

The three types of unemployment are frictional, part-time, and involuntary. voluntary, involuntary, and structural. voluntary, part-time, and cyclical. frictional, structural, and cyclical.

frictional, structural, and cyclical.

We are interested in long-term growth primarily because it brings higher standards of living. lower price levels. trade wars with our trading partners. higher price levels.

higher standards of living.

An increase in saving that leads to more capital accumulation ________ labor productivity. does not change decreases probably changes but in an ambiguous direction increases

increases

If the population increases, then potential GDP ________ and employment ________. decreases; increases increases; increases increases; decreases decreases; decreases

increases; increases

The gap between real GDP per person in Africa and real GDP per person in the United States has been increasing. remaining fairly constant. there is no gap in real GDP per person between Africa and the United States. decreasing.

increasing.

The nominal interest rate minus the real interest rate approximately equals the the rate of increase in the income. inflation rate. the rate the bank receives to cover lending costs. rate of increase in the amount of investment.

inflation rate.

According to the new growth theory the labor demand curve does not shift rightward over time. the rate of technological progress is determined by chance. the concept of a labor market is not necessary. knowledge is not subject to diminishing returns.

knowledge is not subject to diminishing returns.

Moving along the aggregate production function shows the relationship between ________, holding all else constant. capital input and real GDP labor input, capital input and real GDP labor input and real GDP technology and real GDP

labor input and real GDP

According to the law of diminishing returns, an additional unit of labor produces less output than the previous unit. capital produces more output than an additional unit of labor. labor decreases output. labor produces more output than the previous unit.

labor produces less output than the previous unit.

The real wage rate will fall if the labor demand curve shifts rightward and the labor supply curve does not shift. labor supply curve shifts leftward and the labor demand curve does not shift. labor demand curve shifts rightward more than the labor supply curve shifts rightward. labor supply curve shifts rightward and the labor demand curve does not shift.

labor supply curve shifts rightward and the labor demand curve does not shift.

A higher savings rate that leads to an increase in the capital stock is associated with a decrease in the rate of growth of the population. immediately decreases investment. leads to increases in labor productivity. leads to higher interest rates.

leads to increases in labor productivity.

The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will remain at point W. move to point such as Y. move to point such as Z. move to point such as X.

move to point such as Z.

Price indexes can overstate inflation because they do not contain the prices of services. omit quality improvements of goods and services. do not contain the prices of foreign goods. do not contain the prices of any used goods.

omit quality improvements of goods and services.

According to the Boskin Commission, the CPI: overstates inflation by 3.9 percentage points per year. overstates inflation by 1.1 percentage points per year. understates inflation by 1.1 percentage points per year. is accurately measured.

overstates inflation by 1.1 percentage points per year.

Human capital is a measure of the labor productivity of workers. the investment people make in industries that make capital goods. people's knowledge and skills. the saving done by human beings.

people's knowledge and skills.

Factors that influence labor productivity include ________. the inflation rate, the real wage rate, and the exchange rate the labor demand curve physical capital, the real wage rate, and technology physical capital, human capital, and technology

physical capital, human capital, and technology

Ongoing economic growth in real GDP per person requires all of the following EXCEPT ________. investment in human capital saving and investment in new capital population growth the discovery of new technologies

population growth

All of the following contribute to labor productivity growth EXCEPT: human capital growth. technological advancements. physical capital growth. population growth.

population growth.

Labor growth depends mainly on ________ and labor productivity growth depends mainly on ________. growth in real GDP per person; technological advances population growth; increases in real GDP population growth; technological advances growth in real GDP per person; growth rate of capital

population growth; technological advances

Labor growth depends mainly on ________ and labor productivity growth depends on ________. population growth; technological advances growth in real GDP per person; growth rate of capital growth in real GDP per person; technological advances population growth; increases in real GDP

population growth; technological advances

U.S. investment is financed from private borrowing, government budget deficits, and lending to the rest of the world. private saving, government budget surpluses, and borrowing from the rest of the world. private saving, government budget deficits, and borrowing from the rest of the world. private saving and borrowing from the rest of the world only.

private saving, government budget surpluses, and borrowing from the rest of the world.

In the labor market, an increase in labor productivity ________ the real wage rate and ________ the level of employment. lowers; decreases raises; increases raises; decreases lowers; increases

raises; increases

Labor productivity is real GDP per hour of labor times the number of people. real GDP per hour of labor times the hours of work. real GDP per hour of labor or real GDP per worker. the rate of change in real GDP per hour of labor.

real GDP per hour of labor or real GDP per worker.

An increase in the working-age population results in a leftward shift of the supply of labor curve and a decrease in potential GDP. rightward shift of the demand for labor curve and no change in potential GDP. rightward shift of the supply of labor curve and an increase in potential GDP. rightward shift of demand for labor curve and an increase in potential GDP.

rightward shift of the supply of labor curve and an increase in potential GDP.

If new capital increases labor productivity, the supply of labor ________ and the demand for labor ________. increases; increases stays the same; increases increases; decreases decreases; stays the same

stays the same; increases

If net taxes exceed government expenditures, the government sector has a budget ________ and government saving is ________. surplus; positive deficit; negative deficit; positive surplus; negative

surplus; positive

Neoclassical growth theory attributes economic growth to technological change. fiscal policy. increasing population growth. the law of diminishing returns.

technological change.

If a rich country grows at a faster rate than a poor one, then the difference in their living standards will not change over time. the gap in their standard of living will widen over time. whether or not the living standards gap widens or closes over time depends on the absolute size of the relative growth rates. the gap in their standard of living will close over time.

the gap in their standard of living will widen over time.

If a rich country grows at a faster rate than a poor one, then the gap in their standard of living will widen over time. the difference in their living standards will not change over time. the gap in their standard of living will close over time. whether or not the living standards gap widens or closes over time depends on the absolute size of the relative growth rates.

the gap in their standard of living will widen over time.

Other things remaining the same, the greater the expected profit, the steeper is the investment demand curve. the flatter is the investment demand curve. the less the amount of investment. the greater the amount of investment.

the greater the amount of investment.

The term "capital," as used in macroeconomics, refers to investment. financial wealth. the plant, equipment, buildings, and inventories of raw materials and semi-finished goods. the sum of investment and government purchases of goods.

the plant, equipment, buildings, and inventories of raw materials and semi-finished goods.

The supply of labor curve is vertical at potential GDP. horizontal at the equilibrium wage rate. downward sloping. upward sloping.

upward sloping.

If the CPI index value for 2010 is 210 ; and your nominal income is $42,000 for 2018 , then your real income in base years prices is: $20,000 $42,000 $27,570 None of the above.

$20,000

If the CPI index value for 2010 is 210 ; and for 2018 is 250, then the cumilatove inflation rate between the two years is: 11% 19% None of the above. 4%

19%

Over the last 100 years, the average U.S. growth rate in real GDP per person was about 12.5 percent per year. 6 percent per year. 1 percent per year. 2 percent per year.

2 percent per year.

If the nominal interest rate is 8 percent and the current inflation rate is 3 percent, approximately what is the real interest rate? 3 percent 5 percent 8 percent 11 percent

5 percent

Workers who pursue an education directly increase their human capital. saving. physical capital. financial capital.

human capital.