GDP

Financial capital is the

money used to buy physical capital

The increase in real GDP per hour of labor that results from an advance in technology makes labor _______ productive ________

more; at all quantities of capital

The classical growth theory is that real GDP per person

only temporarily rises and then returns to the subsistence level

Crowding out occurs when

the government budget is in deficit and the real interest rate rises

households' labor supply decisions are influenced by all of the following except

the number of full-time jobs available

In new growth theory, the source of economic growth is

the persistent want for a higher standard of living

demand for labor curve shows the relationship between

the quantity of labor businesses are willing to hire and the real wage rate

The supply of labor is the relationship between

the real wage rate and the quantity of labor supplied

The supply of loanable funds increases

when disposable income increases or wealth decreases

potential GDP is the value of the goods and services produced in the United States

when the U.S. economy is at full employment

An increase in expected profit _______ the real interest rate and ________ the quantity of loanable funds.

increases; increases

If the population growth rate is 2 percent, real GDP per person will double in 7 years if real GDP grows by ______ percent per year.

12

l GDP increases from $5 billion to $5.25 billion and the population increases from 2 million to 2.02 million, real GDP per person increases by ___ percent.

4.0

if the price of a U.S. government bond is $50 and the owner of the bond is entitled to $2.50 income each year, then the interest rate on the bond

5 percent

all of the following increase labor productivity except

an increase in consumption

In the loanable funds market, an increase in

expected profit increases the demand for loanable funds

an economy can achieve faster economic growth without

increase in the population growth rate

An increase in the government budget deficit

increases private saving and decreases investment

A government budget surplus

increases the supply of loanable funds

The increase in real GDP per hour of labor that results from an increase in capital per hour of labor

is larger at a small quantity of capital than at a large quantity of capital