Q&A Hero

Q: Labor productivity growth depends on i. saving and investment. ii. increases in human capital. iii. technological growth. A) i only B) ii only C) iii only D) Both ii and iii E) i, ii, and iii

Q: Real GDP is $700 billion, average hours worked per week is 42 and aggregate hours is 150 billion hours. What is the economy's labor productivity? A) $1.80 per hour B) $3.75 per hour C) $16.67 per hour D) $4.67 per hour E) $4.50 per hour

Q: If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is 170 billion hours, labor productivity is A) $2.63 an hour. B) $2.86 an hour. C) $35,000. D) $38.00 an hour. E) 920 hours.

Q: Last year, in a nation far to the South, real GDP was $90 million and 900,000 workers were employed. This year real GDP is $100 million, 950,000 workers are employed, and the number of hours each worker works per year did not change. Hence, labor productivity A) has increased. B) has decreased. C) has remained constant. D) cannot be compared between the two years because both real GDP and the number of workers increased. E) might have changed, but more information is needed to determine if it changed.

Q: An increase in labor productivity A) increases the standard of living. B) decreases the standard of living. C) might be the result of an increase in the quantity of labor. D) generally occurs when physical capital decreases because firms must then hire more workers. E) cannot occur without a corresponding increase in employment.

Q: Sustained increases in the standard of living depend on A) increases in the quantity of labor. B) increases in the population. C) increases in aggregate hours. D) increases in labor productivity. E) decreases in labor productivity.

Q: Labor productivity is calculated as A) (real GDP aggregate hours). B) (real GDP aggregate hours number of workers). C) (real GDP number of workers ratio of capital per worker). D) (real GDP technology level). E) (real GDP aggregate hours number of workers) 100.

Q: The quantity of real GDP produced by one hour of labor is defined as A) real GDP per person. B) the advance in technology. C) the growth rate of technology. D) labor productivity. E) economic growth.

Q: Labor productivity is equal to the quantity of A) real GDP produced by one hour of labor. B) workers employed during one hour. C) real GDP consumed by the total population in one hour. D) real GDP. E) workers who are gainfully employed.

Q: Labor productivity equals A) real GDP. B) real GDP per hour of labor. C) the total production of labor. D) the quantity of labor hours divided by real GDP. E) real GDP divided by the amount of human capital.

Q: Labor productivity is defined asA) total real GDP.B) real GDP per person.C) total output multiplied by total hours of labor.D) real GDP per hour of labor.E) hours of work per person.

Q: The table above gives information about the economy of Spain. If the growth rate in 1998 is maintained, real GDP will double in ________ years.A) 4B) 19C) 10D) 18E) 25

Q: Suppose that in the future, real GDP per person grows 2 percent a year in the United States and 4 percent a year in China. It will take real GDP per person approximately ________ years to double in the United States and approximately ________ years to double in China.A) 70; 35B) 35; 17.5C) 35; 8.75D) 50; 25E) 20; 10

Q: If a country experiences a real GDP growth rate of 4 percent, real GDP will double in A) 14 years. B) 17.5 years. C) 23.3 years. D) 35 years. E) 25 years.

Q: If real GDP grew 5 percent last year and the population grew 2 percent, then real GDP per person grew by ________ percent. A) 10 B) 5 C) 3 D) 2 E) 7

Q: If real GDP increases by 6 percent and at the same time the population increases by 2 percent, then real GDP per person grows by A) 6 percent. B) 4 percent. C) 2 percent. D) 8 percent. E) 3 percent.

Q: The table above gives information about the economy of France. The growth rate of real GDP per person in 1998 is ________ percent.A) 3.1B) 0.4C) 3.6D) 4.0E) 1.9

Q: If the growth rate of population is greater than a nation's growth rate of real GDP, then its real GDP per personA) falls.B) rises.C) does not change.D) might rise, fall, or not change.E) cannot be measured.

Q: The standard of living is measured by A) real GDP. B) employment. C) employment per person. D) real GDP per person. E) the population.

Q: The table gives information about the economy of Japan. The economic growth rate in 1997 is ________ percent.A) 8.0B) 0.8C) 0.08D) 0.008E) 4

Q: Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year. The economic growth rate between these years has beenA) 10.31 percent.B) 4.65 percent.C) 5.67 percent.D) 7.67 percent.E) $0.4 trillion.

Q: The economic growth rate is expressed as the A) annual percentage change of real GDP per person. B) growth rate of real GDP minus the growth rate of population. C) standard of living. D) annual percentage change of real GDP. E) growth rate of the population.

Q: Economic growth is a sustained expansion of production possibilities measured as the increase in ________ over a given period. A) real GDP B) real GDP per person C) the standard of living D) capital per person E) population

Q: The economic growth rate is measured as the A) annual percentage change of real GDP. B) annual percentage change of employment. C) amount of real GDP. D) annual percentage change of the population. E) amount of population.

Q: Since the beginning of the 20th century the decade with the slowest real GDP per person growth rate other than the 1930s is ________ because of the ________. A) 2000-2010; the war on terror B) 1990-2000; fear of Y2K C) 1930-1940; Great Depression D) 2000-2010; 2008/2009 deep recession E) 2010-2020; Keynesian economic policies being used more frequently than in the 1930s

Q: Real GDP per person averaged $150 a year (in 2009 dollars) from 1,000,000 BC until 1620. Then in ________ real GDP began to increase without limit and by 1850 had risen to twice its 1650 level because ________. A) 1650; the Pilgrims arrived in the Americas B) 1750; Columbus arrived in the Americas C) 1650; of the Industrial Revolution D) 1750; of the Industrial Revolution E) 1776; United States was founded

Q: Real GDP per person averaged $150 a year (in 2009 dollars) from 1,000,000 BC until 1620. During this time there was a period when it rose to ________ around ________ because ________. A) $210; 1620; the Pilgrim Fathers began to arrive in the Americas B) $210; 1492; Columbus sailed to the Americas C) $140; 400 BC; the Roman Empire collapsed D) $190; 500 BC; of the gains from human capital while Aristotle and Plato were teaching in Athens E) a 1-million year high; the 1340s; the Black Death gripped Europe

Q: For the world, what period of time experienced the fastest growth rate of real GDP per person? A) around 500 B.C. B) around 400 A.D. C) between 1000 A.D. and 1500 A.D. D) after about 1850 A.D. E) between 1500 A.D. and 1850 A.D.

Q: Over the past 110 years, real GDP per person in the United States has grown at an average rate of about ________ per year. A) 1 percent B) 2 percent C) 5 percent D) 10 percent E) 7.5 percent

Q: Suppose Mexico's real GDP per person in 2008 is $6,000 and the U.S. real GDP per person is $24,000. Mexico has annual growth in real GDP per person of 5 percent. Approximately how many years will it take Mexico to equal $24,000 of real GDP per person? A) 14 years B) 18 years C) 28 years D) 36 years E) 40 years

Q: In this year, Country A has a real GDP per person that is 4 times greater than that of Country B. Country B's growth rate of real GDP per person is 3.5 percent per year. How many years will it take for Country B's real GDP per person to reach the same level that Country A had in this year? A) 10 years B) 20 years C) 40 years D) 60 years E) 56 years

Q: If it took 20 years for real GDP to double, what was the growth rate of real GDP? A) 4.5 percent B) 3.0 percent C) 3.5 percent D) 4 percent E) 5 percent

Q: This year Iceland has a real GDP per person that is approximately 8 times greater than that of Cape Verde. Cape Verde's growth rate of real GDP per person was 5.2 percent. If Cape Verde maintains this current growth rate, approximately how many years will it take for Cape Verde's real GDP per person to reach the same level that Iceland has this year? A) 13.5 years B) 20 years C) 27 years D) 40 years E) 54 years

Q: This year, real GDP per person in Country A is eight times real GDP per person in Country B. If Country B's real GDP per person grows at a rate of 5 percent, about how many years will it take for Country B to reach the level of real GDP per person in Country A in this year? A) 14 years B) 28 years C) 56 years D) 42 years E) It will never reach Country A's level of GDP per person.

Q: If a country experiences a real GDP growth rate of 6 percent, real GDP will double in A) 10 years. B) 11.67 years. C) 14 years. D) 17.5 years. E) 16.67 years.

Q: A nation's annual growth rate of real GDP per person is 2 percent. Its standard of living will A) double in 35 years. B) not change because its population is growing. C) fall because of its population growth. D) double in 10 years. E) double in 50 years.

Q: Using the rule of 70, a sustained 3 percent per year real GDP growth rate will A) last for 70 years. B) double the current level of real GDP in about 23 years. C) double the current level of real GDP in about 210 years. D) double the current level of real GDP in about 70 years. E) double the current level of real GDP in about 40 years.

Q: The annual growth rate of an economy is 10 percent. The economy's GDP will double in about ________ years. A) 7 B) 10 C) 12 D) 14 E) 20

Q: According to the Rule of 70, if a country grows at 2.0 percent per year instead of 1.5 percent per year, how many fewer years will it take to double its level of real GDP? A) It will take 11.6 years fewer. B) It will take 35 years fewer. C) It will take 58.3 years fewer. D) It will take 20 years fewer. E) It will take 17.9 years fewer.

Q: If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it take for Country A's real GDP to double? A) 10 B) 7 C) 5 D) 30 E) 14

Q: Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent? A) 63 years B) 77.7 years C) 70 years D) 109 years E) 100 years

Q: The Rule of 70 can be used to calculate the A) economic growth rate per month. B) population growth rate per year. C) number of years it would take for the level of any variable to double. D) 70 percent level of the economic growth rate. E) economic growth rate per year.

Q: What is an efficiency wage and what effect does it have in the labor market?

Q: What factors can push the real wage rate above its equilibrium level? Briefly explain each factor.

Q: What is job rationing and how does it relate to unemployment? What factors can lead to job rationing? Briefly explain these factors.

Q: "Job rationing occurs when the quantity of labor demanded exceeds the quantity supplied." Is the previous statement true or false? Explain your answer.

Q: What factors can lead the real wage rate to be above its full-employment equilibrium level?

Q: Explain how some structural changes can increase the natural unemployment rate while other structural changes can decrease the natural unemployment rate.

Q: What is job search and what is the relationship between job search and unemployment? What factors can affect the amount of job search? Briefly discuss the effect of each factor.

Q: For most years since 1980, the natural unemployment rate was higher in Canada than in the United States. What possible explanation for some of this difference has been suggested?

Q: What is the effect of an increase in unemployment benefits on the unemployment rate?

Q: Looking over the last six decades since 1950, how did the average U.S. unemployment rate during the 2000s compare to the other five decades?

Q: Over the last decade, a country experiences a significant increase in labor productivity.a. Draw and label a labor market supply and demand diagram. Show how the equilibrium real wage rate and the equilibrium quantity of labor change as productivity increases.b. Draw and label a production function. Show how potential GDP changes as labor productivity increases.

Q: The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.a. What are the equilibrium real wage rate and the level of employment?b. What is potential GDP? If you cannot determine a precise amount, give the range in which potential GDP must lie.

Q: The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.a. What are the equilibrium real wage rate and the level of employment?b. What is potential GDP?

Q: The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.a. What are the equilibrium real wage rate and the level of employment?b. What is potential GDP?

Q: Explain how the labor market and the production function determine potential GDP.

Q: Explain how the real wage and the extra output produced by each worker determine the quantity of labor demanded by a firm.

Q: Define the production function. Discuss why the production function exhibits diminishing returns.

Q: Discuss the production function. How does the production function relate to the labor market and potential GDP?

Q: Briefly define real and potential GDP, and explain the relationship between real GDP and potential GDP. How can we measure potential GDP?

Q: Define potential GDP. Under what circumstances does actual real GDP fall short of potential GDP, equal potential GDP, and exceed potential GDP?

Q: The smaller the extent of job rationing, theA) lower potential GDP.B) lower the unemployment rate.C) lower the labor force participation rate.D) higher the labor supply.E) higher the real wage rate.

Q: An increase in the time spent on job search A) decreases potential GDP. B) decreases the unemployment rate. C) decreases the labor force participation rate. D) decreases the demand for labor. E) decreases the real wage rate.

Q: If the government raises income taxes, then the equilibrium amount of employment ________ and potential GDP ________. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) does not change; does not change

Q: If the government raises income taxes, then the labor A) demand curve shifts rightward. B) demand curve shifts leftward. C) supply curve shifts rightward. D) supply curve shifts leftward. E) Both answers B and D are correct.

Q: If the government increases unemployment benefits, then the equilibrium amount of employment ________ and potential GDP ________. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) does not change; does not change

Q: If the government increases unemployment benefits, then the labor A) demand curve shifts rightward. B) demand curve shifts leftward. C) supply curve shifts rightward. D) supply curve shifts leftward. E) Both answers B and D are correct.

Q: The figure above shows the U.S. supply of labor curve. What was the effect of the decline in birth rates during the 1960s and 1970s on the supply of labor curve in the 1980s?A) a rightward shift of the supply of labor curveB) The supply of labor curve became steeper.C) a movement downward along the supply of labor curve from a point such as A to a point such as BD) a leftward shift of the supply of labor curveE) None of the above answers is correct because there was no change in the supply of labor curve.

Q: The figure above shows the U.S. supply of labor curve. An increase in the income tax rate leads to aA) rightward shift of the supply of labor curve.B) movement upward along the supply of labor curve from a point such as C to a point such as B.C) movement downward along the supply of labor curve from a point such as A to a point such as B.D) leftward shift of the supply of labor curve.E) None of the above answers is correct because there is no change in the supply of labor curve.

Q: The figure above shows the U.S. supply of labor curve. If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be aA) rightward shift of the supply of labor curve.B) leftward shift of the supply of labor curve.C) movement downward along the supply of labor curve from a point such as A to a point such as B.D) movement upward along the supply of labor curve from a point such as C to a point such as B.E) None of the above answers is correct because there is no change in the supply of labor curve.

Q: The figure above shows the U.S. demand for labor curve. If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be aA) rightward shift of the demand for labor curve.B) leftward shift of the demand for labor curve.C) movement downward along the demand for labor curve from a point such as A to a point such as B.D) movement upward along the demand for labor curve from a point such as C to a point such as B.E) None of the above answers is correct because there is no change in the demand for labor curve.

Q: The figure above shows the U.S. production function. How would an increase in income taxes be shown in the figure?A) a movement from point C to point BB) a movement from point A to point BC) an upward shift or rotation of the production functionD) a downward shift or rotation of the production functionE) None of the above because the effects of an increase in taxes cannot be shown in the figure.

Q: The figure above shows the U.S. production function. How would an increase in unemployment benefits be shown in the figure?A) a movement from point C to point BB) a movement from point A to point BC) an upward shift or rotation of the production functionD) a downward shift or rotation of the production functionE) None of the above because the effects of an increase in unemployment benefits cannot be shown in the figure.

Q: The figure above shows the U.S. production function. How would an increase in capital be shown in the figure?A) an upward shift or rotation of the production functionB) a downward shift or rotation of the production functionC) a movement from point A to point BD) a movement from point C to point BE) None of the above because the effects of an increase in capital cannot be shown in the figure.

Q: Collective bargaining by unions can result in a union wage rate that is ________ the equilibrium real wage rate and creates a ________ of labor.A) above; surplusB) above; shortageC) below; surplusD) below; shortageE) equal to; surplus

Q: Intel wants to attract the most productive and knowledgeable workers. To achieve this goal it could pay ________ wage. A) an efficiency B) a minimum C) a nominal D) an equilibrium E) a Lucas wedge

Q: Job rationing occurs if A) the minimum wage is set below the equilibrium wage rate. B) an efficiency wage is set below the equilibrium wage rate. C) a union wage is set below the equilibrium wage rate. D) the real wage rate is pushed above the equilibrium wage rate. E) the Lucas wedge is positive.

Q: The existence of union wages, efficiency wages, and the minimum wage A) raises the real wage rate above the equilibrium wage rate and creates a shortage of labor. B) lowers the real wage rate below the equilibrium wage rate and creates a shortage of labor. C) raises the real wage rate above the equilibrium wage rate and raises the natural unemployment rate. D) does not have an impact on the equilibrium wage rate or on the amount of unemployment. E) raises the real wage rate above the equilibrium wage rate and lowers the natural unemployment rate.

Q: The more generous the amount of unemployment benefits, the A) higher the opportunity cost of job search. B) lower the opportunity cost of job search. C) shorter the time spent searching until accepting a suitable job. D) shorter the time spent searching for a suitable job and the higher the opportunity cost of being unemployed. E) lower the natural unemployment rate.