08 Jun Question ) In neoclassical growth theory, ___________.
Question
) In neoclassical growth theory, ___________.
A. real GDP per person grows because of the choices people make in the pursuit of profit B. technological advances depend on how many people are looking for a new technology C. a population explosion bring diminishing returns to labor
D. growth will stop if technology stops advancing
2) The Classical macroeconomic model proposes that
A. government intervention is required to help the economy reach its potential. B. real GDP equals potential GDP as long as inflation equals zero.
C. changes in the quantity of money are critical in driving economic growth. D. markets work efficiently to produce the best macroeconomic outcomes.
3) The Keynesian macroeconomic model states that
A. the economy is inherently unstable and government intervention is required to maintain continued economic growth.
B. markets work efficiently to produce the best macroeconomic outcomes.
C. fluctuations in the quantity of money are responsible for most economic recessions. D. changes in technology generate business cycles.
4) Potential GDP(YP) is
A. equal to the maximum amount of goods and services that can be produced B. another name for real GDP.
C. the level of output produced when the economy is fully employed.
D. a measure of the short term fluctuations in real GDP.
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5) The production function describes the relationship between A. the real wage and the quantity of labor supplied.
B. real GDP and the quantity of labor employed.
C. real and potential GDP.
D. potential GDP and the real wage rate.
6) An increase in the real wage rate ________ the quantity of labor demanded (LD) and ________ the quantity of labor supplied (LS).
A. increases; increases B. increases; decreases
C. decreases; increases D. decreases; decreases
7) The Rule of 70, as applied to real GDP growth, can be used to find the A. real GDP growth rate necessary to double growth.
B. number of years it takes for the level of real GDP to double.
C. population growth rate necessary to double the GDP growth rate.
D. number of years it takes for the growth rate of real GDP to double.
8) Suppose that an Intel worker rearranges existing machines and labor and increases the quantity of chips Intel can produce. Using the productivity curve graphed, this innovation would be described as
A. a movement upward along the curve. B. a movement downward along the curve. C. a shift of the curve upward. D. a shift of the curve downward.
9) A technological change ________ and a change in the population ________.
A. shifts the production function; shifts the production function
B. shifts the production function; creates a movement along the production function C. creates a movement along the production function; shifts the production function D. does not change the production function; creates a movement along the production function
10) Suppose the economy was initially in a long-run equilibrium. Then the world economy expands so that foreign incomes rise. U.S. aggregate demand ________ in the short run. In the long run, the money wage rate ________.
A. increases; rises B. decreases; falls C. decreases; rises D. increases; falls
11) An increase in the opportunity cost of holding money (increase in the interest rate) creates a ________ the money demand curve and an increase in real GDP creates a ________ the money demand curve.
A. leftward shift of; movement down along B. movement up along; leftward shift of C. rightward shift of; movement down along D. movement up along; rightward shift of
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