MOCK EXAM "ECONOMIC GROWTH"





1. Which of the following, other things equal, would shift a nation's long-run aggregate supply curve to the right?
A.a decrease in the total hours of work
B.a decline in productivity
C.an increase in the labor force participation rate
D.an increase in net exports


2.

R-1 F19019

Refer to the above diagram. The most likely cause of a shift from AB to CD would be a(n):
A.increase in productivity.
B.increase in the price level.
C.decrease in the size of the labor force.
D.recession.



3. Proponents of economic growth make all of the following arguments except:
A.Growth is the basic means of improving living standards.
B.It is easier to reduce poverty when the economy is growing than when it is not.
C.There is a direct relationship between a growing real GDP and pollution.
D.Growth provides an economic environment favorable to education and self-fulfillment.


4.
Use the following list to answer the following questions:

1.   Improvements in technology
2.   Increases in the supply (stock) of capital goods
3.   Purchases of rising output.
4.   Obtaining the optimal combination of goods, each at least-cost production
5.   Increases in the quantity and quality of natural resources
6.   Increases in the quantity and quality of human resources
R-2 REF17001

Which set of items in the above list would shift an economy's long-run aggregate supply curve to the right?
A.1, 2, 5, and 6 only.
B.2, 5, and 6 only.
C.2, 4, 5, and 6 only.
D.1, 3, 4 only.



5. Suppose total output (real GDP) is $4000 and labor productivity is 8. We can conclude that:
A.real GDP per capita must be $500.
B.the price-level index must be greater than 100.
C.nominal GDP must be $500.
D.the number of worker-hours must be 500.


6. All of the following are sources of increasing returns and economies of scale except:
A.network effects.
B.spreading of development costs.
C.more specialized inputs.
D.coordination problems in large organizations.


7. According to proponents of the New Economy, the business cycle is dead.
A.True
B.False


8. Improvements in education and training explain about 80 percent of the historical growth of U.S. labor productivity.
A.True
B.False


9. Which of the following is not a supply factor in economic growth?
A.the stock of capital
B.technological advance
C.the size and quality of the labor force
D.aggregate expenditures


10. Which of the following is correct?
A.total output = labor productivity/worker-hours
B.labor productivity = worker-hours/total output
C.total output = worker-hours × labor productivity
D.worker-hours = labor productivity × total output


11. Empirical studies suggest that:
A.labor productivity has declined throughout U.S. history.
B.real GDP per capita in the United States has grown about 2.3 percent per year.
C.the achieving of economies of scale is the most important factor in U.S. economic growth.
D.the U.S.'s real GDP has grown the slowest of all industrialized nations, particularly in the last decade.


12. All of the following are sources of increasing returns and economies of scale except:
A.network effects.
B.the multiplier effect.
C.learning-by-doing.
D.simultaneous consumption.


13. The New Economy is characterized by:
A.a higher trend rate of saving.
B.a higher natural rate of unemployment.
C.a higher trend rate of productivity growth.
D.the end of the business cycle.


14. In the aggregate demand-aggregate supply model, economic growth is represented by a:
A.leftward shift of the long-run aggregate supply curve.
B.leftward shift of the aggregate demand curve.
C.rightward shift of the long-run aggregate supply curve.
D.rightward shift of the short-run aggregate supply curve resulting from a decline in the price level.


15. (Last Word) A positive side effect of the New Economy in the United States between 1995 and 2000 was:
A.an increase in the saving rate.
B.a reduction in unemployment rates for blacks and Hispanics.
C.reduction of wealth inequality.
D.a decline in corporate mergers.


16. Labor productivity = worker-hours/real GDP.
A.True
B.False


17. Output-per worker in the United States declined between 1995 and 2000.
A.True
B.False


18. The most important contributor to increases in the productivity of American labor over the 1929-2000, period was:
A.the reallocation of labor from agriculture to manufacturing.
B.improvements in labor quality.
C.increases in the quantity of capital.
D.technological advance.


19. Critics of economic growth say studies show that people are not interested in achieving higher standards of living.
A.True
B.False


20. Other things equal, in which of the following instances would the increase in labor productivity be the greatest?
A.the stock of real capital and inputs of labor increase proportionately
B.the increase in the stock of real capital exceeds the increase in inputs of labor
C.the increase in inputs of labor exceeds the increase in the stock of real capital
D.inputs of labor increase and the stock of real capital remains constant



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