Chapterr 17

Question
n 1 (1 point))
When a production
p
function
fu
is grraphed with Real GDP oon the verticaal axis and laabor on the
horizontaal axis, a risee in labor __
___________
______________which shhifts the LRA
AS curve
________
_____ resultting in _____
__________
_________.
Question
n 1 options:
fts the producction functio
on up; rightw
ward; econom
mic growth
shift
fts the producction functio
on down; left
ftward; a shriinking econoomy
shift
mov
ves us up alo
ong a given production
p
fu
unction; righhtward; econnomic growtth
mov
ves us down along a giveen productio
on function; lleftward; a sshrinking ecoonomy
Question
n 2 (1 point))
Country X experiencces an increaase in Real GDP
G
and an iincrease in pper-capita Reeal GDP. It
follows that
Question
n 2 options:
the residents
r
of country X arre happier th
han they usedd to be.
the benefits
b
of economic
e
gro
owth outweigh the costs of economic growth.
the costs
c
of econ
nomic growtth outweigh the benefits of economic growth.
all th
he residents of country X are "richerr" in terms oof goods andd services thaan they usedd to
be.
nonee of the abov
ve
Question
n 3 (1 point))
A useful rule of thum
mb called thee "Rule of 70
0" states thatt if somethinng grows at a constant raate of
Z percent per year, itt doubles in size
s approximately everyy ___________ years.
Question
n 3 options:
70 - Z
70/Z
Z

0
Z/70
70 (Z/100)
Question
n 4 (1 point))
The Reall GDP of cou
untry X doub
bled in 10 yeears. It follows that
Question
n 4 options:
p
Real
R GDP dou
ubled during
g this time, tooo.
the per-capita
p
Real
R GDP rem
mained stable during thiss time.
the per-capita
p
Real
R GDP fell during this time.
the per-capita
disp
posable incom
me also doub
bled during this
t time.
nonee of the abov
ve
Question
n 5 (1 point))
Refer to Exhibit 17-1
1. If this pro
oduction funcction is grapphed with Reeal GDP on tthe vertical aaxis
hnology coeffficient rises from 0.50 to 0.60, it woould
and laborr on the horiizontal axis, and the tech
cause a
Question
n 5 options:
shift
ft upward in the
t production function to a higher llevel of Reall GDP.
shift
ft downward in the produ
uction function to a loweer level of Reeal GDP.
mov
vement down
n along the same
s
producction functionn to a lower level of Reaal GDP.
mov
vement up allong the sam
me production
n function too a higher levvel of Real G
GDP.
Question
n 6 (1 point))
Accordin
ng to new gro
owth theory, technologiccal advancess can be prom
moted
Question
n 6 options:
from
m within the economy.
if on
nly the right fiscal and monetary
m
policies are in pplace.
in a few rare casses.
through industriial policy.

ve
nonee of the abov
Question
n 7 (1 point))
When inccome taxes are
a lowered in a given ecconomy, it ccauses the suupply of laboor curve to shhift
________
___which __
__________
_ the equilibrrium quantitty of labor em
mployed. Inn terms of thhe
productio
on function (graphed
(
witth labor on the horizontaal axis and R
Real GDP onn the verticall
axis) thiss then causess _________
_______, wh
hich makes thhe LRAS cuurve shift ______________
resulting in ________
__________
______.
Question
n 7 options:
righ
htward; raises; the producction functio
on to shift uppward; rightw
ward; econoomic growth
leftw
ward; lowerss; the producction function to shift doownward; lefftward; a shrrinking econnomy
righ
htward; raises; a movemeent up along a given prodduction funcction; rightw
ward; econom
mic
grow
wth
righ
htward; raises; a movemeent down alo
ong a given pproduction ffunction; lefttward; a
shrin
nking econo
omy
Question
n 8 (1 point))
The rang
ge of laws, ru
ules, and reg
gulations thatt define the aallowed form
ms of use annd transfer off
resourcess is called th
he _________
__ structure of the econoomy.
Question
n 8 options:
mon
netary
prop
perty rights
micrroeconomic
maccroeconomic
Question
n 9 (1 point))
In contraast to neoclasssical growth
h theory, new
w growth theeory lays moore emphasis on
Question
n 9 options:
intan
ngibles than tangibles.
tang
gibles than in
ntangibles.
chan
nges in the money
m
supply
y than chang
ges in taxes.

fiscaal policy thaan monetary policy.

objeects than ideaas.
Question
n 10 (1 point)

Refer to Exhibit 17-1

1. If there aree 4 units of capital
c
and 6 units of labbor, _________ units of ooutput
(Real GD
DP) will be produced.
p
Question
n 10 options:
10
5
10.5
5
20
Question
n 11 (1 point)
___________________. E
Examples off human capital
Examples of physicaal capital incllude ______
_
__________
___________
_.
include ___________
Question
n 11 options:
know
wledge one picks
p
up thro
ough educattion and trainning; factories and compputers
macchines and faactories; chaiirs and desks
know
wledge one picks
p
up thro
ough educattion and expeerience; facttories and m
machines
macchines and faactories; kno
owledge one picks up thrrough educattion and training
Question
n 12 (1 point)
Research
h by Harvard
d economistss Barro and McCleary
M
reevealed that cchurch attenndance and
economicc growth hav
ve a(n) ____
___________
__ relationshhip. They allso found thaat specific
religious beliefs (in heaven,
h
hell, and afterlife
fe) and econoomic growthh have a(n) _____________
hip.
relationsh
Question
n 12 options:
inveerse; inverse
direct; direct

inveerse; direct
direct; inverse
n 13 (1 point)
Question
If an econ
nomy's stead
dy annual grrowth rate faalls from 2.5 percent to 22.0 percent, tthis adds
________
___ years to
o the time it takes
t
for thee economy too double in ssize.
Question
n 13 options:
24
7
5.3
10.2
2
Question
n 14 (1 point)
Neoclasssical growth theory placeed emphasis on two resoources:
Question
n 14 options:
capiital and entreepreneurship
p.
natu
ural resourcees and capital.
capiital and laborr.
labo
or and entrep
preneurship.
labo
or and naturaal resources.
Question
n 15 (1 point)
In the pro
oduction fun
nction Real GDP
G
= T (L,, K), the T sttands for taxx coefficient..
Question
n 15 options:
TRU
UE
FAL
LSE
Question
n 16 (1 point)

Neoclasssical growth theory emph

hasized how
w ___________ contributee to growth.
Question
n 16 options:
the resources
r
lab
bor and capiital
tech
hnological ch
hanges
goveernment poliicies
facto
ors limiting population growth
g
Question
n 17 (1 point)
nomist creditted with pion
neering the "new
"
growthh theory" is
The econ
Question
n 17 options:
Miltton Friedman
n.
Jia-T
Tzu Weng.
Paull Romer.
Juliaan Simon.
Question
n 18 (1 point)
G
is $6 billlion and thee population is 300,000, per-capita R
Real GDP is
If Real GDP
Question
n 18 options:
3000
00
2000
00
3333
33
3943
34
Question
n 19 (1 point)
Suppose that the prod
duction funcction for an economy
e
is ggraphed withh Real GDP on the vertical
axis and labor on the horizontal axis.
a
When the level of capital in thhis economy rises, it causses
________
__________
____which shifts the LR
RAS curve ______________ resulting iin
________
__________
______.
Question
n 19 options:
a mo
ovement dow
wn along a given
g
producction functioon; leftward; a shrinking economy

p
function
f
to sh
hift downwaard; leftwardd; a shrinkingg economy
the production
ovement up along a giveen production
n function; rrightward; ecconomic groowth
a mo
the production
p
function
f
to sh
hift upward;; rightward; economic grrowth
Question
n 20 (1 point)
When a production
p
function
fu
is grraphed with Real GDP oon the verticaal axis and laabor on the
horizontaal axis, a risee in labor __
___________
______________, and a rrise in capitaal
________
__________
__.
Question
n 20 options:
shift
fts the producction functio
on upward; also
a shifts the productionn function uppward
shift
fts the producction functio
on downward
d; shifts the production ffunction upw
ward
mov
ves us up alo
ong a given production
p
fu
unction; shiffts the produuction function upward
shift
fts the producction functio
on upward; moves
m
us up along a giveen productioon function
Question
n 21 (1 point)
The term
m economic growth
g
can be
b used in reference to abbsolute real economic grrowth or to ppercapita reaal economic growth.
Question
n 21 options:
TRU
UE
FAL
LSE
Question
n 22 (1 point)
Refer to Exhibit 17-1
1. If this pro
oduction funcction is grapphed with Reeal GDP on tthe vertical aaxis
and laborr on the horiizontal axis, and labor risses from 6 uunits to 7 uniits it would ccause a
Question
n 22 options:
shift
ft upward in the
t production function to a higher llevel of Reall GDP.
shift
ft downward in the produ
uction function to a loweer level of Reeal GDP.
mov
vement down
n along the same
s
producction functionn to a lower level of Reaal GDP.
mov
vement up allong the sam
me production
n function too a higher levvel of Real G
GDP.

Question
n 23 (1 point)
In the pro
oduction fun
nction, the vaariable K rep
presents hum
man capital.
Question
n 23 options:
TRU
UE
FAL
LSE
Question
n 24 (1 point)
An increaase in nomin
nal GDP
Question
n 24 options:
is ab
bsolute real economic
e
grrowth.
is peer capita reall economic growth.
g
is bo
oth per capitta and absolu
ute real econ
nomic growthh.
doess not necessaarily mean either absolutte or per cappita real econnomic growtth.
Question
n 25 (1 point)
An econo
omy growing
g at a steady
y rate of 3.5 percent
p
per yyear doubless in size approximately eevery
________
___ years.
Question
n 25 options:
40
20
28.6
6
16
Question
n 26 (1 point)
The Reall GDP of cou
untry X doub
bled in 20 yeears. It follows that the aannual grow
wth rate in
country X during thiss time period
d was
Question
n 26 options:
4.0 percent.
p

p
5.0 percent.
p
2.8 percent.
3.5 percent.
p
Question
n 27 (1 point)
Refer to Exhibit 17-2
2. Assume th
hat the startiing point is aalways pointt 1. Which oof the production
function graphs show
wn, (a) or (b)), represents an increase in the quanttity of labor,, and which
representts an increase in the quan
ntity of capittal, respectivvely?
Question
n 27 options:
(a); (a)
(b); (a)
(a); (b)
(b); (b)
n 28 (1 point)
Question
________
__________
_______ specifies the rellation betweeen technologgy and the fa
factor inputs to
output.
Question
n 28 options:
Neo
oclassical gro
owth theory
Metta-ideas
The LRAS curv
ve
A prroduction fu
unction
Question
n 29 (1 point)
When inccome taxes fall,
f the supp
ply of labor curve
c
shifts rightward, uultimately leaading to the
LRAS cu
urve shifting
g rightward (economic grrowth).
Question
n 29 options:
TRU
UE
FAL
LSE

Question
n 30 (1 point)
Economiists Barro an
nd McCleary
ys research
h regarding tthe impact of religious bbeliefs on
economicc growth notted that a belief in hell matters
m
moree to economiic growth thaan the belieff in
heaven.
Question
n 30 options:
TRU
UE
FAL
LSE