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| 1 | |
The primary argument supporting economic growth is that growth: |
| | A) | reduces spillover costs such as pollution |
| | B) | reduces the "problem of the commons" |
| | C) | is the path to higher living standards |
| | D) | increases job security |
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| 2 | |
Which of the following sources of economic growth is a demand-side factor? |
| | A) | higher spending on rising output |
| | B) | improved technology |
| | C) | utilizing resources in the least costly way |
| | D) | increases in the quantity of human resources |
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| 3 | |
Economic growth has caused the relative prices of most basic natural resources to increase. |
| | A) | True |
| | B) | False |
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| 4 | |
Of the following sources of economic growth, which would cause an outward shift of the economy's production possibilities curve? |
| | A) | higher spending on rising output |
| | B) | utilizing resources in the least costly way |
| | C) | producing the combination of goods and services that achieves allocative efficiency |
| | D) | improvements in technology |
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| 5 | |
Over the past year, suppose an economy's labor productivity decreased by 2% while its total hours of work decreased by 2%. We could conclude this economy's: |
| | A) | production possibilities curve shifted to the left |
| | B) | long-run aggregate supply curve shifted to the right |
| | C) | real GDP remained constant |
| | D) | capital stock increased by 2% |
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| 6 | |
If labor productivity is 25 units of output per hour of work and hours of work totaled 100, real GDP is 2500. |
| | A) | True |
| | B) | False |
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| 7 | |
Over the past year, suppose an economy's hours of work rose by 4% while labor productivity remained constant. We could conclude that this economy's: |
| | A) | long-run aggregate supply curve shifted to the left |
| | B) | real GDP increase by 2% |
| | C) | total spending increased by 4% |
| | D) | production possibilities curve shifted outwards |
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| 8 | |
Over the past year, suppose an economy's hours of work have increased by 1% and its labor productivity has increased by 3%. We could conclude that this economy's real GDP has increased by about: |
| | A) | .03% |
| | B) | 2% |
| | C) | 3% |
| | D) | 4% |
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| 9 | |
Use the following diagram to answer the next question.
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Refer to the diagram. Over the past decade, the aggregate supply and aggregate demand curves have shifted outward as shown in the diagram. We can conclude that: |
| | A) | nominal GDP and real GDP grew at the same rate |
| | B) | nominal GDP grew at a faster rate than real GDP |
| | C) | real GDP grew at a faster rate than nominal GDP |
| | D) | although nominal GDP increased, real GDP decreased |
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| 10 | |
If aggregate demand increases at a faster rate than long-run aggregate supply: |
| | A) | the economy will enter a recession |
| | B) | the production possibilities curve will shift to the left |
| | C) | there will be upward pressure on the price level |
| | D) | the Fed will be tempted to lower interest rates |
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