Question 1

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

Accepted Answer

Increasing income tax rates will decrease individuals' disposable income, leading to a decrease in spending and potentially slowing down economic growth. It may also discourage investment and entrepreneurship. Increasing savings rates can be achieved through other means, such as providing incentives for saving or implementing policies to decrease household debt.

Question 2

Last year, capital per hour of labor grew 6 percent. Increases in technology and human capital brought about a 3 percent increase in labor productivity. Using the one- third rule, what was the total increase in labor productivity last year?

Accepted Answer

The answer of Last year, capital per hour of labor...

Question 3

The demand curve for labor shows how many hours workers demand to work.

Accepted Answer

The demand curve for labor shows how many workers employers are willing to hire at a given wage rate. The supply curve for labor, on the other hand, shows how many hours workers are willing to work at a given wage rate.

Question 4

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.
a) What is 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 m

Accepted Answer

The answer of 
-The first table above gives the labor...

Question 5

The real wage rate measures the quantity of goods and services an hour's work will buy.

Accepted Answer

This is a correct definition of the real wage rate. It takes into account inflation and purchasing power, and provides a more accurate measure of the value of a worker's pay.

Question 6

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?

Accepted Answer

The answer of Real GDP equals $12 trillion and aggregate...

Question 7

Real GDP per person is slowly converging around the world.

Accepted Answer

The answer of Real GDP per person is slowly converging...

Question 8

The United States experienced a slowdown in economic growth during which of the following time periods?

Accepted Answer

During this time period, the United States experienced a period of stagflation, which is a combination of slow economic growth and high inflation. The oil crisis of the 1970s also contributed to this slowdown.

Question 9

The gap between real GDP per person in North and South America has been narrowing since 1980.

Accepted Answer

The gap between real GDP per person in North and South America has not consistently narrowed since 1980, as economic growth rates and development have varied significantly across countries in these regions.

Question 10

Last year, labor productivity increased 4 percent and capital per hour of labor grew 6 percent. How much of the increase in labor productivity was the result of the increase in capital per hour of labor and how much was the result of increases in technology and human capital?

Accepted Answer

The answer of Last year, labor productivity increased 4 percent...

Question 11

If capital per hour of labor growth is 3.6 percent and labor productivity growth is 4 percent, how much labor productivity growth can be attributed to capital growth?

Accepted Answer

The answer of If capital per hour of labor growth...

Question 12

Because the United States is a developed economy, every other country is catching up to the level of
U.S. real GDP per person.

Accepted Answer

While many countries are making progress towards increasing their real GDP per person, not every country is catching up to the level of the U.S. Some countries may have structural barriers or face other challenges that make it difficult for them to reach the same level of economic development as the U.S.

Question 13

The higher the real wage rate, the higher the labor force participation rate.

Accepted Answer

The answer of The higher the real wage rate, the...

Question 14

In general, a higher real wage rate decreases the quantity of labor supplied because fewer people enter the labor force.

Accepted Answer

A higher real wage rate actually increases the quantity of labor supplied because more people are willing to work at a higher wage.

Question 15

Economists are interested in long- term economic growth because growth increases real GDP per person and improves our standard of living.

Accepted Answer

Economists view long-term economic growth as crucial for increasing the overall real GDP per person and improving the standard of living. Higher GDP per capita generally leads to improved access to goods and services, lower rates of poverty, higher levels of education and health, and increased overall quality of life.

Question 16

The United States had the largest of real GDP per person until the 1990s when the Japan's real GDP per person overtook and then exceeded that in the United States.

Accepted Answer

The statement is false. According to historical data, the United States has had the highest real GDP per person throughout the 20th century and into the 21st century. Japan's real GDP per person did peak in the 1990s but it has never exceeded that of the United States.

Question 17

If the price level rises faster than the money wage rate, the real wage rate falls.

Accepted Answer

If the price level rises faster than the money wage rate, it means that prices are increasing faster than the wages. This results in a decrease in the purchasing power of the workers, which means that the real wage rate falls.

Question 18

-Use the one- third rule to fill in the blanks in the table above.

Accepted Answer

The answer of 
-Use the one- third rule to fill...

Question 19

Labor productivity has grown at almost the same rate each year over the last 40 years in the United States.

Accepted Answer

Labor productivity growth rates have fluctuated significantly over the last 40 years in the United States, influenced by factors such as technological advancements, economic cycles, and changes in labor market dynamics.

Question 20

Over the last 100 years, real GDP per person in the United States has grown at an average rate of approximately 2 percent per year.

Accepted Answer

This statement is true. Real GDP per person in the United States has grown at an average annual rate of approximately 2 percent for the past century.

Quiz 6: Economic Growth