For the average living standard of a nation to rise, the only thing that needs to happen is
for nominal GDP to increase faster than the price level.
A measure that economists use in order to keep track of employment is
a. the price level
b. real GDP per person
c. real GDP
d. the growth rate of output
e. the unemployment rate
Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are
two types of jokes, political jokes and jokes about celebrities. The number of jokes that
can be produced by each person in each category are listed in Figure 2-12. From this
table you can tell that
Figure 2-12
Refer to Figure 8-1. What would be the effect if the real wage was $2 above the
equilibrium wage?
a. There would be a shortage of 40 million workers and the wage rate would rise.
b. There would be a shortage of 20 million workers and the wage rate would rise.
c. There would be a surplus of 40 million workers and the wage rate would fall.
d. There would be a surplus of 20 million workers and the wage rate would fall.
e. The government would set a minimum wage.
The aggregate production function is the
a. relationship between the amount of labor employed in the economy and the total
amount of output produced
b. relationship between available labor and the total amount of output produced
c. the relationship between land and capital and labor employed in the economy
d. long-run equilibrium of the macroeconomy
e. amount of output any worker can produce given existing land and capital constraints
Which of the following is most likely to be a fixed input in the short run for Joe’s
Garage?
The federal government’s budget been in deficit every year since 1959.
If we know that the slope of the consumption function is 0.6, then we know that if real
disposable income increased by $1,000 billion, real consumption spending would
a. increase by $60 billion
b. increase by $1,000 billion
c. increase by $600 billion
d. increase by $6,000 billion
e. decrease by $6 billion
The larger the multiplier, the more stable the economy.
The costs of unemployment is (are)
a. foregone output and psychological effects
b. foregone output and physical effects
c. psychological and physical effects
d. foregone output, psychological effects and physical effects
e. foregone output
A movement along the AD curve down and to the right is caused by
a. a rightward shift of the money demand curve
b. falling consumer confidence
c. a decreasing price level
d. expansionary open market transactions by the Fed
e. a stable price level and increases in consumption, investment, or government
spending
Which of the following is more of a short-run than a long-run goal?
a. Increasing the capital stock
b. Encouraging investment in human capital
c. Moderating economic fluctuations
d. Stimulating economic growth
e. Increasing private investment
Refer to Figure 9-1. If labor supply shifts from S1to S2, what will happen to the real
hourly wage rate?
a. It will remain constant and employment will increase to 130 million
b. It will fall to $15 and employment will increase to 120 million
c. It will fall to $10 and employment will remain at 110 million
d. It will fall to $15 and employment will remain at 110 million
e. It will fall to $15 and employment will fall to 100 million
The labor market for ultrasound technicians in Cleveland is initially in equilibrium.
Which of the following would lead to a lower wage rate and higher employment in that
market?