Question 1
When a production function is graphed with Real GDP on the vertical axis and
labor on the horizontal axis, a rise in labor ________________________, and a
rise in the technology coefficient __________________.
shifts the production function downward; shifts the production function
upward
Correct
moves us up along a given production function; shifts the production function
upward
shifts the production function upward; moves us up along a given production
function
shifts the production function upward; also shifts the production function
upward
Question 2
Higher income taxes cause a ____________shift of the labor supply curve,
which then produces__________ Real GDP.
Correct!
leftward; less
rightward; more
rightward; less
leftward; more
Question 3
Neoclassical growth theory does not emphasize how __________ contribute to
growth.
factors limiting population growth
the quantity of capital
the quantity of labor
technological changes
Question 4
In contrast to neoclassical growth theory, new growth theory lays more
emphasis on
changes in the money supply than changes in taxes
objects than ideas.
,fiscal policy than monetary policy.ct!
intangibles than tangibles.
tangibles than intangibles.
Question 5
Technological advances make it possible to
lower labor productivity.
obtain the same output by using more resources.
produce goods without using any resources.
obtain the same output by using fewer resources.
Question 6
,Refer to Exhibit 17-
, 3.
Assume that the starting point on the production function is point A. After an
increase in the quantity of labor, there would be a ______________________
which would shift the LRAS curve from LRAS1 to _______________ resulting in
_______________.
shifting upward of the production function to point B; LRAS2; economic
growth
Correct!
movement along the production function to point C; LRAS2; economic growth
shifting upward of the production function to point B; LRAS3; a shrinking
economy
movement along the production function to point C; LRAS3; a shrinking
economy
Question 7
If the (average) tax rate falls by 30% and as a result the tax base rises by
40%, then tax revenues will
There is not enough information given to answer this question.
You Answered
remain unchanged.
decline.
rise.
Question 8
Economist A believes that the elasticity of investment is 0.76 while
economist B believes that the elasticity of investment is 1.76. Which
economist, A or B, is more likely to believe that a change in the interest rate
will change the current economic environment?
Correct!
Economist B, since she believes that investment is more sensitive to changes
in interest rates than does economist A.
Economist A, since she believes that investment is more sensitive to changes
in interest rates than does economist B.
Economist B, since she believes that investment is less sensitive to changes
in interest rates than does economist A.
Economist A, since she believes that investment is less sensitive to changes
in interest rates than does economist B.
Question 9
When a production function is graphed with Real GDP on the vertical axis and
labor on the horizontal axis, a rise in labor ________________________, and a
rise in the technology coefficient __________________.
shifts the production function downward; shifts the production function
upward
Correct
moves us up along a given production function; shifts the production function
upward
shifts the production function upward; moves us up along a given production
function
shifts the production function upward; also shifts the production function
upward
Question 2
Higher income taxes cause a ____________shift of the labor supply curve,
which then produces__________ Real GDP.
Correct!
leftward; less
rightward; more
rightward; less
leftward; more
Question 3
Neoclassical growth theory does not emphasize how __________ contribute to
growth.
factors limiting population growth
the quantity of capital
the quantity of labor
technological changes
Question 4
In contrast to neoclassical growth theory, new growth theory lays more
emphasis on
changes in the money supply than changes in taxes
objects than ideas.
,fiscal policy than monetary policy.ct!
intangibles than tangibles.
tangibles than intangibles.
Question 5
Technological advances make it possible to
lower labor productivity.
obtain the same output by using more resources.
produce goods without using any resources.
obtain the same output by using fewer resources.
Question 6
,Refer to Exhibit 17-
, 3.
Assume that the starting point on the production function is point A. After an
increase in the quantity of labor, there would be a ______________________
which would shift the LRAS curve from LRAS1 to _______________ resulting in
_______________.
shifting upward of the production function to point B; LRAS2; economic
growth
Correct!
movement along the production function to point C; LRAS2; economic growth
shifting upward of the production function to point B; LRAS3; a shrinking
economy
movement along the production function to point C; LRAS3; a shrinking
economy
Question 7
If the (average) tax rate falls by 30% and as a result the tax base rises by
40%, then tax revenues will
There is not enough information given to answer this question.
You Answered
remain unchanged.
decline.
rise.
Question 8
Economist A believes that the elasticity of investment is 0.76 while
economist B believes that the elasticity of investment is 1.76. Which
economist, A or B, is more likely to believe that a change in the interest rate
will change the current economic environment?
Correct!
Economist B, since she believes that investment is more sensitive to changes
in interest rates than does economist A.
Economist A, since she believes that investment is more sensitive to changes
in interest rates than does economist B.
Economist B, since she believes that investment is less sensitive to changes
in interest rates than does economist A.
Economist A, since she believes that investment is less sensitive to changes
in interest rates than does economist B.
Question 9
