Question 1

The two main characteristics of the production function are

Accepted Answer

A) it slopes downward from left to right, and the slope becomes flatter as the input increases. 
B) it slopes upward from left to right, and the slope becomes steeper as the input increases. 
C) it slopes upward from left to right, and the slope becomes flatter as the input increases. 
D) it slopes downward from left to right, and the slope becomes steeper as the input increases. 
A) it slopes downward from left to right, and the slope becomes flatter as the input increases. 
B) it slopes upward from left to right, and the slope becomes steeper as the input increases. 
C) it slopes upward from left to right, and the slope becomes flatter as the input increases. 
D) it slopes downward from left to right, and the slope becomes steeper as the input increases.

Question 2

A permanent increase in the real wage rate has a ________ income effect on labor supply than a temporary increase in the real wage,so labor supply is ________ with a permanent wage increase than for a temporary wage increase.

Accepted Answer

A) larger; more 
B) larger; less 
C) smaller; more 
D) smaller; less 
A) larger; more 
B) larger; less 
C) smaller; more 
D) smaller; less

Question 3

Suppose the marginal product of labor is MPN = 200 - 0.5N
Where N is aggregate employment.The aggregate quantity of labor supplied is 100 + 4w,where w is the real wage.The government imposes a minimum wage of 60.How much unemployment will this create among unskilled labor?

Accepted Answer

A) 0 
B) 60 
C) 80 
D) 100 
A) 0 
B) 60 
C) 80 
D) 100

Question 4

A person is more likely to increase labor supply in response to an increase in the real wage,the ________ is the income effect and the ________ is the substitution effect.

Accepted Answer

A) larger; larger 
B) larger; smaller 
C) smaller; larger 
D) smaller; smaller 
A) larger; larger 
B) larger; smaller 
C) smaller; larger 
D) smaller; smaller

Question 5

What is the participation rate if there are 125 million people in the labor force,100 million people employed,and 25 million not in the labor force?

Accepted Answer

A) 83% 
B) 80% 
C) 75% 
D) 67% 
A) 83% 
B) 80% 
C) 75% 
D) 67%

Question 6

According to Okun's law,if output grew 7% and full-employment output rose 5%,what would be the change in the unemployment rate?

Accepted Answer

A) -4 percentage points 
B) -1 percentage point 
C) 1 percentage point 
D) 4 percentage points 
A) -4 percentage points 
B) -1 percentage point 
C) 1 percentage point 
D) 4 percentage points

Question 7

The aggregate supply of labor is the

Accepted Answer

A) total amount of time a person works over his or her lifetime. 
B) total amount of time a person spends in the labor force over his or her lifetime. 
C) unemployment rate. 
D) sum of the labor supplied by everyone in the economy. 
A) total amount of time a person works over his or her lifetime. 
B) total amount of time a person spends in the labor force over his or her lifetime. 
C) unemployment rate. 
D) sum of the labor supplied by everyone in the economy.

Question 8

Suppose the economy's production function is Y = AK0.3N0.7.If K = 2000,N = 100,and A = 1,then Y = 246.If K and N each increase by 5 percent,and A is unchanged,by how much does Y increase?

Accepted Answer

A) 5% 
B) 10% 
C) 15% 
D) 20% 
A) 5% 
B) 10% 
C) 15% 
D) 20%

Question 9

Suppose the marginal product of labor is MPN = 200 - 0.5N
Where N is aggregate employment.The aggregate quantity of labor supplied is 300 + 8w,where w is the real wage.If a supply shock increases the marginal product of labor by 10 (to MPN = 210 - 0.5 N),by how much does employment increase?

Accepted Answer

A) 0 
B) 4 
C) 8 
D) 16 
A) 0 
B) 4 
C) 8 
D) 16

Question 10

How many people are unemployed if the employment ratio is 75%,there are 90 million people employed,and there are 20 million people not in the labor force?

Accepted Answer

A) 20 million 
B) 10 million 
C) 5 million 
D) 0 million 
A) 20 million 
B) 10 million 
C) 5 million 
D) 0 million

Question 11

In April 2000,the United States had a labor force of 141,230,000,employment of 135,706,000,and there were 67,986,000 people not in the labor force (all numbers rounded to the nearest 1000).
(a)Calculate the unemployment rate.
(b)Calculate the participation rate.
(c)Calculate the employment ratio.

Accepted Answer

(a)Unemployment = labor force - employme

Question 12

Suppose the marginal product of labor is MPN = 200 - 0.5N
Where N is aggregate employment.The aggregate quantity of labor supplied is 100 + 4w,where w is the real wage.The government imposes a minimum wage of 60.What is the quantity of employment?

Accepted Answer

A) 240 
B) 260 
C) 280 
D) 300 
A) 240 
B) 260 
C) 280 
D) 300

Question 13

Assuming that the growth rate of full-employment output is 3%,and that the actual unemployment rate fell 2 percentage points in the last year,Okun's Law predicts that output growth rate over the past year was

Accepted Answer

A) -1% 
B) 3% 
C) 5% 
D) 7% 
A) -1% 
B) 3% 
C) 5% 
D) 7%

Question 14

An invention that speeds up the Internet is an example of

Accepted Answer

A) an income effect. 
B) an increase in labor. 
C) a substitution effect. 
D) a supply shock. 
A) an income effect. 
B) an increase in labor. 
C) a substitution effect. 
D) a supply shock.

Question 15

Suppose the economy's production function is Y = AK0.3N0.7.If K = 2000,N = 100,and A = 1,then Y = 246.If A rises by 10 percent,and K and N are unchanged,by how much does Y increase?

Accepted Answer

A) 5% 
B) 10% 
C) 15% 
D) 20% 
A) 5% 
B) 10% 
C) 15% 
D) 20%

Question 16

Assume that the full-employment level of output is $5000 billion and the natural unemployment rate is 5%.Suppose the current unemployment rate is 8%.What would be the current level of output according to Okun's law (when the Okun's law coefficient is 2)?

Accepted Answer

A) $4500 billion 
B) $4700 billion 
C) $4900 billion 
D) $5000 billion 
A) $4500 billion 
B) $4700 billion 
C) $4900 billion 
D) $5000 billion

Question 17

A decrease in the number of workers hired by a firm could result from

Accepted Answer

A) an increase in the marginal product of labor. 
B) an increase in the marginal revenue product of labor. 
C) an increase in the real wage. 
D) a decrease in the real wage. 
A) an increase in the marginal product of labor. 
B) an increase in the marginal revenue product of labor. 
C) an increase in the real wage. 
D) a decrease in the real wage.

Question 18

An increase in the real wage would result in a

Accepted Answer

A) movement along the labor demand curve, causing an increase in the number of workers hired by the firm. 
B) shift of the labor demand curve, causing an increase in the number of workers hired by the firm. 
C) movement along the labor demand curve, causing a decrease in the number of workers hired by the firm. 
D) shift of the labor demand curve, causing a decrease in the number of workers hired by the firm. 
A) movement along the labor demand curve, causing an increase in the number of workers hired by the firm. 
B) shift of the labor demand curve, causing an increase in the number of workers hired by the firm. 
C) movement along the labor demand curve, causing a decrease in the number of workers hired by the firm. 
D) shift of the labor demand curve, causing a decrease in the number of workers hired by the firm.

Question 19

The table below represents Freedonia's macroeconomic data for Year 1 and Year 2.  
Suppose that the production function is given by Y = AK0.25N0.75.Between Year 1 and Year 2,total factor productivity of Freedonia's economy increased by

Accepted Answer

A) -1.5%. 
B) 5)0%. 
C) 5)5%. 
D) 12.7%. 
A) -1.5%. 
B) 5)0%. 
C) 5)5%. 
D) 12.7%.

Question 20

A supply shock that reduces total factor productivity directly affects which term in the production function Y = AF(K,N)?

Accepted Answer

A) A 
B) F 
C) K 
D) N 
A) A 
B) F 
C) K 
D) N

The two main characteristics of the production function are

A permanent increase in the real wage rate has a income effect on labor supply than a temporary increase in the real wage,so labor supply is with a permanent wage increase than for a temporary wage increase.

Suppose the marginal product of labor is MPN = 200 - 0.5N Where N is aggregate employment.The aggregate quantity of labor supplied is 100 + 4w,where w is the real wage.The government imposes a minimum wage of 60.How much unemployment will this create among unskilled labor?

A person is more likely to increase labor supply in response to an increase in the real wage,the is the income effect and the is the substitution effect.

What is the participation rate if there are 125 million people in the labor force,100 million people employed,and 25 million not in the labor force?

According to Okun's law,if output grew 7% and full-employment output rose 5%,what would be the change in the unemployment rate?

The aggregate supply of labor is the

Suppose the economy's production function is Y = AK^0.3^N^0.7^.If K = 2000,N = 100,and A = 1,then Y = 246.If K and N each increase by 5 percent,and A is unchanged,by how much does Y increase?

Suppose the marginal product of labor is MPN = 200 - 0.5N Where N is aggregate employment.The aggregate quantity of labor supplied is 300 + 8w,where w is the real wage.If a supply shock increases the marginal product of labor by 10 (to MPN = 210 - 0.5 N),by how much does employment increase?

How many people are unemployed if the employment ratio is 75%,there are 90 million people employed,and there are 20 million people not in the labor force?

In April 2000,the United States had a labor force of 141,230,000,employment of 135,706,000,and there were 67,986,000 people not in the labor force (all numbers rounded to the nearest 1000). (a)Calculate the unemployment rate. (b)Calculate the participation rate. (c)Calculate the employment ratio.

Suppose the marginal product of labor is MPN = 200 - 0.5N Where N is aggregate employment.The aggregate quantity of labor supplied is 100 + 4w,where w is the real wage.The government imposes a minimum wage of 60.What is the quantity of employment?

Assuming that the growth rate of full-employment output is 3%,and that the actual unemployment rate fell 2 percentage points in the last year,Okun's Law predicts that output growth rate over the past year was

An invention that speeds up the Internet is an example of

Suppose the economy's production function is Y = AK^0.3^N^0.7^.If K = 2000,N = 100,and A = 1,then Y = 246.If A rises by 10 percent,and K and N are unchanged,by how much does Y increase?

Assume that the full-employment level of output is $5000 billion and the natural unemployment rate is 5%.Suppose the current unemployment rate is 8%.What would be the current level of output according to Okun's law (when the Okun's law coefficient is 2)?

A decrease in the number of workers hired by a firm could result from

An increase in the real wage would result in a

The table below represents Freedonia's macroeconomic data for Year 1 and Year 2. Suppose that the production function is given by Y = AK^0.25^N^0.75^.Between Year 1 and Year 2,total factor productivity of Freedonia's economy increased by

A supply shock that reduces total factor productivity directly affects which term in the production function Y = AF(K,N)?

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 3: Productivity, output, and Employment

The two main characteristics of the production function are

A permanent increase in the real wage rate has a ________ income effect on labor supply than a temporary increase in the real wage,so labor supply is ________ with a permanent wage increase than for a temporary wage increase.

Suppose the marginal product of labor is MPN = 200 - 0.5N Where N is aggregate employment.The aggregate quantity of labor supplied is 100 + 4w,where w is the real wage.The government imposes a minimum wage of 60.How much unemployment will this create among unskilled labor?

A person is more likely to increase labor supply in response to an increase in the real wage,the ________ is the income effect and the ________ is the substitution effect.

What is the participation rate if there are 125 million people in the labor force,100 million people employed,and 25 million not in the labor force?

According to Okun's law,if output grew 7% and full-employment output rose 5%,what would be the change in the unemployment rate?

The aggregate supply of labor is the

Suppose the economy's production function is Y = AK0.3N0.7.If K = 2000,N = 100,and A = 1,then Y = 246.If K and N each increase by 5 percent,and A is unchanged,by how much does Y increase?

Suppose the marginal product of labor is MPN = 200 - 0.5N Where N is aggregate employment.The aggregate quantity of labor supplied is 300 + 8w,where w is the real wage.If a supply shock increases the marginal product of labor by 10 (to MPN = 210 - 0.5 N),by how much does employment increase?

How many people are unemployed if the employment ratio is 75%,there are 90 million people employed,and there are 20 million people not in the labor force?

In April 2000,the United States had a labor force of 141,230,000,employment of 135,706,000,and there were 67,986,000 people not in the labor force (all numbers rounded to the nearest 1000). (a)Calculate the unemployment rate. (b)Calculate the participation rate. (c)Calculate the employment ratio.

Suppose the marginal product of labor is MPN = 200 - 0.5N Where N is aggregate employment.The aggregate quantity of labor supplied is 100 + 4w,where w is the real wage.The government imposes a minimum wage of 60.What is the quantity of employment?

Assuming that the growth rate of full-employment output is 3%,and that the actual unemployment rate fell 2 percentage points in the last year,Okun's Law predicts that output growth rate over the past year was

An invention that speeds up the Internet is an example of

Suppose the economy's production function is Y = AK0.3N0.7.If K = 2000,N = 100,and A = 1,then Y = 246.If A rises by 10 percent,and K and N are unchanged,by how much does Y increase?

Assume that the full-employment level of output is $5000 billion and the natural unemployment rate is 5%.Suppose the current unemployment rate is 8%.What would be the current level of output according to Okun's law (when the Okun's law coefficient is 2)?

A decrease in the number of workers hired by a firm could result from

An increase in the real wage would result in a

The table below represents Freedonia's macroeconomic data for Year 1 and Year 2. Suppose that the production function is given by Y = AK0.25N0.75.Between Year 1 and Year 2,total factor productivity of Freedonia's economy increased by

A supply shock that reduces total factor productivity directly affects which term in the production function Y = AF(K,N)?

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

A permanent increase in the real wage rate has a income effect on labor supply than a temporary increase in the real wage,so labor supply is with a permanent wage increase than for a temporary wage increase.

A person is more likely to increase labor supply in response to an increase in the real wage,the is the income effect and the is the substitution effect.

Suppose the economy's production function is Y = AK^0.3^N^0.7^.If K = 2000,N = 100,and A = 1,then Y = 246.If K and N each increase by 5 percent,and A is unchanged,by how much does Y increase?

Suppose the economy's production function is Y = AK^0.3^N^0.7^.If K = 2000,N = 100,and A = 1,then Y = 246.If A rises by 10 percent,and K and N are unchanged,by how much does Y increase?

The table below represents Freedonia's macroeconomic data for Year 1 and Year 2. Suppose that the production function is given by Y = AK^0.25^N^0.75^.Between Year 1 and Year 2,total factor productivity of Freedonia's economy increased by