Question 1

The marginal product of capital indicates ________.Therefore the MPK curve is also ________.

Accepted Answer

A) the quantity of capital supplied for a given rental price;the equilibrium price of capital 
B) the quantity of capital demanded for a given rental price;the demand curve of capital 
C) the quantity of capital demanded for a given rental price;the equilibrium price of capital 
D) the quantity of capital supplied for a given rental price;the supply curve of capital 
E) none of the above 
A) the quantity of capital supplied for a given rental price;the equilibrium price of capital 
B) the quantity of capital demanded for a given rental price;the demand curve of capital 
C) the quantity of capital demanded for a given rental price;the equilibrium price of capital 
D) the quantity of capital supplied for a given rental price;the supply curve of capital 
E) none of the above B

Question 2

The marginal product of labor indicates ________.Therefore the MPL curve is also ________.

Accepted Answer

A) the quantity of labor supplied for a given wage;the equilibrium price of labor 
B) the quantity of labor demanded for a given wage;the equilibrium price of labor 
C) the quantity of labor demanded for a given wage;the demand curve of labor 
D) the quantity of labor supplied for a given wage;the supply curve of labor 
E) none of the above 
A) the quantity of labor supplied for a given wage;the equilibrium price of labor 
B) the quantity of labor demanded for a given wage;the equilibrium price of labor 
C) the quantity of labor demanded for a given wage;the demand curve of labor 
D) the quantity of labor supplied for a given wage;the supply curve of labor 
E) none of the above C

Question 3

What do we learn from the shape of the Cobb-Douglas production function?

Accepted Answer

A) its slope falls as capital gets added 
B) the marginal product of capital declines as the capital stock increases 
C) there are diminishing returns to capital 
D) all of the above 
E) none of the above 
A) its slope falls as capital gets added 
B) the marginal product of capital declines as the capital stock increases 
C) there are diminishing returns to capital 
D) all of the above 
E) none of the above D

Question 4

If the quantities of labor and capital in an economy each increase by the same x percent,which of the following will increase by x percent?

Accepted Answer

A) marginal product of capital 
B) economic profits 
C) share of capital income in national income 
D) rental price of capital 
E) none of the above 
A) marginal product of capital 
B) economic profits 
C) share of capital income in national income 
D) rental price of capital 
E) none of the above

Question 5

Which of the following is an example of an adverse supply shock?

Accepted Answer

A) OPEC cuts oil production 
B) a large oil spill in the Gulf of Mexico 
C) a devastating hurricane off the Louisiana coast 
D) all of the above 
E) none of the above 
A) OPEC cuts oil production 
B) a large oil spill in the Gulf of Mexico 
C) a devastating hurricane off the Louisiana coast 
D) all of the above 
E) none of the above

Question 6

Diminishing marginal product means that ________.

Accepted Answer

A) when adding extra units of a single input,output increases become smaller 
B) when adding extra units of a single input,output increases become larger 
C) when adding extra units of a single input,output declines 
D) the amount of output increases when we add more inputs 
E) none of the above 
A) when adding extra units of a single input,output increases become smaller 
B) when adding extra units of a single input,output increases become larger 
C) when adding extra units of a single input,output declines 
D) the amount of output increases when we add more inputs 
E) none of the above

Question 7

Key influences on the valuation of economic profits include ________.

Accepted Answer

A) the average level of the prices of goods and services sold 
B) the rental price of capital 
C) the wage rate 
D) all of the above 
E) none of the above 
A) the average level of the prices of goods and services sold 
B) the rental price of capital 
C) the wage rate 
D) all of the above 
E) none of the above

Question 8

Use the Cobb-Douglas production function to explain why even massive movements of labor and capital across national borders may have little impact on differences in per capita income.

Accepted Answer

Relatively low per capita income may be

Question 9

The marginal product of capital (MPK)is given by the ________.

Accepted Answer

A) capital share of income + average output per unit of capital 
B) capital share of income - average output per unit of capital 
C) capital share of income ÷ average output per unit of capital 
D) capital share of income × average output per unit of capital 
E) none of the above 
A) capital share of income + average output per unit of capital 
B) capital share of income - average output per unit of capital 
C) capital share of income ÷ average output per unit of capital 
D) capital share of income × average output per unit of capital 
E) none of the above

Question 10

Which of the following is true about labor productivity?

Accepted Answer

A) it is the amount of total factor productivity (TFP)per unit of labor 
B) it is more difficult to measure than TFP 
C) it is a more general and better measure of productivity than TFP 
D) all of the above 
E) none of the above 
A) it is the amount of total factor productivity (TFP)per unit of labor 
B) it is more difficult to measure than TFP 
C) it is a more general and better measure of productivity than TFP 
D) all of the above 
E) none of the above

Question 11

An example of a supply shock could be ________.

Accepted Answer

A) a technological innovation 
B) a natural disaster 
C) an oil price increase 
D) all of the above 
E) none of the above 
A) a technological innovation 
B) a natural disaster 
C) an oil price increase 
D) all of the above 
E) none of the above

Question 12

What do you think would be the Cobb-Douglas single best prescription for poor countries to catch up with the rich?

Accepted Answer

A) to increase their stock of capital 
B) to increase their labor force 
C) to find more efficient ways to allocate and use capital and labor 
D) to ask help of the rich countries 
E) none of the above 
A) to increase their stock of capital 
B) to increase their labor force 
C) to find more efficient ways to allocate and use capital and labor 
D) to ask help of the rich countries 
E) none of the above

Question 13

Which of the following is true about labor productivity?

Accepted Answer

A) it is the amount of output produced per unit of labor 
B) it is easier to measure than total factor productivity (TFP) 
C) it is more commonly mentioned in the media than total factor productivity (TFP) 
D) all of the above 
E) none of the above 
A) it is the amount of output produced per unit of labor 
B) it is easier to measure than total factor productivity (TFP) 
C) it is more commonly mentioned in the media than total factor productivity (TFP) 
D) all of the above 
E) none of the above

Question 14

Suppose than an economy has output Y = A  
 
,that Y equals $19 trillion,capital K is $27 trillion,and labor L is 125 million workers.Given this information,what is the closest approximation of total factor productivity A?

Accepted Answer

A) less than 0.01 
B) around 0.25 
C) roughly 0.33 
D) close to 0.4 
E) exactly 144 
A) less than 0.01 
B) around 0.25 
C) roughly 0.33 
D) close to 0.4 
E) exactly 144

Question 15

Since the 1980s,China's output per person has increased tremendously.Which of these possible contributors to economic growth in China is a good example of a positive supply shock?

Accepted Answer

A) high levels of saving and investment 
B) declining rate of population growth 
C) rising consumption of energy 
D) all of the above 
E) none of the above 
A) high levels of saving and investment 
B) declining rate of population growth 
C) rising consumption of energy 
D) all of the above 
E) none of the above

Question 16

The marginal product of capital (MPK)measures ________.

Accepted Answer

A) by how much output increases for each additional unit of capital 
B) by how much capital increases for each additional unit of output 
C) by how much capital increases for each additional unit of labor 
D) by how much total factor productivity increases for each additional unit of capital 
E) none of the above 
A) by how much output increases for each additional unit of capital 
B) by how much capital increases for each additional unit of output 
C) by how much capital increases for each additional unit of labor 
D) by how much total factor productivity increases for each additional unit of capital 
E) none of the above

Question 17

The marginal product of capital (MPK)can be calculated from the following ________.

Accepted Answer

A) the capital share of income and the average output per unit of capital 
B) the capital share of income and average capital per worker 
C) output and capital 
D) the capital share of income and output 
E) none of the above 
A) the capital share of income and the average output per unit of capital 
B) the capital share of income and average capital per worker 
C) output and capital 
D) the capital share of income and output 
E) none of the above

Question 18

Which of the following is true about total factor productivity (TFP)?

Accepted Answer

A) it can be measured just like capital and labor 
B) it cannot be directly measured so it has to be calculated from given values of capital,labor and output 
C) while it cannot be measured directly,it has an exponent of 0.3 in the Cobb-Douglas production function 
D) while it cannot be measured directly,it has an exponent of 0.7 in the Cobb-Douglas production function 
E) none of the above 
A) it can be measured just like capital and labor 
B) it cannot be directly measured so it has to be calculated from given values of capital,labor and output 
C) while it cannot be measured directly,it has an exponent of 0.3 in the Cobb-Douglas production function 
D) while it cannot be measured directly,it has an exponent of 0.7 in the Cobb-Douglas production function 
E) none of the above

Question 19

Suppose that reduced barriers to international financial transactions cause an increase in the economy's supply of capital.Explain,step-by-step,how the economy adjusts to arrive at a new long-run equilibrium.

Accepted Answer

The increase in the supply of capital (r

Question 20

The three oil shocks the U.S.experienced in 1973-1974,1979-1980 and 2007-2008 had a consistent result ________.

Accepted Answer

A) a decline in the MPK 
B) a decline in the real rental price of capital 
C) a decline in stock prices 
D) all of the above 
E) none of the above 
A) a decline in the MPK 
B) a decline in the real rental price of capital 
C) a decline in stock prices 
D) all of the above 
E) none of the above

Exam 3: Aggregate Production and Productivity

The marginal product of capital indicates ________.Therefore the MPK curve is also ________.

The marginal product of labor indicates ________.Therefore the MPL curve is also ________.

What do we learn from the shape of the Cobb-Douglas production function?

If the quantities of labor and capital in an economy each increase by the same x percent,which of the following will increase by x percent?

Which of the following is an example of an adverse supply shock?

Diminishing marginal product means that ________.

Key influences on the valuation of economic profits include ________.

Use the Cobb-Douglas production function to explain why even massive movements of labor and capital across national borders may have little impact on differences in per capita income.

The marginal product of capital (MPK)is given by the ________.

Which of the following is true about labor productivity?

An example of a supply shock could be ________.

What do you think would be the Cobb-Douglas single best prescription for poor countries to catch up with the rich?

Which of the following is true about labor productivity?

Suppose than an economy has output Y = A ,that Y equals $19 trillion,capital K is $27 trillion,and labor L is 125 million workers.Given this information,what is the closest approximation of total factor productivity A?

Since the 1980s,China's output per person has increased tremendously.Which of these possible contributors to economic growth in China is a good example of a positive supply shock?

The marginal product of capital (MPK)measures ________.

The marginal product of capital (MPK)can be calculated from the following ________.

Which of the following is true about total factor productivity (TFP)?

Suppose that reduced barriers to international financial transactions cause an increase in the economy's supply of capital.Explain,step-by-step,how the economy adjusts to arrive at a new long-run equilibrium.

The three oil shocks the U.S.experienced in 1973-1974,1979-1980 and 2007-2008 had a consistent result ________.

The Policy and Practice of Macroeconomics

Measuring Macroeconomic Data

Saving and Investment in Closed and Open Economies

Money and Inflation

The Sources of Growth and the Solow Model

Drivers of Growth: Technology, policy, and Institutions

Business Cycles: an Introduction

The Is Curve

Monetary Policy and Aggregate Demand

Aggregate Supply and the Phillips Curve

The Aggregate Demand and Supply Model

Macroeconomic Policy and Aggregate Demand and Supply Analysis

The Financial System and Economic Growth

Financial Crises and the Economy

Fiscal Policy and the Government Budget

Exchange Rates and International Economic Policy

Consumption and Saving

Investment

The Labor Market, employment, and Unemployment

The Role of Expectations in Macroeconomic Policy

Modern Business Cycle Theory

Filters

The marginal product of capital indicates .Therefore the MPK curve is also .

The marginal product of labor indicates .Therefore the MPL curve is also .