宏观经济学chap07习题

Macroeconomics, 8e (Parkin) Testbank 1Chapter 7 At Full Employment: The Classical Model7.1 The Classical Model: A Preview1) R eal variablesA) a re those that determine the cost of living.B) a re those that determine economic well-being.C) i nclude variables such as the price level and inflation rate.D) N one of the above answers is correct.Answer: BTopic: R eal VariablesSkill: R ecognition2) A ll of the following are real variables, exceptA) t he price levelB) s avingC) e mploymentD) i nvestmentAnswer: ATopic: R eal VariablesSkill: C onceptual*3) A n example of a nominal variable isA) t he level of unemployment.B) t he price level.C) a ggregate working hours.D) t he real wage rate.Answer: BTopic: N ominal VariablesSkill: R ecognition4) N ominal variables are expressed in terms ofA) d eflated values.B) c onstant values.C) d ollar values.D) b ase year values.Answer: CTopic: N ominal VariablesSkill: R ecognition5) T he classical dichotomy is a discovery that statesA) r eal and nominal variables are actually the same thing.B) w hen the economy is at full employment, the forces that determine the real variables areindependent of those that determine the nominal variables.C) t hroughout the business cycle, the forces that determine the real variables areindependent of those that determine the nominal variables.D) o nly nominal variables cause business cycles.Answer: BTopic: C lassical DichotomySkill: R ecognition6) T he classical dichotomy holds trueA) w hen there is full employment.B) o nly if there is inflation.C) w hen the economy is not at full employment.D) o ver all parts of the business cycle.Answer: ATopic: C lassical DichotomySkill: R ecognition7) T he classical dichotomy applies when the economy only when the economyA) i s at full employment.B) h as less than full employment.C) i s in a recession.D) h as more than full employment.Answer: ATopic: C lassical DichotomySkill: R ecognition8) T he classical dichotomy does not applyA) w hen the economy is at full employment.B) w hen the economy is in a business cycle recession.C) a t any time in the real world.D) None of the above answers is correct because the classical dichotomy always applies.Answer: BTopic: C lassical DichotomySkill: R ecognition9) I f we want to compare why real GDP is vastly different between two nations, the classicaldichotomy means that we have to examineA) o nly the differences in the price levels and inflation rates of the two nations.B) o nly the differences in the real parts of the two nations.C) b oth the real parts and the nominal variables of the two nations.D) N one of the above answers is correct.Answer: BTopic: C lassical DichotomySkill: C onceptual10) T he classical dichotomy means that the factors that determine the inflation rate areindependent of the factors that determineA) r eal economic growth.B) n ominal GDP.C) t he nominal wage rate.D) a ll nominal variables.Answer: ATopic: C lassical DichotomySkill: C onceptual7.2 Real GDP and Employment1) W hich of the following correctly describe the PPF between leisure and real GDP?I) The PPF shows the boundary between amounts of goods and services that can beproduced versus those that cannot be produced.II) The PPF displays decreasing opportunity costs.A) I onlyB) I I onlyC) b oth I and IID) n either I nor IIAnswer: ATopic: P PFSkill: C onceptual2) C onsider the nation's production possibilities frontier between leisure and GDP. A decreasein leisure will causeI) an increase in labor input.II) a movement along the production possibility frontier.A) I onlyB) I I onlyC) b oth I and IID) n either I nor IIAnswer: CTopic: P PFSkill: C onceptual3) A long a production possibilities frontier for real GDP and the quantity of leisure time, asleisure time increases, real GDPA) d ecreasesB) i ncreasesC) s tays the sameD) c ould increase, decrease or stay the sameAnswer: ATopic: P PFSkill: C onceptual*4) B ecause the leisure-real GDP production possibilities frontier is bowed outward, thenA) e ach additional unit of real GDP costs a decreasing amount of forgone leisure.B) a s more real GDP is produced, increasingly more productive labor is being used.C) t he marginal product of labor increases as real GDP increases.D) t he slope of the economy's production function decreases as real GDP increases.Answer: DTopic: P PFSkill: C onceptual5) M oving along the production function shows the relationship between ________, holding allelse constant.A) c apital input and real GDPB) l abor input and real GDPC) l abor input, capital input and real GDPD) t echnology and real GDPAnswer: BTopic: P roduction FunctionSkill: R ecognition6) A long the production function, as the quantity of labor rises, real GDPA) r isesB) f allsC) s tays the sameD) m ay fall, rise, or stay the sameAnswer: ATopic: P roduction FunctionSkill: R ecognition*7) T he production function shows how ________ varies with ________.A) r eal GDP; laborB) leisure; laborC) labor; capitalD) labor; leisureAnswer: ATopic: P roduction FunctionSkill: R ecognition*8) A movement along the production function is the result of a change inA) t he quantity of laborB) t echnologyC) c apitalD) i nterest ratesAnswer: ATopic: P roduction FunctionSkill: C onceptual*9) T he production function shows that an economy increases its real GDP in the short run byA) d eveloping new technologies.B) i ncreasing its physical capital stock.C) u sing more labor.D) e xploring for new deposits of natural resources.Answer: CTopic: P roduction FunctionSkill: C onceptual10) M oving along the production function, all of the following are held constant EXCEPTA) l aborB) c apitalC) h uman capitalD) t echnologyAnswer: ATopic: P roduction FunctionSkill: R ecognition*11) A n increase in labor hours will lead toA) a shift of the production function but no movement along it.B) a movement along the production function but no shift in it.C) b oth a movement along and a shift in the production function.D) n either a movement along nor a shift in the production function.Answer: BTopic: P roduction FunctionSkill: C onceptual12) S uppose that in a particular factory, holding other things equal, when employment increasedfrom 100 to 110 workers, output increased from 100 to 200 units. If employment wasincreased from 110 to 120 workers holding other things equal, then output wouldA) i ncrease by more than 100 because of higher labor force participation.B) i ncrease by less than 100 because of a rising price level.C) i ncrease by less than 100 because of diminishing returns.D) i ncrease by more than 100 because of increasing opportunity cost.Answer: CTopic: T he Production FunctionSkill: C onceptual13) I n the illustration above, which figure shows a production function?A) F igure AB) F igure BC) F igure CD) F igure DAnswer: ATopic: P roduction FunctionSkill: R ecognition14) I n the illustration above, Figure A shows the ________ and Figure B shows the ________.A) l abor demand curve; production functionB) p roduction possibilities frontier; production functionC) p roduction function; production possibilities frontierD) a ggregate supply curve; production functionAnswer: CTopic: P roduction FunctionSkill: R ecognition15) T he ________ shows how real GDP varies as the quantity of labor employed varies, otherthings remaining the same.A) l abor supply curveB) p roduction functionC) s hort-run aggregate supply curveD) l abor demand curveAnswer: BTopic: P roduction FunctionSkill: R ecognition16) W hen the quantity of labor hours increases with no change in labor productivity, ________.A) t he PPF between real GDP and leisure shifts outwardB) t he PPF between real GDP and leisure shifts inwardC) a movement up along the production function occursD) a movement down along the production function occursAnswer: CTopic: P roduction FunctionSkill: R ecognition17) W hen the amount of time that people spend on leisure changes with no change in laborproductivity ________.A) a movement along the PPF between real GDP and leisure as well as a movement alongthe production function occurB) t he PPF between real GDP and leisure shifts outward and the production function shiftsoutwardC) t he PPF between real GDP and leisure shifts outward and a movement along theproduction function occursD) a movement along the PPF between real GDP and leisure occurs and the productionfunction shifts outwardAnswer: ATopic: P roduction PossibilitiesSkill: R ecognition18) T he country of Kemper is on its production function at point W in the above figure. Thegovernment of Kemper passes a law that makes 4 years of college mandatory for all citizens.After all citizens have their education, the economy willA) m ove to point such as Y.B) r emain at point W.C) m ove to point such as X.D) m ove to point such as Z.Answer: DTopic: P roduction FunctionSkill: C onceptual19) T he country of Kemper is on its production function at point W in the above figure. If thepopulation increases with no change in capital or technology, the economy willA) m ove to point such as Y.B) r emain at point W.C) m ove to point such as X.D) m ove to point such as Z.Answer: CTopic: P roduction FunctionSkill: C onceptual20) W hen the quantity of labor employed increases with no change in the nation's productionfunction, the marginal product of laborA) r emains the sameB) d iminishesC) i ncreasesD) m ight change but more information is needed to determine if it increases or diminishes.Answer: BTopic: P roduction FunctionSkill: C onceptualProgress. The citizens of Progress have 400 billion hours each year to spend between leisureand labor. If the quantity of labor increases from 150 billion hours to 200 billion hours a year, real GDP ________.A) d ecreases by $1.5 trillionB) i ncreases by $8.0 trillionC) i ncreases by $1.5 trillionD) e quals $9.0 trillionAnswer: CTopic: P roduction PossibilitiesSkill: A nalytical22) T he table above shows the relationship between leisure and real GDP in the country ofProgress. The citizens of Progress have 400 billion hours each year to spend between leisureand labor. When the citizens of Progress decide to decrease leisure, the marginal product oflabor ________.A) d oes not changeB) i ncreasesC) m ight increase or decreaseD) d ecreasesAnswer: DTopic: P roduction PossibilitiesSkill: A nalytical7.3 The Labor Market and Potential GDP1) T he money wage rate measures theA) c onstant dollar level of real disposable income.B) 2000 dollar value of a unit of labor supplied by a worker.C) q uantity of goods and services that can be bought with an hour of labor.D) n umber of dollars earned by an hour of labor.Answer: DTopic: M oney WageSkill: C onceptual2) T he real wage rate measures theA) q uantity of goods and services that an hour of work will buy.B) a verage weekly earnings in dollars of a worker.C) d ollar value of an hour of work.D) d ollar value of what a worker could earn in another job.Answer: ATopic: R eal WageSkill: C onceptual3) T he real wage rate equalsA) (100) × (money wage rate)/(price level).B) (100) × (price level)/(money wage rate).C) (money wage rate) × (price level).D) (money wage) + (number of hours worked)/(price level).Answer: ATopic: R eal WageSkill: R ecognition4) I f the money wage rate is $15.00 per hour and the price level is 120, the real wage rate isA) $8.50 per hour.B) $10.75 per hour.C) $12.50 per hour.D) $15.00 per hour.Answer: CTopic: R eal WageSkill: A nalytical5) I f the money wage rate is $10.00 per hour and the price level is 60, the real wage rate isA) $16.67 per hour.B) $18.75 per hour.C) $10.00 per hour.D) $12.50 per hour.Answer: ATopic: R eal WageSkill: A nalytical6) I f the real wage rate is $10.00 per hour and the price level is 60, the money wage rate isA) $16.75 per hour.B) $18.50 per hour.C) $10.00 per hour.D) $6.00 per hour.Answer: DTopic: R eal WageSkill: A nalytical7) I f the real wage rate is $15.00 per hour and the price level is 180, the money wage rate isA) $16.67 per hour.B) $18.75 per hour.C) $27.00 per hour.D) $20.50 per hour.Answer: CTopic: R eal WageSkill: A nalytical8) I f the real wage rate is $12.50 per hour and the price level is 90, the money wage rate isA) $11.25 per hour.B) $13.88 per hour.C) $23.75 per hour.D) $13.40 per hour.Answer: ATopic: R eal WageSkill: A nalytical9) I f the real wage rate is $25.00 per hour and the price level is 115, the money wage rate isA) $26.15 per hour.B) $23.00 per hour.C) $21.75 per hour.D) $28.75 per hour.Answer: DTopic: R eal WageSkill: A nalytical10) T he real wage rate falls if the money wage rate ________.A) r ises more rapidly than the price levelB) r ises more slowly than the price levelC) i s constant and the price level fallsD) a nd the price level change by the same proportionAnswer: BTopic: R eal WageSkill: A nalytical11) T he real wage rate rises if the money wage rate ________.A) a nd the price level change by the same proportionB) r ises and the price level rises by the same percentageC) r ises more slowly than the price levelD) r ises more rapidly than the price levelAnswer: DTopic: R eal WageSkill: A nalytical12) W hich pieces of information do you need to calculate the marginal product of labor?I) the change in real GDP.II) the change in the quantity of money.III) the change in the amount of labor input.A) I and IIIB) I onlyC) I II onlyD) I I and IIIAnswer: ATopic: M arginal Product of LaborSkill: R ecognition13) T he marginal product of labor is diminishing because as labor hoursA) i ncrease, capital and technology are fixed.B) i ncrease, output increases.C) d ecrease; output falls very little.D) d ecrease, capital will decrease.Answer: ATopic: M arginal Product of LaborSkill: R ecognition14) T he marginal product of labor curve shows a ________ relationship between ________.A) p ositive; the marginal product of labor and capitalB) p ositive; the marginal product of labor and the quantity of laborC) n egative; the marginal product of labor and capitalD) n egative; the marginal product of labor and the quantity of laborAnswer: DTopic: M arginal Product of LaborSkill: R ecognitionA) 9 units.B) 8 units.C) 16 units.D) 7 units.Answer: DTopic: T he Marginal Product of LaborSkill: A nalytical16) T he marginal product of labor is assumed to decrease as more labor is employed becauseA) e ach extra hour is less skilled than the previous hour.B) t he more labor employed, the more productive the workers become.C) c apital and technology are fixed at any particular point in time.D) l abor is assumed to be not equally suited for all types of alternative productive activities.Answer: CTopic: D iminishing ReturnsSkill: C onceptual17) I n the figure above, what is the marginal product of labor between points a and b?A) 3B) 9C) 30D) 5Answer: ATopic: M arginal Product of LaborSkill: A nalytical*18) I n the figure above an increase in the number of working-age immigrants leads to amovement from pointA) a to point bB) b to point cC) b to point aD) c to point bAnswer: ATopic: P roduction FunctionSkill: C onceptual*19) I n the figure above, which of the following could lead to a movement from point b to point d?A) a n increase in technologyB) a n increase in employmentC) a decrease in technologyD) B oth answers A and B are correct.Answer: ATopic: P roduction FunctionSkill: C onceptual*20) I n the figure above, if new technology increases labor productivity and thereby increases thedemand for labor, the economy moves from pointA) a to point cB) c to point bC) a to point bD) b to point aAnswer: ATopic: M arginal Product of LaborSkill: A nalytical*21) F irms' demand for labor is based onA) t he marginal product of laborB) t he supply of laborC) t heir desire to provide households with jobs and income.D) t he demand for leisureAnswer: ATopic: D emand for LaborSkill: R ecognition*22) W hich of the following statements are TRUE regarding the demand for labor?I) The quantity of labor demanded depends on the real wage rate.II) If the money wage rate increases and the price level remains the same, the quantity of labor demanded decreases.III) If the money wage rate and the price level increase in the same proportion, thequantity of labor demanded decreases.A) IB) I and IIC) I I and IIID) I, II, and IIIAnswer: BTopic: D emand for LaborSkill: C onceptual23) T he relationship between the labor employed by a firm and the real wage rate is shown bytheA) s upply of labor curve.B) s upply of jobs curve.C) d emand for jobs curve.D) d emand for labor curve.Answer: DTopic: D emand for LaborSkill: R ecognition24) T he quantity of labor demanded depends on theA) m oney wage rate not the real wage rate.B) r eal wage rate not the money wage rate.C) p rice of output not the money wage rate nor the real wage rate.D) l evel of income.Answer: BTopic: D emand for LaborSkill: R ecognition25) B ecause the marginal product of labor decreases as the quantity of labor employed increases,the quantity of labor a firm demandsA) r ises as the real wage rate falls.B) r ises as the money wage rate rises.C) c an either rise or fall as the real wage rate changes depending on what is happening tothe money wage rate.D) N one of the above because the marginal product of labor is independent of the quantityof labor demanded.Answer: ATopic: D emand for LaborSkill: C onceptual26) I f the price level falls by 5 percent and the money wage rate remains constant, firms'A) q uantity of labor demanded will decrease.B) q uantity of labor demanded will increase.C) q uantity of labor demanded will not change.D) s upply of jobs will increase.Answer: ATopic: D emand for LaborSkill: A nalytical27) I f the price level falls by 5 percent and workers' money wage rates remain constant, firms'A) q uantity of labor demanded will decrease.B) q uantity of labor demanded will increase.C) s upply of jobs will increase.D) N one of the above answers are correct.Answer: ATopic: D emand for LaborSkill: A nalytical28) I f the price level rises by 5 percent and workers' money wage rates remain constant, firms'A) q uantity of labor demanded will decrease.B) q uantity of labor demanded will increase.C) s upply of jobs will decrease.D) N one of the above answers are correct.Answer: BTopic: D emand for LaborSkill: A nalytical29) S uppose there is a rise in the price level, but no change in the money wage rate. As a result,the quantity of labor demandedA) i ncreases.B) d ecreases.C) d oes not change because there is no change in the real wage rate.D) d ecreases only if the money wage rate also decreases.Answer: ATopic: D emand for LaborSkill: A nalytical30) S uppose there is a rise in the real wage rate. As a result, the quantity of labor demandedA) i ncreases.B) d ecreases.C) d oes not change because there is no change in the money wage rate.D) i ncreases only if the price level also decreases.Answer: BTopic: D emand for LaborSkill: A nalytical31) S uppose the money wage rate and the price level both fall by 5 percent. As a result,A) t he quantity of labor demanded increases.B) t he quantity of labor demanded decreases.C) t he quantity of labor demanded does not change because there is no change in the realwage.D) p eople are worse off and there is more unemployment.Answer: CTopic: D emand for LaborSkill: A nalytical32) T he demand for labor curve slopes downwards becauseA) a s more workers are hired, the marginal product of labor increases.B) a s more workers are hired, the marginal product of labor decreases.C) o utput increases as more workers are hired.D) a s more workers are hired, output decreases.Answer: BTopic: D emand for Labor CurveSkill: R ecognition33) T he demand for labor curve is plotted with the ________ on the vertical axis and is ________.A) p rice level of goods and services; upward slopingB) p rice level of goods and services; downward slopingC) r eal wage rate; upward slopingD) r eal wage rate; downward slopingAnswer: DTopic: D emand for Labor CurveSkill: R ecognition34) T he demand for labor curveA) s lopes upward.B) i s horizontal.C) s lopes downward.D) i s vertical.Answer: CTopic: D emand for Labor CurveSkill: R ecognition35) T he labor demand curve slopes downward becauseA) t he firm maximizes profits by hiring more labor when the real wage rate rises.B) w orkers supply more hours of work when the real wage rate rises.C) t he firm maximizes profits by hiring more labor when the real wage rate falls.D) w orkers supply fewer hours of work when the real wage rate rises.Answer: CTopic: D emand for Labor CurveSkill: C onceptual36) I f the nation's capital stock increases so that workers become more productive, theA) d emand for labor will increaseB) s upply of labor will increaseC) d emand for labor will decreaseD) s upply of labor will decreaseAnswer: ATopic: D emand for Labor CurveSkill: A nalytical*37) W hich of the following statements is correct?A) W hen workers become more productive, the demand for labor curve shifts rightward.B) W hen technology decreases, the supply of labor curve shifts leftward.C) W hen labor force participation increases, the supply of labor curve shifts leftward.D) W hen human capital increases, the demand for labor curve shifts leftward.Answer: ATopic: D emand for Labor CurveSkill: A nalytical*38) T he supply of labor represents theA) n umber of hours all households in the economy plan to work during a given timeperiod.B) n umber of labor hours hired by all firms in the economy during a given time period.C) m arginal product of laborD) v alue of goods and services produced during a given time periodAnswer: ATopic: S upply of LaborSkill: R ecognition*39) T he quantity of labor supplied depends on theA) m oney wage rate not the real wage rate.B) r eal wage rate not the money wage rate.C) p rice of output not the money wage rate nor the real wage rate.D) l evel of profits.Answer: BTopic: S upply of LaborSkill: C onceptual40) W hen the real wage rate rises,A) p eople supply less labor and take more leisure.B) p eople supply more labor because the opportunity cost of leisure increases.C) s ome people are likely to enter the labor force.D) B oth answers B and C are correct.Answer: DTopic: S upply of LaborSkill: R ecognition41) I f the real wage increases, theA) o pportunity cost of not working increases and so people will want to work more.B) o pportunity cost of not working decreases so people will want to work less.C) i ncome effect causes people to want to work more.D) i ncome effect causes people to maintain their current level of work.Answer: ATopic: S upply of LaborSkill: R ecognition42) I f workers' money wage rates increase by 5 percent and the price level remains constant,workers'A) q uantity of labor supplied will decrease.B) q uantity of labor supplied will increase.C) q uantity of labor supplied will not change.D) d emand for jobs will decrease.Answer: BTopic: S upply of LaborSkill: A nalytical43) T he relationship between the hours of labor supplied and the real wage rate is shown by theA) s upply of labor curve.B) s upply of jobs curve.C) d emand for jobs curve.D) d emand for labor curve.Answer: ATopic: S upply of Labor CurveSkill: R ecognition44) T he supply of labor curveA) s lopes downward.B) i s horizontal.C) s lopes upward.D) i s vertical.Answer: CTopic: S upply of Labor CurveSkill: R ecognition45) T he supply of labor curve slopes upward, in part, becauseA) t he opportunity cost of taking leisure rises when the real wage rate increases.B) h ouseholds' incomes increase when the real wage rate increases.C) f irms will demand more labor when the real wage rate falls.D) w orkers are better off when the money wage rate falls and the price level rises.Answer: ATopic: S upply of Labor CurveSkill: C onceptual46) W hich of the following statements is correct?A) W hen the real wage increases, the labor supply curve shifts rightward.B) W hen the real wage increases, the labor supply curve shifts leftward.C) W hen the real wage decreases, the labor supply curve shifts leftward.D) N one of the above statements are correct.Answer: DTopic: S upply of Labor CurveSkill: R ecognition47) W hich statement concerning the labor supply curve is correct?A) F or most individuals, a higher real wage rate leads to a decrease in the quantity of laborsupplied.B) L abor force participation decreases when the real wage rate rises.C) T he quantity of labor supplied responds strongly to changes in the money wage rate.D) A small percentage change in the real wage rate brings a small percentage change in thequantity of labor supplied.Answer: DTopic: S upply of Labor CurveSkill: C onceptual48) S uppose there is an increase in the price level and no change in the money wage rate. As aresult,A) t here is an upward movement along the labor supply curve.B) t here is a downward movement along the labor supply curve.C) t he labor supply curve shifts leftward as people demand higher wages.D) t he labor supply curve shifts rightward as people demand higher wages.Answer: BTopic: S upply of Labor CurveSkill: C onceptual49) I f the real wage rate is such so that the quantity of labor supplied equals the quantity of labordemanded,A) a full-employment equilibrium occurs.B) r eal GDP is at potential GDP.C) t he opportunity cost effect of not working equals the income effect.D) B oth answers A and B are correct.Answer: DTopic: L abor Market EquilibriumSkill: R ecognition。