1. US potential GDP is tlhe value of the goods and services produced in the Unit
ID: 1163375 • Letter: 1
Question
1. US potential GDP is tlhe value of the goods and services produced in the United States A in the reference base year B, when the U.S. unemployment rate is zero C when the U.S. economy is at full employment D. when the U.S, inflation rate is zero 2. The demand for labor curve shows the relationship between A the quantity of laboe employed and firms' profits B. all households' willingness to work and the real wage rate C. the quantity of labor businesses are willing to hire and the real wage rate D. the labor force and the real wage rate A. the quantity of labor supplied and leisure time forgone B. the real wage rate and the quantity of labor supplied C. firms' willingness to supply jobs and the real wage rate D. the labor force participation rate and the real wage rate 4. Households' labor supply decisions are influenoed by all of the following A. the apportunity cost of taking leisure and not working B. the after-tax wage rate C. unemployment benefits D, the number of full-time jobs available S. If real GDP increases from $5 billion to $5.25 billion and the population increases from 2 million to 2.02 million, real GDP per person increases by percent. A. 5.D B. 1.0 C. 2.5 D. 4.0 6. If the population growth rate is 2 percent, real GDP per person will double in 7 years if real GDP grows bypercent per year A. 7 B. 10 C. 12 D. 14 7. All of the following increase labor productivity except A. the accumulation of skill and knowledge B. an increase in capital per hour of labor C. an increase in consumption D, the employment of a new technology 8. An economy can achieve faster economic growth without A. markets and property rights B. people being willing to save and invest C. incentives to encourage the research for new technologies D. an increase in the population growth rateExplanation / Answer
1. Potential GDP occurs at the point where LRAS curve is vertical at the full employment output level. Full employment doesn't mean Unemployment rate is 0 as there are always some Frictional and structural unemployment present in the economy.
Answer- option C
2. The demand for labor curve shows the relationship between the quantity of labor businesses are willing and able to hire and the real wage rate.
Answer- option C
3. The supply of Labor is the relationship between total number of Labor supplied and the real wage rate.
Answer- option B
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