Chapter 6 Questions

Chapter 6 Questions - Chapter-6 Questions Multiple Choice...

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Chapter-6 Questions Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. A decrease in the capital stock would be expected to a. decrease the labor force. b. increase the level of output. c. decrease real GDP per capita. d. increase real GDP per capita. ____ 2. Potential GDP is an estimate of the economy's ability to produce goods and services if the a. labor force is fully employed. b. price level is stable. c. trade balance is zero. d. federal budget is balanced. ____ 3. The amount of goods and services the economy could produce if the labor force is fully employed is called a. nominal GDP. b. real GDP. c. actual GDP. d. potential GDP. ____ 4. An economy could produce above its potential GDP for a short period of time by a. reducing the size of the labor force. b. increasing the price of final goods and services. c. adding extra shifts of work, such as overtime or night shifts. d. increasing the money supply. ____ 5. Adding together the growth rate of labor input and the growth rate of labor productivity yields the growth rate of a. nominal GDP. b. actual GDP. c. potential GDP. d. final GDP. ____ 6. When the growth rates of actual and potential GDP diverge, they usually diverge because a. actual GDP growth equals potential GDP growth. b. actual GDP growth falls below potential GDP growth. c. potential GDP growth rates fall below actual GDP growth rates. d. potential GDP growth rates fluctuate while actual GDP growth rates remain stable. ____ 7. Growth in potential GDP depends on a. the labor force growth rate, capital stock growth rate, and rate of technical progress. b. government spending, growth in prices, and labor productivity. c. cyclical fluctuations and growth in the capital stock. d. growth in real GDP, nominal GDP, and the population. ____ 8. To measure how productive workers in the economy are, the best measure to use would be a. real GDP. b. GDP divided by the population. c. GDP divided by the nation's capital stock. d. GDP divided by hours worked. ____ 9. Compared to the unemployed during the Great Depression, persons unemployed in today's economy are a. worse off due to higher price levels.
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b. worse off due to higher rates of unemployment in the 1990s. c. better off due to unemployment insurance. d. better off due to lower price levels. ____ 10. Discouraged workers are included in the a. labor force category. b. unemployed category. c. not in the labor force category. d. employed category. ____ 11. If the discouraged workers were included in the labor force, a. the unemployment rate would fall. b. the labor force would decrease. c. the employment rate would rise. d. the unemployment rate would rise. ____ 12.
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Chapter 6 Questions - Chapter-6 Questions Multiple Choice...

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