The values on the axes of the long-run aggregate supply diagram are A) real GDP and interest rates. B) real GDP per year and the price level. C) nominal GDP and the price level. D) real GDP and nominal GDP. ANSWER B
Date: September 2nd, 2020
Which of the following variables can be used to measure labor productivity? A) real GDP B) number of labor hours C) number of workers D) all of the above ANSWER D
Date: September 2nd, 2020
When the production possibilities curve shifts outward, A) the price level rises in the long run. B) the long-run aggregate supply curve is unchanged. C) the long-run aggregate supply curve shifts to the left. D) the long-run aggregate supply curve shifts to the right. ANSWER D
Date: September 2nd, 2020
All of the following are assumptions of the classical model EXCEPT A) inflexible wages. B) self-interest of economic actors. C) pure competition. D) absence of money illusion. ANSWER A
Date: September 2nd, 2020
The majority of evidence points to the fact that, in the last decade in the United States, labor productivity has A) stayed the same. B) increased. C) decreased in the manufacturing sector but increased in the service sector. D) decreased. ANSWER B
Date: September 2nd, 2020
One tenet of classical economics is that A) the role of the government should be limited, since the market will always be self-correcting. B) the government should set a minimum wage slightly above the natural market equilibrium rate. C) the government should intervene whenever necessary to avoid any unemployment. D) wages and prices are “sticky […]
Date: September 2nd, 2020
The aggregate supply curve shows A) the total of all planned production for an economy. B) that real GDP can only increase when the price level increases. C) what an economy can produce if resource prices are constant. D) the various quantities of goods consumers will purchase. ANSWER A
Date: September 2nd, 2020
Labor productivity rises when A) average worker output rises. B) nominal wages fall. C) average worker output falls. D) business investment falls. ANSWER A
Date: September 2nd, 2020
Aggregate supply A) is the overall wealth within an economy. B) is the total of all planned production in an economy. C) is the total amount of raw materials available in an economy. D) is the total amount of money circulating in an economy. ANSWER B
Date: September 2nd, 2020
Which of the following statements about the classical model of the economy is FALSE? A) Individuals pursue the public interest, not their own self-interest. B) The economy will always move toward, or be at, full employment. C) Savings and investment will always be equal. D) Wages and prices are flexible. ANSWER A
Date: September 2nd, 2020
