Multiple Choice Questions:
1. John Maynard Keynes, who once said that “in the long run, we are all dead,” was primarily concerned with?
a. Long-run economic growth.
b. Long-run price stability.
c. Redirecting short-run fluctuations in the business cycle.
d. All of these issues equally.
2. Economists typically measure economic growth by tracking?
a. The employment rate.
b. The unemployment rate.
c. The expansion index.
d. Real GDP per capita.
e. Nominal GDP.
3. Economic growth refers to a(n) _____________ in the output of goods and services in an economy. The greater the economic growth, the _____________ goods citizens and their descendants will have to consume?
a. Decrease; less
b. Decrease; more
c. Increase; more
d. Increase; less
4. Economic growth is usually measured by the annual percent change in?
a. Nominal GDP.
b. Nominal GDP per capita.
c. Real GDP.
d. Real GDP per capita.
5. How much the economy can produce at its natural rate of output depends on?
a. Technology.
b. The quantity of available natural resources.
c. The productivity of labor.
d. The stock of available capital.
e. All of the above.
6. The natural level of real output in a country will tend to fall if?
a. Technology advances.
b. An increasing fraction of the population retires.
c. Increased investment adds to the capital stock.
d. Existing supplies of natural resources are depleted.
e. Either b or d occurs.
7. The standard of living will decline if?
a. Nominal GDP grows at a faster rate than real GDP.
b. Nominal GDP grows at a slower rate than real GDP.
c. The rate of population growth exceeds the rate of growth of real GDP.
d. The rate of population growth is less than the rate of growth of real GDP.
8. An economy’s production possibilities curve will shift outward over time if?
a. Technological progress occurs.
b. The stock of available capital decreases.
c. Emigration results in a decrease in the supply of available labor.
d. The productivity of labor increases.
e. Either a or d occurs.
9. Which of the following would not result in increasing the natural rate of output in a country?
a. Increasing current consumption by reducing current saving.
b. Draining swampland to allow cultivation.
c. Improving the transportation system.
d. Raising the fraction of resources that the country devotes to education.
e. All of the above would tend to increase the natural rate of output in a country.
10. Which one of the following will cause the production possibilities curve to shift outward?
a. Improved public education.
b. Improved health care systems.
c. Larger budgets for research, development, and exploration.
d. All of the above.