Question

1. An increase in saving that leads to more capital accumulation ________ labor productivity.

		decreases
		increases
		does not change
		probably changes but in an ambiguous direction

2. In 2010, of the following ________ had the highest real GDP per person.

		the Europe Big 4 countries
		the United States
		Canada
		Japan

3. Moving along the aggregate production function shows the relationship between ________, holding all else constant.

		capital input and real GDP
		labor input, capital input and real GDP
		technology and real GDP
		labor input and real GDP

4. Greater labor force participation for households at higher real wage rate is one reason that

		the demand for labor curve is upward sloping.
		the demand for labor curve is downward sloping.
		the supply of labor curve is downward sloping.
		the supply of labor curve is upward sloping.

5. The supply of labor curve is

		downward sloping.
		upward sloping.
		horizontal at the equilibrium wage rate.
		vertical at potential GDP.

Answer 1

1. An increase in saving that leads to more capital accumulation and that leads to more output produced per worker implies increase in labor productivity.

The correct option is (b)

2. In 2010, of the following the US had the highest real GDP per capita while the rest of the countries had large population hence even if there GDP would be high per capita GDP would be lower due to population rise.

The correct option is (b)

3. Moving along the production function shows relationship between output as GDP and factors of production like labor and capital input holding all else constant

The correct option is (b)

4. Greater labor force participation at higher real wage rate is one reason why supply curve of labor slops upward as there is positive relationship between wage rate and supply of labor.

The correct option is (d)

5. The supply of labor curve is upward sloping because people are more willing to supply their labor as the wage rate increases.

The correct option is (b)