Question : 11) A decrease in short-run real GDP that leaves potential : 1384420

11) A decrease in short-run real GDP that leaves potential GDP unaffected would be most likely caused by a (an)

A) decrease in factor-utilization rates.

B) decrease in interest rates.

C) decrease in unemployment rates.

D) increase in factor productivity.

E) None of the above are likely to cause a reduction in real GDP.

12) An increase in potential GDP would most likely be caused by a (an)

A) decrease in factor-utilization rates.

B) increase in factor productivity.

C) increase in interest rates.

D) decrease in saving in the short run.

E) increase in the unemployment rate.

13) Long-run increases in potential GDP would most likely be caused by a (an)

A) decrease in factor-utilization rates.

B) decrease in factor productivity.

C) decrease in saving in the short run.

D) increased availability of key factors of production.

E) increases in the prices of factors of production such as wages or interest rates.

14) Which of the following may increase real GDP in the short run but may actually decrease the long-run growth rate of GDP?

A) decrease in households’ desired saving

B) decrease in factor productivity

C) increase in factor-utilization rates in the short run

D) increase in factor supplies

E) increase in the unemployment rate

15) A characteristic of the short run in macroeconomics is that

A) the output gap opens or closes as the economy moves through the phases of the business cycle.

B) the output gap is constant because the capital stock cannot change.

C) actual GDP is always less than potential GDP.

D) actual GDP is always greater than potential GDP.

E) actual GDP is always growing at the same rate as potential GDP.

16) The study of the short run in macroeconomics focuses

A) equally on potential GDP and actual GDP.

B) primarily on changes to potential GDP.

C) primarily on changes to potential GDP with less emphasis on changes in actual GDP.

D) primarily on changes to actual GDP with no interest in the output gap.

E) primarily on changes to the output gap with less emphasis on changes to potential GDP.

17) In the long run, increases in potential GDP are possible only if there is

A) no government interference with the market system.

B) growth in the supply of available factors or growth in factor productivity.

C) continuous growth in the saving rate.

D) an increase in the general price level.

E) an increase in the unemployment rate.

18) At any given time, the level of potential GDP depends on

1) the available supply of factors of production;

2) normal rates of utilization for labour and capital;

3) the productivity of factors of production.

A) 1 only

B) 2 only

C) 3 only

D) 2 and 3

E) 1, 2, and 3

19) Relatively small annual changes in factor productivity are

A) easy to calculate across many industries.

B) thought to be an important cause of long-run economic growth.

C) not important to long-run growth but are the dominant source of short-run changes in GDP.

D) the only important source of changes in potential GDP.

E) always cancelled out by changes in the growth in factor supplies.

20) The study of the long run in macroeconomics focuses

A) on changes to actual GDP but not on changes in potential GDP.

B) equally on potential GDP and actual GDP.

C) primarily on changes to potential GDP.

D) primarily on changes to the output gap, with a constant level of potential output.

E) primarily on the supply of factors of production.