Question : 21) When an economy experiences sustained growth in real GDP, A) : 1384421

21) When an economy experiences sustained growth in real GDP,

A) actual GDP is greater than potential GDP.

B) actual GDP is less than potential GDP.

C) potential GDP is likely to be increasing.

D) factor prices are likely to be decreasing.

E) wage rates will decrease slowly as factor-utilization rates decrease.

22) In the long run, changes to real GDP are most likely to be caused by an increase in

A) interest rates.

B) factor productivity.

C) factor-utilization rates.

D) desired consumption.

E) factor prices.

23) The level of aggregate output is determined in the short run by ________ but in the long run by the level of ________.

A) the output gap; factor productivity

B) the AD curve; interest rates

C) the AS curve; potential output

D) the AD and AS curves; Y*

E) the AD and AS curves; factor utilization

24) Which of the following provides the best explanation for why GDP may increase over long periods of time?

A) increase in capital stock

B) increase in emigration

C) increase in mortality rates

D) increase in interest rates

E) increase in unemployment

25) GDP can be represented by the equation: GDP = F × (Fe/F) × (GDP/Fe), where F represents the total factor supply and Fe represents the number of employed factors. The term (GDP/Fe) represents

A) factor supply per level of output.

B) output per capita.

C) factor utilization.

D) average factor productivity.

E) income per person.

26) Consider the equation GDP = F ? ? . What is the significance of this equation?

A) It allows for a more accurate accounting of actual GDP in any given year.

B) The three components on the right-hand side provide a better understanding of all of the short-run changes in GDP.

C) The three components on the right-hand side provide a better understanding of the long-run changes in GDP.

D) It shows us how any change in real GDP can be decomposed into changes in factor supply, the utilization of factors, and productivity.

E) It allows us a better understanding of how changes in factor supply, the utilization of factors, and productivity affect changes in the output gap.

27) GDP can be represented by the equation: GDP = F × (Fe/F) × (GDP/Fe). In this equation, the term (Fe/F) represents

A) factor supply per level of output.

B) output per capita.

C) the factor-utilization rate.

D) factor productivity.

E) income per person.

28) GDP can be represented by the equation: GDP = F × (Fe/F) × (GDP/Fe). The term Fe represents

A) the number of employed factors.

B) output per capita.

C) the factor-utilization rate.

D) factor productivity.

E) income per person.

29) GDP can be represented by the equation: GDP = L × [E/L] × [GDP/E] where L is the total supply of labour and E is the level of employment. In this equation, the term [GDP/E] represents

A) the productivity of labour.

B) the ratio of the population unemployed.

C) one minus the unemployment rate.

D) output per unit of capital.

E) the unemployment rate.

30) GDP can be represented by the equation: GDP = L × [E/L] × [GDP/E]. In this equation, the term [E/L] represents

A) the productivity of labour.

B) the ratio of the population unemployed.

C) one minus the unemployment rate.

D) the level of employment at a given period of time.

E) the labour force.