SOLVED

3Â How Potential GDP Grows 1) Moving along the aggregate production function shows the relationship between ________, holding all else constant. A) capital input and real GDP B) labor input and real GDP C) labor input, capital input and real GDP D) technology and real GDP 2) The aggregate production function shows how ________ varies with ________. A) leisure time; labor B) labor; leisure time C) real GDP; labor D) labor; capital 3) An aggregate production function shows the relationship between A) real GDP and leisure. B) real GDP and the quantity of labor employed. C) leisure and unemployment. D) real GDP and unemployment. 4) The aggregate production function describes the relationship between A) real GDP and the quantity of labor employed. B) real GDP and the price level. C) the rate of growth of real GDP and inflation. D) real GDP and the unemployment rate. 5) A movement along the aggregate production function is the result of a change in A) the quantity of labor B) technology C) capital D) interest rates 6) Along the aggregate production function, as the quantity of labor rises, real GDP A) rises B) falls C) stays the same D) may fall, rise, or stay the same 7) The aggregate production function shows that an economy increases its real GDP in the short run by A) developing new technologies. B) increasing its physical capital stock. C) using more labor. D) exploring for new deposits of natural resources. 8) Moving along the aggregate production function, all of the following are held constant EXCEPT A) labor B) capital C) human capital D) technology 9) An increase in labor hours will lead to A) a shift of the aggregate production function but no movement along it. B) a movement along the aggregate production function but no shift in it. C) both a movement along and a shift in the aggregate production function. D) neither a movement along nor a shift in the aggregate production function. 10) The aggregate production function is graphed as A) a downward sloping curve. B) an upward sloping straight line. C) an upward sloping line that becomes flatter as the quantity of labor increases. D) an upward sloping line that becomes steeper as the quantity of labor increases.