Question 15 2 pts (05.05 HC) Use the graph to answer the question that follows. Real Interest Rate w o _LD AR S o h Quantity of Funds Which of the following actions could lead to the change shown in the graph? () Government funds a deficit () Government has a surplus (O Reduction in government spending (O Increase in the money supply (O Reduction in the public debt Question 16 2 pts (05.05 MC) Which of the following changes will likely occur when the government borrows money to finance its deficit? (O) Public savings will increase, due to a decrease in the real interest rate. (O) Private sector investment will be encouraged, due to an increase in the real interest rate. () The income level in the economy will increase, due to a decrease in the real interest rate. () Private sector investrment will be crowded out, due to an increase in the real interest rate. (O) The demand for loanable funds will increase, due to a decrease in the real interest rate. Question 17 2 pts (05.06 LC) Which of the following will impede economic growth of a country? (O Increase in labor force (O Increased labor force participation rate (O Decrease in technological development (O Increase in natural resources (O Increase in output per labor employed Question 18 2 pts (05.06 MC) Use the table to answer the question that follows: Year 1999 | 2000 Population (in million) [ 2.5 |3 Real GDP per capita | $40 | $45 Which is the correct percentage growth in real GDP from 1999 to 2000? O 25% O 30% O 35% O 39% O 40% Question 19 2 pts (05.06 LC) Which of the following will lead to an increase in labor productivity? (O Increase in the number of laborers (O Increase in labor force participation rate () Increase in education and skills (O Decline in innovation and technological progress (O Decrease in wage rate Question 20 2 pts (05.06 MC) A rightward shift of which of the following models illustrates economic growth? () The short-run aggregate supply curve () The aggregate demand curve () The money supply curve () The long-run Phillips curve () The production possibilities curve Question 21 2 pts (05.06 MC) Use the graph to answer the question that follows. Capital goods Q B S R A P Consumer goods Suppose the economy is initially producing on the AB production possibility curve (PPC). How will the PPC respond if there is a rightward shift in the long-run aggregate supply? () The productivity of consumer goods will shift from A to P, and the productivity of capital goods will shift from B to Q. () The productivity of consumer goods will shift from A to R, and the preductivity of capital goods will remain at B. () The productivity of consumer goods will shift from A to P, and the productivity of capital goods will shift from B to 5. () The productivity of consumer goods will shift from A to R, and the productivity of capital goods will shift from B to 5. () The productivity of consumer goods will rernain at A, and the productivity of capital goods will shift from B to 5. Question 22 2 pts (05.07 MC) The government of country B has relaxed immigration policies. Which of the following is likely to be a consequence of this policy? (O) There would be an increase in the labor force and an increase in the long-run aggregate supply. (O There would be a decrease in the labor force and a decrease in the long-run aggregate supply. () There would be an increase in the labor force and a decrease in the long-run aggregate supply. (O) There would be a decrease in the labor force and a decrease in the short-run aggregate supply. (O There would be an increase in the labor force and a decrease in the short-run aggregate supply. Question 23 2 pts (05.07 MC) Which of the following policies would most likely lead to economic growth? (O Increasing the income tax rates (O Increasing the allocation to research and development () Decreasing the incentives to producers (O Decreasing the aggregate federal spending (O Increasing the interest rates Question 24 2 pts (05.07 MC) Which of the following sets of variables will be affected if the government plans to decrease the corporate tax rates? (O) Aggregate demand, aggregate supply, and potential output () Aggregate demand, exports, and consumption () Aggregate supply, government spending, and interest rates () Aggregate supply, total credit, and reserve requirement () Aggregate trade, prices, and subsidies