Oh no! - The social arrangements that govern the protection of private property. In the demand for labor what is the relationship between real wage rate and labor? The economy is at full employment and real GDP = potential GDP. - The number of labor hours that all the households in the economy plan to work during a given time period at a given real wage rate. - The annual percentage change of real GDP, - The standard of living depends on the real GDP per person. - A sustained expansion of production possibilities measured as the increase of real GDP. Learn vocabulary, terms, and more with flashcards, games, and other study tools. 3. When the economy is at full employment, real GDP equals potential GDP; so actual real GDP is determined by the same factors that determine potential GDP. - The price of labor services is the real wage rate. - The tendency for each additional hour of labor to produce successively smaller additional amounts of real GDP. True or false: Employers pay efficiency wages as efficiency wages increase workers' turnover. What are the three types of unemployment? - The relationship that shows the maximum quantity of real GDP that can be produced as the quantity of labor employed changes and all other influences on production remain the same. How does government policy affect frictional unemployment? Does an increase in exports of agricultural products increase potential GDP. It looks like your browser needs an update. As more labor is hired, the additional output produced decreases because the extra workers have less capital with which to work. due to the amount of time workers spend on job search. The number of labor hours that all the households in the economy plan to work during a given time period at a given real wage rate. Does the strengthening of labor unions contributes to an increase in structural unemployment and/or the natural rate of unemployment? An increase in job training provided by the government _____________. In the non-unionized market, the equilibrium wage______, and the equilibrium quantity of labor ______. The view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy, The view that the market economy is inherently unstable and needs active government intervention to achieve full employment and sustained economic growth. In a labor market without an efficiency wage, minimum wage, or union wage, when the real wage rate exceeds the equilibrium real wage rate, there is a ________ of labor and the real wage rate will ________. - The total labor hours that all firms in the economy plan to hire during a given period of time at a given wage rate. 1. reduces turnover (reduces training and hiring costs), due to economic fluctuations of the business cycles, does not affect the natural rate of unemployment. To ensure the best experience, please update your browser. 1. changes in demand or supply in various sectors, ex: consumers enjoy biking rather than driving so car factories fire employees, ex: graduating school and beginning the job search, accounts for 15% of jobs lost in manufacturing. On a graph that shows PFF what areas are attainable and unattainable? - A condition in which people are able to make personal choices, private property, and are free to buy and sell in markets. 1. - When the labor market is in equilibrium, the economy is at full employment. Are real factor prices stable or flexible? In the supply of labor what is the relationship between real wage rate and labor? Does an increase in investment in infrastructure affect the supply or demand-side variables of real GDP? Start studying Unit 4 - Potential GDP and Full Employment. - The relationship between the quantity of labor supplied and the real wage rate when all other influences on work plans remain the same. - The quantity of real GDP produced by one hour of labor. gives workers collective bargaining power to ask for higher wages, reducing non-unionized industry wages, above-equilibrium wages paid by firms to increase worker productivity, different from the other two because firms may be better off keeping the high wage. It looks like your browser needs an update. Firm's decisions about how much labor to hire. Quizlet flashcards, activities and games help you improve your grades. Which of the following does cyclical unemployment refer to? Start studying Chapter 23.1: Potential GDP. 2) Real GDP can exceed potential GDP only temporarily as it approaches and then recedes from a business cycle peak. - The number of years it takes for the level of any variable to double, which is approximately 70 divided by the annual percentage of growth rate of the variable. The relationship between the quantity of labor demanded and real wage rate when all other influences on firms hiring plans remain the same. leads to a decrease in the natural rate of unemployment and an increase in potential GDP. What are the three causes of structural unemployment? The higher the real wage rate, the greater is the quantity of labor supplied. - short-run fluctuations around the natural rate of unemployment. What kind of unemployment includes people who are unemployed because they are in search of a job that suits their skills? What are the three causes of frictional unemployment? What are the three benefits to efficiency wages?
2. Chapter 17: Potential GDP and Economic Growth study guide by Kosche includes 22 questions covering vocabulary, terms and more. the relationship between the maximum quantity of real GDP produced and the amount of input used, physical capital, human capital, natural resources, labor, and total factor productivity, the effectiveness of converting inputs into outputs, labor supply equals labor demand (factor markets are in equilibrium). So potential GDP is the sustainable upper limit of production. Does an increase in investment in infrastructure increase potential GDP? Which determinants are being impacted? Supply (physical capital) and Demand (government spending). So potential GDP is the sustainable upper limit of production. Does an increase in the retirement age increase potential GDP? In a competitive labor market, when the government increases the minimum wage, the result is a(n) ________ in the quantity of labor supplied and a(n) ________ in the quantity of labor demanded. Which determinants are being impacted? Real GDP can exceed potential GDP only temporarily as it approaches and then recedes from a business cycle peak. flexible, to ensure full employment is met.

As labor hours increase, what happens to potential output? The view that the market economy works well, that aggregate fluctuations are the natural consequence of an expanding economy, but that fluctuations in the quantity of money generate the business cycle.

- unemployment insurance decreases the incentive to search for jobs, increasing frictional unemployment, excess supply of labor due to the real wage being above the equilibrium.

Start studying How Potential GDP Grows.
Learn vocabulary, terms, and more with flashcards, games, and other study tools. 1. - The value of real GDP when all the economy's factors of production are fully employed. - Saving and investment in physical capital, - If the quantity of capital is small, an increase in capital brings a large increase in production. The relationship between the quantity of labor supplied and the real wage rate when all other influences on work plans remain the same. The relationship between the quantity of labor demanded and the real wage rate when all other influences on firms' hiring plans remain the same. Attainable: Any point along the production line and beneath it in the shaded area, The tendency of each additional hour of labor employed to produce a successively smaller additional amount of real GDP, The quantity of capital is fixed. The lower real wage rate, the more labor firms can profitably hire and the greater is the quantity of labor demanded. Does an increase in the retirement age affect the supply or demand-side variables of real GDP? To ensure the best experience, please update your browser. Learn vocabulary, terms, and more with flashcards, games, and other study tools. 1. Oh no! Which determinants are being impacted? True or false: Employers pay efficiency wages as efficiency wages increase workers' productivity. 3) Real GDP fluctuates around potential GDP, which means that on the average over the business cycle, real GDP equals potential GDP. Does an increase in exports of agricultural products affect the supply or demand-side variables of real GDP? What are the 3 forces that determine potential GDP? When the economy is at full employment, real GDP equals potential GDP; so actual real GDP is determined by the same factors that determine potential GDP. A relationship that shows the maximum quantity of real GDP that can be produced as the quantity of labor employed changes and all other influences on production remain the same.

What determines the quantity of labor employed? What does it mean when the natural rate = unemployment rate? - Is in equilibrium when there is no shortage or surplus of labor. Why does the real wage rate increases when the quantity supplied increases? The value of real GDP when all the economy's factor of production are fully employed. True or false: Employers pay efficiency wages as efficiency wages increase the average experience level of a firm's workers. - Eliminates a surplus of labor by increasing the quantity demanded and decreasing the quantity supplied. - Eliminates a shortage of labor by decreasing the quantity demanded and increasing the quantity supplied. The total labor hours that all the firms in the economy plan to hire during a given time period at a given real wage rate.


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