Macroeconomics 8th Edition: Practice Exam and Answers (2026 Edition)

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MACROECONOMICS 8E PRACTICE EXAM AND
ANSWERS-2026 JUST RELEASED LATEST VERSION


Productivity, Output, and Employment
Multiple-Choice Questions

1) In the production function Y = AF(K,N), A is , K is , and N is .
A) total factor productivity; the capital stock; the number of workers employed
B) total factor productivity; investment; the number of workers employed
C) the productivity of labour; the capital stock; the size of the labour force
D) the productivity of labour; investment; the size of the
labour force Answer: A
Diff: 1 Type: MC Page Ref: 48

2) In the production function Y = AF(K,N), A is
A) labour productivity.
B) total factor productivity.
C) capital productivity.
D) the marginal productivity of
capital. Answer: B
Diff: 1 Type: MC Page Ref: 48

3) Suppose the economy's production function is Y = AK0.3N0.7. If K = 1000 and N
= 50, then
Y = 2000. What is Y if K = 2000 and N = 100?
A) 4000
B) 3500
C) 3400
D) 3000
Answer: A
Diff: 3 Type: MC Page Ref: 48

4) Under certain circumstances, the production function Y = AF(K,N) can be
rewritten as Y =
ANF(K,N). In this case, suppose that both K and N double. What happens to
output?
A) It remains unchanged.
B) It is reduced by one half.
C) It is increased by a factor of 4.

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D) It
doubles.
Answer: D
Diff: 2 Type: MC Page Ref: 49

5) Suppose the economy's production function is Y = AK0.3N0.7. When K = 1000, N
= 50, and A
= 15, what is Y?
A) 1842
B) 6106
C) 750,000
D) 123
Answer: A
Diff: 1 Type: MC Page Ref: 49
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6) Suppose that in 2002 Freedonia had GDP equal to 2000 million, the capital
stock was equal to 1700 million, the number of employees equaled 70 million.
The production function is Y = AK0.25N0.75. Total factor productivity of the
economy in that year was approximately equal to
A) 0.09.
B) 2.61.
C) 4.19.
D) 12.87.
Answer: D
Diff: 3 Type: MC Page Ref: 49

7) The total factor productivity is
A) a measure of the overall effectiveness with which capital and labour are used.
B) shown by A in the production function Y = AF(K.N).
C) used as a measure of technological improvement.
D) all of the
above. Answer:
D
Diff: 1 Type: MC Page Ref: 49

8) Technological progress is measured by
A) average labour productivity.
B) marginal product of labour.
C) total factor productivity.
D) marginal product of
capital. Answer: C
Diff: 1 Type: MC Page Ref: 49

9) The table below represents Freedonia's macroeconomic data for 2002 and
2003.




Suppose that the production function is given by Y = AK0.25 N0.75. Between 2002
and 2003, total factor productivity of Freedonia's economy increased by
A) -1.5%.
B) 5.0%.
C) 5.5%.

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D) 12.7%.
Answer: A
Diff: 3 Type: MC Page Ref: 51




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