question

Economic growth is best defined as an increase in:

answer

either real GDP or real GDP per capita.

question

Real GDP per capita is found by:

answer

dividing real GDP by population.

question

Real GDP per capita:

answer

can grow either more slowly or more rapidly than real GDP.

question

Which of the following best measures improvements in the standard of living of a nation?

answer

growth of real GDP per capita

question

If a nation's real GDP increases from 100 billion to 106 billion and its population jumps from 200 million to 212 million, its real GDP per capita will:

answer

remain constant.

question

For a nation's real GDP per capita to rise during a year:

answer

real GDP must increase more rapidly than population.

question

Growth is advantageous to a nation because it:

answer

lessens the burden of scarcity.

question

For comparing changes in potential military strength and political preeminence, the most meaningful measure of economic growth would be changes in:

answer

total real output.

question

Refer to the above table. Between years 1 and 2, real GDP grew by __________ percent in Alta.

answer

5

question

Refer to the above table. Between years 1 and 2, real GDP per capita grew by approximately __________ percent in Alta.

answer

4

question

Refer to the above table. Between years 2 and 3:

answer

Alta's real GDP grew more rapidly than Zorn's real GDP.

question

Refer to the above table. Per capita GDP was about:

answer

$303 in year 3 in Zorn.

question

Given the annual rate of economic growth, the "rule of 70" allows one to:

answer

calculate the number of years required for real GDP to double.

question

The number of years required for real GDP to double can be found by:

answer

dividing 70 by the annual growth rate.

question

At an annual growth rate of 7 percent, real GDP will double in about:

answer

10 years.

question

If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately:

answer

14 years

question

If the economy's real GDP doubles in 18 years, we can:

answer

conclude that its average annual rate of growth is about 4 percent

question

Between 1950 and 2009, U.S. real GDP grew at an average annual rate of about:

answer

3.2 percent.

question

Between 1950 and 2009, U.S. real GDP per capita grew at an average annual rate of about:

answer

2.0 percent.

question

Real Per Capita GDP in the United States in 2009 was approximately:

answer

$42,300

question

Under what circumstances do rates of economic growth understate the growth of economic well-being?

answer

Product quality has improved.

question

Which of the following statements is most accurate about modern economic growth?

answer

Modern economic growth is characterized by sustained and ongoing increases in living standards.

question

Countries that have experienced modern economic growth have also tended to:

answer

move toward more democratic forms of government.

question

The Industrial Revolution and modern economic growth resulted in:

answer

the average human lifespan more than doubling.

question

Economic historians date the start of the Industrial Revolution around the year 1776, when James Watt:

answer

invented and built a more powerful and efficient steam engine

question

Real per capita GDP:

answer

was much more equal across nations in 1820 than it is today.

question

Which of the following economic regions has experienced the least growth in real GDP per capita since 1820?

answer

Africa

question

Which of the following economic regions has experienced the most growth in real GDP per capita since 1820?

answer

United States

question

Which of the following statements is most accurate about the prospects for poorer ("follower") countries catching up with richer ("leader") countries?

answer

Catching up is possible as "follower countries" tend to grow faster than "leader countries."

question

As of 1998, living standards in the United States were nearly ______ times higher than those in Africa.

answer

20

question

Economic growth rates in follower countries:

answer

tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs.

question

Real GDP per capita in the United States (as of 2007) exceeds that of France primarily because:

answer

the United States has a higher percentage of the working-age population in the labor force and because U.S. employees average about 20 percent more hours worked per year.

question

Based on the annual number of hours worked per capita, labor supply in the United States exceeds that of France by about _______ percent.

answer

40

question

Strong property rights are important for modern economic growth because:

answer

people are more likely to invest if they don't fear that others can take their returns on investment without compensation

question

Which of the following institutional structures is most likely to promote growth?

answer

A well-enforced system of patents and copyrights.

question

Which of the following institutional arrangements is most likely to promote growth?

answer

Unrestricted trade between nations.

question

A competitive market system:

answer

encourages growth by allowing producers to make profitable investment decisions based on market signals.

question

Free trade:

answer

encourages growth by promoting the rapid spread of new inventions and innovations

question

Refer to the above list. As distinct from the demand and efficiency factors of economic growth, the supply factors of economic growth are:

answer

1, 2, 5, and 6 only.

question

Refer to the above list. As distinct from the supply factors and efficiency factor of economic growth, the demand factor(s) of economic growth is (are):

answer

3 only

question

Refer to the above list. As distinct from the supply factors and demand factor of economic growth, the efficiency factor(s) of economic growth is (are):

answer

4 only

question

Which set of items in the above list would shift an economy's production possibilities curve outward?

answer

1, 2, 5, and 6 only

question

Which set of items in the above list would move an economy from a point inside its production possibilities curve to a point on its production possibilities curve?

answer

3 and 4 only

question

Which of the following is not a supply factor in economic growth?

answer

aggregate expenditures of households, businesses, and government

question

The achievement of full employment through time will:

answer

increase the realized rate of economic growth

question

Economic growth can be portrayed as:

answer

an outward shift of the production possibilities curve

question

Suppose that an economy's labor productivity and total worker-hours each grew by 3 percent between year 1 and year 2. We could conclude that this economy's:

answer

production possibilities curve shifted outward

question

Suppose that an economy's labor productivity and total worker-hours each grew by 4 percent between year 1 and year 2. We could conclude that this economy's:

answer

production possibilities curve shifted outward

question

Suppose that an economy's labor productivity fell by 3 percent and its total worker-hours remained constant between year 1 and year 2. We could conclude that this economy's:

answer

real GDP declined.

question

Refer to the above graph. Growth of production capacity is shown by the:

answer

shift from AB to CD.

question

Refer to the above graph. An increase in an economy's labor productivity would:

answer

shift curve AB to CD.

question

Refer to the above graph. An increase in the economy's human capital would:

answer

shift curve AB to CD.

question

Refer to the above diagram. Realized economic growth is best represented by a:

answer

move from X on AB to Y on CD.

question

Refer to the above diagram. The most likely cause of a shift from AB to CD would be a(n):

answer

increase in productivity.

question

Refer to the above diagram. Increases in the quantity and quality of human resources and capital are best represented by a:

answer

shift in the production possibilities curve from AB to CD.

question

An outward shift of a nation's production possibilities curve:

answer

neither ensures a nation of an increase in real GDP nor of an increase in real GDP per capita.

question

Labor productivity is measured by:

answer

real output per worker hour.

question

Labor productivity is defined as:

answer

total output/worker-hours.

question

Which of the following is correct?

answer

total output = worker-hours labor productivity

question

If the number of worker-hours in an economy is 100 and its labor productivity is $5 of output per worker-hour, the economy's real GDP:

answer

is $500.

question

Suppose total output (real GDP) is $4000 and labor productivity is $8. We can conclude that:

answer

the number of worker-hours must be 500.

question

Suppose total output (real GDP) is $10,000 and worker-hours are 20,000. We can conclude that:

answer

labor productivity must be $0.5.

question

The percentage of the working-age population in the labor force (= employed + officially unemployed) is called the:

answer

labor force participation rate.

question

Other things equal, which of the following would decrease the rate of economic growth, as measured by changes in real GDP?

answer

A decrease in the labor force participation rate

question

Other things equal, which of the following would increase the rate of economic growth, as measured by changes in real GDP?

answer

An increase in the size of the working age population.

question

Which of the following would not be expected to increase labor productivity?

answer

an increase in the size of the labor force

question

Which of the following statements is correct?

answer

Between 1953 and 2009, increases in labor productivity account for more of the growth in U.S. real GDP than do increases in the quantity of labor.

question

Empirical studies suggest that:

answer

technological advances account for about 40 percent of U.S. productivity growth.

question

Between 2009 and 2020, productivity growth is expected to account for about ________ percent of the growth of real GDP in the United States.

answer

92

question

The largest contributor to increases in the productivity of American labor is:

answer

technological advance

question

Which of the following statements is correct?

answer

The amount of real capital used per worker has increased historically in the United States.

question

The historical reallocation of labor from agriculture to manufacturing in the United States has:

answer

increased the average productivity of labor.

question

More than half the growth of real GDP in the United States is caused by:

answer

increases in the productivity of labor.

question

Which of the following is the largest contributor to the growth of labor productivity in the United States?

answer

technological advance

question

A nation's infrastructure refers to:

answer

public capital goods such as highways and sanitation systems.

question

Economies of scale refer to:

answer

the fact that large producers may be able to use more efficient technologies than smaller producers

question

Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect:

answer

labor productivity to rise.

question

Other things equal, which of the following would increase labor productivity the most?

answer

the increase in the stock of real capital exceeds the increase in inputs of labor

question

Human capital refers to:

answer

the skills and knowledge that enable a worker to be productive.

question

What percentage of the U.S. adult population has at least a high school education (as of 2009)?

answer

87 percent

question

What percentage of the U.S. adult population has a college or post-college education (as of 2009)?

answer

29 percent

question

The percentage of U.S. adults with a high school education or above has:

answer

risen from 41 percent in 1960 to 87 percent in 2009.

question

Globally, on average test scores of eighth-grade math and science students, the U.S. ranks (as of 2007):

answer

9th and 11th, respectively.

question

If the growth trend of labor productivity is 3 percent per year, the number of years that it will take for the standard of living to double will be about:

answer

23 years

question

If the secular trend of labor productivity rises from 2 percent per year to 4 percent, the number of years that it will take for the standard of living to double will decline by about:

answer

17 years.

question

The annual growth of U.S. labor productivity:

answer

was greater between 1995 and 2009 than between 1973 and 1995.

question

The period in the U.S. economy from 1995 to 2009 is characterized by:

answer

a higher trend rate of productivity growth

question

Increases in the value of a product to each user, including existing users, as the total number of users rises are called:

answer

network effects

question

Network effects are:

answer

increases in the value of a product to each user, including existing users, as the total number of users rises.

question

All of the following are sources of increasing returns and economies of scale except:

answer

the multiplier effect.

question

The fundamental invention underpinning the recent rise in the average rate of productivity growth is the:

answer

microchip.

question

All of the following are economic implications of the recent rise in the average rate of productivity growth except:

answer

an end to the business cycle.

question

Skeptics of the recent rise in the average rate of productivity growth say that:

answer

it is too soon to judge whether the high productivity advances between 1995 and 2009 are long-lasting or transitory.

question

Economists who believe that the recent rise in the average rate of productivity growth may be long-lasting claim that the above-normal economic growth in the United States between 1995 and 2009 was caused by:

answer

increased entrepreneurial activity, application of information technology, and global competition.

question

Economists who believe that the recent rise in the average rate of productivity growth will be long lasting say that:

answer

innovations in computers and communications, together with global capitalism, are greatly boosting U.S. productivity and the economy's potential economic growth rate.

question

Between 1995 and 2009, the U.S. productivity rate:

answer

grew substantially compared to prior years, leading some economists to predict a long-lasting resurgence of productivity growth.

question

Which of the following is a true statement?

answer

Economists who support economic growth say that it is the most practical route to the higher standards of living that the vast majority of people desire.

question

Proponents of economic growth say that pollution:

answer

occurs, not because of growth, but because common resources are treated as free goods.

question

Critics of economic growth:

answer

argue that economic growth does not resolve socioeconomic problems such as an unequal distribution of income and wealth.

question

Proponents of economic growth make all of the following arguments except:

answer

There is a direct relationship between a growing real GDP and rising pollution.

question

101. (Consider This) The main point of the Consider This box about hypothetical countries Slogo, Sumgo, and Speedo is that over several decades differing:

answer

economic growth rates create large differences in real GDP per capita

question

Consider This) According to the Consider This box about hypothetical countries Slogo, Sumgo, and Speedo, small differences in __________ make for large differences in _________ over several decades, assuming the same growth of population for each country.

answer

economic growth rates; real GDP per capita

question

(Consider This) According to the Consider This box on patents and innovation, the cost for U.S. and European drug companies to research, patent, and safety-test a new drug is about:

answer

$1 billion

question

104. (Consider This) The Consider This box on patents and innovation demonstrates that:

answer

Patent protection for U.S. companies may not be as effective when other countries do not

question

(Consider This) Over the past several decades, the percentage of women in the paid U.S. workforce has:

answer

increased due to higher wages, expanded job accessibility, changing preferences and attitudes, and other factors.

question

(Consider This) Rising wages for women in the United States have increased:

answer

the percentage of married women in the workforce.

question

(Last Word) Over the past twenty-five years, China has averaged annual growth rates of nearly:

answer

9 percent

question

(Last Word) Growth of real per capita income and China has largely resulted from:

answer

increased use of technology and improved technology.

question

(Last Word) Which of the following problems has not accompanied China's rapid economic growth over the past twenty-five years?

answer

Falling per capita income.

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