Macro Economics Chapter 8 – Flashcards
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Economic growth is best defined as an increase in: either real GDP or real GDP per capita. nominal GDP. total consumption expenditures. wealth in the economy.
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either real GDP or real GDP per capita.
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Real GDP per capita is found by: adding real GDP and population. subtracting population from real GDP. dividing real GDP by population. dividing population by real GDP.
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dividing real GDP by population.
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Real GDP per capita: cannot grow more rapidly than real GDP. cannot grow more slowly than real GDP. necessarily grows more rapidly than real GDP. can grow either more slowly or more rapidly than real GDP.
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can grow either more slowly or more rapidly than real GDP.
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Which of the following best measures improvements in the standard of living of a nation? Growth of nominal GDP. Growth of real GDP. Growth of real GDP per capita. Growth of national income.
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Growth of real GDP per capita.
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If a nation's real GDP increases from 100 billion to 106 billion and its population jumps from 200 million to 212 million, it real GDP per capita will: remain constant. fall by 6 percent. rise by 6 percent. fall by 12 percent.
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remain constant.
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For a nation's real GDP per capita to rise during a year: consumption spending must increase. real GDP must increase more rapidly than population. population must increase more rapidly than real GDP. investment spending must increase.
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real GDP must increase more rapidly than population.
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Growth is advantageous to a nation because it: promotes faster population growth. lessens the burden of scarcity. eliminates the economizing problem. slows the growth of wants.
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lessens the burden of scarcity.
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Refer to the table. Between years 1 and 2, real GDP grew by __________ percent in Alta. (Pic08) 3 4 5 10
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5
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Refer to the table. Between years 2 and 3: (Pic09) Alta's real GDP grew more rapidly than Zorn's real GDP. real GDP fell in Zorn. population growth reduced Alta's real GDP growth to zero. population fell in Alta.
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Alta's real GDP grew more rapidly than Zorn's real GDP.
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The number of years required for real GDP to double can be found by: dividing the annual growth rate by .07. multiplying the annual growth rate by 70. dividing 70 by the annual growth rate. adding 14 to annual growth rate.
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dividing 70 by the annual growth rate.
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If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately: 22 years. 20 years. 14 years. 8 years.
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14 years.
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Under what circumstances do rates of economic growth understate the growth of economic well-being? Economic growth has occurred because of the increased length of the workweek. Product quality has improved. Air quality has declined as real GDP has increased. Population has grown faster than real output.
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Product quality has improved.
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Which of the following statements is most accurate about modern economic growth? Economic historians mark modern economic growth as beginning around A.D. 1500. Modern economic growth is characterized by sustained and ongoing increases in living standards. Modern economic growth has virtually eliminated business cycle fluctuations. Modern economic growth has been distributed more or less equally across nations.
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Modern economic growth is characterized by sustained and ongoing increases in living standards.
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Countries that have experienced modern economic growth have also tended to: adopt feudalistic institutions. restrict women and minorities from holding certain economic and political positions. move toward more democratic forms of government. have less leisure time for sport and artistic activities.
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move toward more democratic forms of government.
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The Industrial Revolution and modern economic growth resulted in: the average human lifespan more than doubling. a major population shift from urban to rural areas. increased production by local craftsmen. all of these.
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the average human lifespan more than doubling.
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Economic historians date the start of the Industrial Revolution around the year 1776, when James Watt: built the first factory for mass production. invented the steam locomotive. successfully lobbied British parliament for the enactment of patent legislation to protect new inventions. invented and built a more powerful and efficient steam engine.
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invented and built a more powerful and efficient steam engine.
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Which of the following economic regions has experienced the least growth in real GDP per capita since 1820? Africa. Asia excluding Japan. Latin America. Western Europe.
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Africa.
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Which of the following economic regions has experienced the most growth in real GDP per capita since 1820? Japan. United States. Latin America. Western Europe.
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United States.
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Which of the following statements is most accurate about the prospects for poorer ("follower") countries catching up with richer ("leader") countries? Catching up is unlikely to occur because their growth rates are the same on average. Catching up is unlikely to occur because richer countries tend to grow at a faster rate. Catching up is possible, but only if growth rates in leader countries fall to zero or become negative. Catching up is possible as "follower countries" tend to grow faster than "leader countries."
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Catching up is possible as "follower countries" tend to grow faster than "leader countries."
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Economic growth rates in follower countries: tend to be lower than in leader countries because labor forces in follower countries are too small. tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs. will never bring real GDP per capita up to the same levels as in leader countries, even if follower growth rates are greater than those in leader countries. typically average about 2 percent per year.
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tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs.
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Strong property rights are important for modern economic growth because: they allow governments to extract the gains from private citizens' investments. people are more likely to invest if they don't fear that others can take their returns on investment without compensation. they ensure an equitable distribution of income. business cycle fluctuations will be smaller and less likely to disrupt investment patterns.
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people are more likely to invest if they don't fear that others can take their returns on investment without compensation.
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Which of the following institutional arrangements is most likely to promote growth? Patents and copyrights that expire quickly and are loosely enforced. Strong government control over resource allocation decisions. Unrestricted trade between nations. All of these.
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Unrestricted trade between nations.
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Economic growth can be portrayed as: an outward shift of the production possibilities curve. an inward shift of the production possibilities curve. a movement from a point on to a point inside a production possibilities curve. a movement from one point to another point on a fixed production possibilities curve.
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an outward shift of the production possibilities curve.
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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: real GDP declined. capital stock increased. production possibilities curve shifted outward. actual production moved from one point to another on a fixed production possibilities curve.
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real GDP declined.
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Refer to the graph. Growth of production capacity is shown by the: (Pic25) shift from AB to CD. shift from CD to AB. movement away from point A and toward point B. movement away from point B and toward point A.
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shift from AB to CD.
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Labor productivity is defined as: total output/worker-hours. nominal GDP minus real GDP. the ratio of real capital to worker-hours. the annual increase in nominal GDP per worker.
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total output/worker-hours.
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Which of the following is correct? Total output = labor productivity/worker-hours. Labor productivity = worker-hours/total output. Total output = worker-hours × labor productivity. Worker-hours = labor productivity × total output.
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Total output = worker-hours × labor productivity.
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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: is $20. is $500. is $5,000. cannot be calculated.
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is $500.
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Suppose total output (real GDP) is $4,000 and labor productivity is $8. We can conclude that: real GDP per capita must be $500. the price-level index must be greater than 100. nominal GDP must be $500. the number of worker-hours must be 500.
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the number of worker-hours must be 500.
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The percentage of the working-age population in the labor force (= employed + officially unemployed) is called the: labor force participation rate. employment-population ratio. work-activity rate. work-nonwork ratio.
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labor force participation rate.
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The largest contributor to increases in the productivity of American labor is: the reallocation of labor from agriculture to manufacturing. improvements in labor quality. increases in the quantity of capital. technological advance.
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technological advance.
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More than half the growth of real GDP in the United States is caused by: a falling price level. the reallocation of labor from manufacturing to agriculture. increases in the productivity of labor. the use of fewer inputs of labor.
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increases in the productivity of labor.
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A nation's infrastructure refers to: its ability to realize economies of scale. its stock of technological knowledge. public capital goods such as highways and sanitation systems. the productivity of its labor force.
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public capital goods such as highways and sanitation systems.
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Economies of scale refer to: the idea that proprietorships are less bureaucratic and therefore more efficient than corporations. public investments in highways, schools, utilities, and such. the fact that large producers may be able to use more efficient technologies than smaller producers. the reallocation of labor from less-productive to more-productive uses.
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the fact that large producers may be able to use more efficient technologies than smaller producers.
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Human capital refers to: the skills and knowledge that enable a worker to be productive. machinery used by labor in production. the accumulated financial wealth of households. physical capital owned by households rather than businesses.
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the skills and knowledge that enable a worker to be productive.
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What percentage of the U.S. adult population has at least a high school education (as of 2012)? 31 percent. 41 percent. 88 percent. 95 percent.
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88 percent.
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What percentage of the U.S. adult population has a college or post-college education (as of 2012)? 8 percent. 31 percent. 41 percent. 88 percent.
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31 percent.
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Network effects are: increases in the value of a product to each user, including existing users, as the total number of users rises. reductions in per unit production cost as firms learn by doing. increases in demand resulting from products being mentioned positively in a television program. the change in real GDP resulting from a change in investment or government spending.
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increases in the value of a product to each user, including existing users, as the total number of users rises.
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The fundamental invention underpinning the 1995-2012 rise in the average rate of productivity growth is the: microchip. fuel cell. Internet. personal computer.
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microchip.
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(Consider This) Over the past several decades, the percentage of women in the paid U.S. workforce has: increased in spite of declining wages for women. decreased because relatively more women are staying home to raise their children. increased due to higher wages, expanded job accessibility, changing preferences and attitudes, and other factors. increased for unmarried women but decreased for married women.
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increased due to higher wages, expanded job accessibility, changing preferences and attitudes, and other factors.
