Exam 8: Economic Growth

Suppose that GDP of a small tropical island grows at 4% per year. This year, output is equal to 100,000 units of output. Using the rule of 72, how long will it take before GDP is equal to 400,000 units of output?

Figure 8-5 Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve. -Refer to Figure 8-5. If a change in technology moves the aggregate production function upward,

All other things unchanged, higher saving rates contribute to higher rates of capital formation.

Economic growth is best viewed as short-run changes in nominal GDP.

Figure 8-5 Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve. -Refer to Figure 8-5. In the long run, any price level is consistent with a real wage of $40,000 because

Suppose a country's real GDP increases. At the same time, its population also increases. What happens to its standard of living?

Figure 8-5 Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve. -Refer to Figure 8-5. In Panel (c), the long-run aggregate supply curve is vertical because

Diminishing marginal returns occurs when

Economic growth is defined as

Economic growth can be represented by

The theory of economic growth focuses on the

The rate of economic growth per capita in Mamoogia from 20006 to 2010 was 1.8% per year, while in Kennan, over the same period it was 3.6%. In 2010, per capita real GDP was $28,900 in Mamoogia and $12,700 in Kennan. Assume the growth rates for each country remain the same. Which country will have a higher level of potential output in 2050?

Which of the following statements is true? I. Small differences in rates of economic growth can lead to large differences in levels of potential output over time. II. From the perspective of the rule of 72, small differences in rates of economic growth between two countries will not significantly affect their respective standards of living. III. Countries that have higher population growth rates are likely to see higher economic growth rates because increases in population lead to increases in the size of the labor force.

Which of the following will not increase the productivity of labor?

Figure 8-5 Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve. -Refer to Figure 8-5. An upward shift of the aggregate production function would lead to

If the rate of growth of output is 8% and the rate of growth of population is 2%, what is the rate of growth of output per capita?

Suppose a nation's real GDP grows at approximately 3.6% per year and its per capita real GDP grows by 2.2%. Calculate the approximate rate of population growth.

Which of the following applies to economic growth? I. Economic growth allows people to buy more goods and services. II. Economic growth is the expansion of the economy's production possibilities. III. Economic growth is represented by a movement from a point inside the production possibilities curve to a point on the curve.

For economic growth to take place, we must consume more and save less.

If an economy grows at a constant rate of 1.5% per year, it will not experience exponential growth.