Question 1

Growth in GDP per capita will be achieved when

Accepted Answer

A) Labor demand decreases substantially while labor supply increases slightly. 
B) GDP grows faster than the population. 
C) Investment is equal to saving. 
D) The government allows tax credits for companies who invest in research and development. 
A) Labor demand decreases substantially while labor supply increases slightly. 
B) GDP grows faster than the population. 
C) Investment is equal to saving. 
D) The government allows tax credits for companies who invest in research and development.

Question 2

Table 17.1 $\begin{array}{|c|c|c|}
\hline \text { Year } & \text { Real GDP } & \text { Population } \
\hline 1 & \$ 575 \text { billion } & 22 \text { million } \
\hline 2 & \$ 580 \text { billion } & 24 \text { million } \
\hline 3 & \$ 605 \text { billion } & 25 \text { million } \
\hline 4 & \$ 606 \text { billion } & 27 \text { million } \
\hline
\end{array}$
 Refer to Table 17.1.The growth rate of the economy from year 2 to year 3 was

Accepted Answer

A) 4.0 percent. 
B) 4.1 percent. 
C) 4.2 percent. 
D) 4.3 percent. 
A) 4.0 percent. 
B) 4.1 percent. 
C) 4.2 percent. 
D) 4.3 percent.

Question 3

Which of the following has made the greatest contribution to economic growth over time?

Accepted Answer

A) Improved management techniques. 
B) Higher ratios of capital to labor. 
C) Research and development. 
D) Improved human capital. 
A) Improved management techniques. 
B) Higher ratios of capital to labor. 
C) Research and development. 
D) Improved human capital.

Question 4

One In the News article in the text is titled "The New Economy." Which of the following is a feature of the "new" economy?

Accepted Answer

A) Strong growth in productivity. 
B) High level of unemployment. 
C) High level of inflation. 
D) Strong growth in productivity,coupled with a high level of unemployment and a high level of inflation. 
A) Strong growth in productivity. 
B) High level of unemployment. 
C) High level of inflation. 
D) Strong growth in productivity,coupled with a high level of unemployment and a high level of inflation.

Question 5

Refer to Figure 17.4.A long-run increase in productive capacity for the economy can be illustrated by a move from point

Accepted Answer

A) E to point A. 
B) A to point B. 
C) C to point D. 
D) A to point C. 
A) E to point A. 
B) A to point B. 
C) C to point D. 
D) A to point C.

Question 6

What is the most common measure of productivity? How is it calculated?

Accepted Answer

The most common measure of pro

Question 7

Over time,foreign investment is credited with the greatest contribution to economic growth in the United States.

Accepted Answer

A) True 
 B)False

Question 8

Table 17.1 $\begin{array}{|c|c|c|}
\hline \text { Year } & \text { Real GDP } & \text { Population } \
\hline 1 & \$ 575 \text { billion } & 22 \text { million } \
\hline 2 & \$ 580 \text { billion } & 24 \text { million } \
\hline 3 & \$ 605 \text { billion } & 25 \text { million } \
\hline 4 & \$ 606 \text { billion } & 27 \text { million } \
\hline
\end{array}$
 Refer to Table 17.1.This economy grew

Accepted Answer

A) At the same rate every year. 
B) Fastest in year 3. 
C) Fastest in year 2. 
D) Fastest in year 4. 
A) At the same rate every year. 
B) Fastest in year 3. 
C) Fastest in year 2. 
D) Fastest in year 4.

Question 9

Which of the following might reduce labor productivity?

Accepted Answer

A) Rising ratios of labor to capital. 
B) Rising literacy. 
C) Rising human capital. 
D) Larger capital stock. 
A) Rising ratios of labor to capital. 
B) Rising literacy. 
C) Rising human capital. 
D) Larger capital stock.

Question 10

Whose work resulted in a doomsday forecast?

Accepted Answer

A) Thomas Malthus. 
B) Robert Solow. 
C) Edward Denison. 
D) Karl Marx. 
A) Thomas Malthus. 
B) Robert Solow. 
C) Edward Denison. 
D) Karl Marx.

Question 11

Output,including agricultural products,has increased at a geometric rate,not at the much slower arithmetic rate foreseen by Malthus.

Accepted Answer

A) True 
 B)False

Question 12

To achieve large and lasting increases in output,

Accepted Answer

A) The production possibilities curve must shift outward. 
B) The production possibilities curve must shift inward. 
C) We must move to a point along the production possibilities curve. 
D) We must move to a point slightly below the production possibilities curve. 
A) The production possibilities curve must shift outward. 
B) The production possibilities curve must shift inward. 
C) We must move to a point along the production possibilities curve. 
D) We must move to a point slightly below the production possibilities curve.

Question 13

Economists often define economic growth in terms of changes in

Accepted Answer

A) Potential GDP. 
B) Current GDP or actual production. 
C) Population. 
D) Living standards. 
A) Potential GDP. 
B) Current GDP or actual production. 
C) Population. 
D) Living standards.

Question 14

A decrease in the marginal propensity to save is likely to

Accepted Answer

A) Increase physical capital investment. 
B) Decrease physical capital investment. 
C) Have no effect on physical capital investment. 
D) Increase or decrease physical capital investment,depending on magnitude. 
A) Increase physical capital investment. 
B) Decrease physical capital investment. 
C) Have no effect on physical capital investment. 
D) Increase or decrease physical capital investment,depending on magnitude.

Question 15

Economic growth

Accepted Answer

A) Is measured using real GDP. 
B) Shifts the production possibilities curve inward. 
C) Involves reduced capacity in the short run. 
D) Shifts the aggregate supply curve to the left in the long run. 
A) Is measured using real GDP. 
B) Shifts the production possibilities curve inward. 
C) Involves reduced capacity in the short run. 
D) Shifts the aggregate supply curve to the left in the long run.

Question 16

Negative economic growth in the long-run can be illustrated in Figure 17.1 by

Accepted Answer

A) Movement from point B to point D. 
B) Movement from point D to point C. 
C) An outward shift of the production possibilities curve. 
D) An inward shift of the production possibilities curve. 
A) Movement from point B to point D. 
B) Movement from point D to point C. 
C) An outward shift of the production possibilities curve. 
D) An inward shift of the production possibilities curve.

Question 17

A movement from point C to point B in Figure 17.5 illustrates

Accepted Answer

A) A decreased capacity to produce. 
B) The short-run opportunity cost of achieving long-run economic growth. 
C) An unattainable combination of consumption and investment goods. 
D) An increase in the unemployment rate. 
A) A decreased capacity to produce. 
B) The short-run opportunity cost of achieving long-run economic growth. 
C) An unattainable combination of consumption and investment goods. 
D) An increase in the unemployment rate.

Question 18

Continued economic growth is desirable if it means that the standard of living continues to increase.

Accepted Answer

A) True 
 B)False

Question 19

The growth rate of total output equals

Accepted Answer

A) Gross investment minus depreciation. 
B) Real GDP per capita growth rate. 
C) The growth rate of the labor force plus the growth rate of productivity. 
D) Real GDP per worker. 
A) Gross investment minus depreciation. 
B) Real GDP per capita growth rate. 
C) The growth rate of the labor force plus the growth rate of productivity. 
D) Real GDP per worker.

Question 20

If the number employed grows faster than the population,then the

Accepted Answer

A) Living standard will fall. 
B) Growth rate of GDP will fall. 
C) Living standard will rise. 
D) Growth rate of GDP will not be affected. 
A) Living standard will fall. 
B) Growth rate of GDP will fall. 
C) Living standard will rise. 
D) Growth rate of GDP will not be affected.

Exam 17: Growth and Productivity: Long-Run Possibilities

Growth in GDP per capita will be achieved when

Table 17.1 Year Real GDP Population 1 \ 575 billion 22 million 2 \ 580 billion 24 million 3 \ 605 billion 25 million 4 \ 606 billion 27 million Refer to Table 17.1.The growth rate of the economy from year 2 to year 3 was

Which of the following has made the greatest contribution to economic growth over time?

One In the News article in the text is titled "The New Economy." Which of the following is a feature of the "new" economy?

Refer to Figure 17.4.A long-run increase in productive capacity for the economy can be illustrated by a move from point

What is the most common measure of productivity? How is it calculated?

Over time,foreign investment is credited with the greatest contribution to economic growth in the United States.

Table 17.1 Year Real GDP Population 1 \ 575 billion 22 million 2 \ 580 billion 24 million 3 \ 605 billion 25 million 4 \ 606 billion 27 million Refer to Table 17.1.This economy grew

Which of the following might reduce labor productivity?

Whose work resulted in a doomsday forecast?

Output,including agricultural products,has increased at a geometric rate,not at the much slower arithmetic rate foreseen by Malthus.

To achieve large and lasting increases in output,

Economists often define economic growth in terms of changes in

A decrease in the marginal propensity to save is likely to

Economic growth

Negative economic growth in the long-run can be illustrated in Figure 17.1 by

A movement from point C to point B in Figure 17.5 illustrates

Continued economic growth is desirable if it means that the standard of living continues to increase.

The growth rate of total output equals

If the number employed grows faster than the population,then the

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Consumer Choice

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