Exam 8: Economic Growth

Economic growth can be modeled as I. an outward shift of the economy's production possibilities curve. II. a rightward shift of the economy's long-run aggregate supply curve. III. a rightward shift of the labor demand and the labor supply curves. IV. a downward shift of the economy's aggregate production function.

Use the following to answer questions. Exhibit: Aggregate Production Function, Labor Market, and LRAS -(Exhibit: Aggregate Production Function, Labor Market, and LRAS) An upward shift of the aggregate production function would lead to

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?

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

Increases in human capital will promote economic growth.

Use the following to answer questions. Exhibit: Aggregate Production Function, Labor Market, and LRAS -(Exhibit: Aggregate Production Function, Labor Market, and LRAS) The labor market represented in Panel (b) is in long-run equilibrium

Use the following to answer questions. Exhibit: Aggregate Production Function, Labor Market, and LRAS -(Exhibit: Aggregate Production Function, Labor Market, and LRAS) In the long run, any price level is consistent with a real wage of $40,000 because

Over the past century, the average household income in the United States

Economic growth can be illustrated by an outward shift of the production possibilities curve.

Economic growth is defined in terms of changes in the economy's level of goods and services produced from one period to the next.

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

The determinants of economic growth include all of the following except

For a given level of technology, a higher rate of economic growth can probably be achieved only if a country's citizens are prepared to

Diminishing marginal returns occurs when

A curve that relates an economy's total output to the total amount of labor employed, holding all other determinants of output constant, is called

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

Which of the following must also shift if the long-run aggregate supply curve shifts?

In the long run, economic growth can be expected to lead to I. increases in consumption. II. increases in the capital stock. III. increases in the savings rate. IV. outward shifts in the production possibilities curve.

Economic growth occurs when

Using actual values of real GDP to measure economic growth