Exam 6: Economic Growth

During 2009, the country of Economia had a real GDP of $115 billion and the population was 0.9 billion. In 2008, real GDP was 105 billion and the population was 0.85 billion. Economiaʹs growth rate of real GDP per person is

According to UNESCO reporting, ʺGovernments in North America and Western Europe invested the highest shares of national resources in education: 5.6 percent of GDP.ʺ As a result, we would expect ,_________ all else held constant.

Labor productivity is defined as

In developing nations, microloans

Most__________ is embodied in physical capital.

Dividing the value of real GDP by aggregate labor hours gives

The gap between real GDP per person in Africa and real GDP per person in the United States has been

In the neoclassical theory of growth, growth in is the result of luck.

In general, a higher real wage rate decreases the quantity of labor supplied because fewer people enter the labor force.

Activities that encourage faster growth are

Which of the following is TRUE regarding the real wage rate? The real wage rate I. is always greater than the money wage. II. measures the quantity of goods and services an hourʹs work can buy.

According to the law of diminishing returns, an additional unit of

New growth theory economists believe that: I. Economic growth can continue as long as we keep finding new ideas. II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

Over the last 100 years, real GDP per person in the United States has grown at an average rate of approximately 2 percent per year.

If new capital increases labor productivity, the supply of labor _____________and the demand for labor_________

What is the main difference between classical economistsʹ ideas about economic growth versus what modern evidence suggests?

Which one of the following statements about growth theories is correct?

The higher the real wage rate, the higher the labor force participation rate.

The classical growth theoryʹs view of the economy and its ability to achieve growth can be compared to a perpetual motion machine.

Which of the following statements is CORRECT? I. Higher savings rates can stimulate economic growth. II. Limiting international trade can stimulate economic growth.