Exam 8: Why Do Economies Grow

_______ is/are the knowledge and skills acquired by a worker through education and experience and used to produce goods and services.

Recall Application 4, "Growth Accounting and Information Technology," to answer the following questions: -According to the application, an increase in labor productivity is considered permanent if the technological progress is confined to only one industry.

Explain how the computer and Internet revolution of the 1990s could be responsible for the increase in productivity growth.

Figure 8.1 -Refer to Figure 8.1. If the saving rate were s1 and the economy's level of K is at K1, then:

Using a production possibility curve, economic growth is represented as:

Figure 8.1 -Refer to Figure 8.1. If the saving rate is s1, the economy reaches the long run equilibrium at:

Use the rule of 70 to calculate how long it would take for an economy's real GDP per capita to double if its growth rate is: (a) 1 percent (b) 2 percent (c) 3 percent (d) 7 percent (e) 10 percent

Countries that devote a large share of GDP to investment tend to have high growth rates.

Which of the following outcomes hinder economic growth?

A decrease in capital/labor ratio enhances economic growth.

If average income in the United States is more than 25 times average income in Pakistan, an increase in investment will likely increase economic growth more in Pakistan than in the United States.

Suppose that during the last year growth in output due to growth in labor and capital was 4%. If output grew at a rate of 6%, it must be the case that:

An increase in the saving rate will generally cause an increase in productivity growth in the long run.

Recall Application 7, "Lack of Property Rights Hinders Growth in Peru," to answer the following questions: -According to the application, the lack of clear ownership of land prevents development because:

Recall Application 3, "Sources of Growth in China and India," to answer the following questions: -According to the application, why did China grow much faster than India from 1978 to 2004?

New growth theory suggests that:

Proponents of new growth theory believe that countries at the edge of the technological frontier should invest more on:

Recall Application 5, "The Role of Political Factors in Economic Growth," to answer the following questions: -According to the application, why can't technological growth exist sustainably in authoritarian institutions?

If Julie expects that her salary will double in 10 years, then what is the growth rate of her salary per year?

According to the Solow Model, if the depreciation rate is greater than the saving rate, the economy will experience a decrease in output as the economy approaches its long run equilibrium.