Exam 8: Why Do Economies Grow

You have just been appointed to a special Presidential Task Force on Economic Growth. You are responsible for proposing three policies that the government can enact to increase the growth rate. What policies would you recommend and why?

During recessions, the full utilization of the capital stock raises labor productivity.

An increase in capital stock:

According to the rule of 70, if a variable grows at x% per year, then that variable will double in approximately 70/(1- x) years.

For the United States, explain why the amount of output that each worker can produce per hour has risen in the last half century.

Based on what you learned from the application, which industries are negatively affected by global warming?

Recall Application 5, "The Role of Political Factors in Economic Growth," to answer the following questions: -According to the application, which of the following is an example of authoritarian institutions?

Economic growth allows a society to consume:

Figure 8.3 -Refer to Figure 8.3. Compared to point A, being at point B implies:

Recall Application 7, "Lack of Property Rights Hinders Growth in Peru," to answer the following questions: -According to the application, the inability of households to switch production to highly profitable goods such as palm oil is made difficult by the:

Induced innovations are:

Both real GDP and real GDP per capita vary widely from country to country.

Which of the following countries ran trade deficits in the 19th century to build vast railroad systems?

Which of the following statements is true?

Governments in developing countries can promote economic growth by:

Figure 8.2 -Refer to Figure 8.2 The increase in the equilibrium capital stock from K2 to K3 was brought about by:

Suppose country A has a per capita income of $1000. If country A's GDP grows at 7 percent per year, how long will it take for country A's income per capita equal $4000?

Developing countries can benefit from the vast accumulated knowledge of developed economies if they invest in:

Of the four countries with the highest level of GNP per capita (the United States, Japan, Italy, and the United Kingdom), during the 1960- 2008 period, the fastest growing country was:

Recall Application 7, "Lack of Property Rights Hinders Growth in Peru," to answer the following questions: -According to the application, the houses in urban slums lack: