Exam 17: Economic Growth Resources Technology Ideas and Institutions

Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds. We should expect more entrepreneurship under the __________ system and faster real economic growth under the __________ system.

In the production function Real GDP = T (L, K), the T stands for tax coefficient.

Exhibit 17-3 -Refer to Exhibit 17-3 Assume that the starting point on the production function is point A. After an increase in the quantity of labor, there would be a ______________________ which would shift the LRAS curve from LRAS₁ to _______________ resulting in _______________..

Absolute real economic growth is an increase in __________ from one period to the next.

Per-capita real economic growth refers to an increase from one period to the next in

Higher income taxes cause a ____________shift of the labor supply curve, which then produces__________ Real GDP.

Exhibit 17-2 -Refer to Exhibit 17-2. Assume that the starting point is always point 1. Which of the production function graphs shown, (a) or (b), represents an increase in the quantity of labor, and which represents an increase in the quantity of capital, respectively?

In the production function Real GDP = T (L, K), the T represents the _____________ coefficient, the L represents ________________ and the K represents _______________.

Exhibit 17-5 ​ ​Applying the concept of a production function to your learning, assume that the amount of learning you acquire can be summarized by the following equation (and that your motivation to learn and the quality of instruction are both rated on a scale from 1 to 10): ​ Amount of learning acquired = 0.2(number of books read) + 0.25(hours spent studying) + 0.15(quality of instruction) + 0.4(motivation to learn) -Refer to Exhibit 17-5. Based on the equation given in this exhibit, if your motivation to learn rises from 7 to 9, by how much will the amount of learning acquired rise as a result?

Exhibit 17-1 Production Function Real GDP = T (L, K), such that Real GDP = T(L + K) Assume that the technology coefficient is equal to 0.40. -Refer to Exhibit 17-1. If there are 4 units of capital and 6 units of labor, ________ units of output (Real GDP) will be produced.

Real GDP in a small country is worth $40 billion. The population of the country is 1.666,000. What is the country's approximate per capita Real GDP?

Production functions used in economic growth theory are always limited to two inputs: labor and capital.

Property rights are a tangible factor in producing economic growth.

If an economy's steady annual growth rate falls from 3.5 percent to 2.5 percent, this adds __________ years to the time it takes for the economy to double in size.

According to Paul Romer, one way to produce more ideas and knowledge is by

An economy growing at a steady rate of 2.6 percent per year doubles in size approximately every __________ years.

In 1961, President Kennedy committed the United States to a manned lunar mission by the end of the decade. Few thought it could actually be done, but of course it did, with five months to spare. This story illustrates the __________ growth theory argument that technological change __________.

Exhibit 17-5 ​ ​Applying the concept of a production function to your learning, assume that the amount of learning you acquire can be summarized by the following equation (and that your motivation to learn and the quality of instruction are both rated on a scale from 1 to 10): ​ Amount of learning acquired = 0.2(number of books read) + 0.25(hours spent studying) + 0.15(quality of instruction) + 0.4(motivation to learn) -Refer to Exhibit 17-5. Based on the equation given in this exhibit, if you read 2 books, study for 3 hours, have an instructor whose quality of instruction is ranked as 4, and your motivation to learn is ranked as 7, what is the amount of learning that you will acquire?

If the annual growth rate in Real GDP is 4 percent, then it will take 25 years for the economy to double in size.

New growth theory puts emphasis on