Question 1

Which of the following is correct?

Accepted Answer

A)  Total output = labor productivity/worker-hours. 
B)  Labor productivity = worker-hours/total output. 
C)  Total output = worker-hours × labor productivity. 
D)  Worker-hours = labor productivity × total output. 
A)  Total output = labor productivity/worker-hours. 
B)  Labor productivity = worker-hours/total output. 
C)  Total output = worker-hours × labor productivity. 
D)  Worker-hours = labor productivity × total output.

Question 2

Suppose that an economy's labor productivity and total worker-hours each grew by 4 percent between year 1 and year 2. We could conclude that this economy's

Accepted Answer

A)  real GDP also increased by 4 percent. 
B)  real GDP remained constant. 
C)  production possibilities curve shifted outward. 
D)  capital stock increased by 4 percent. 
A)  real GDP also increased by 4 percent. 
B)  real GDP remained constant. 
C)  production possibilities curve shifted outward. 
D)  capital stock increased by 4 percent.

Question 3

Refer to the accompanying graph. If the production possibilities curve of an economy shifts from AB to CD, it is most likely caused by which of the following factors?

Accepted Answer

A)  a decrease in the price level 
B)  allocative eﬃciency 
C)  technological progress 
D)  full employment of resources 
A)  a decrease in the price level 
B)  allocative eﬃciency 
C)  technological progress 
D)  full employment of resources

Question 4

If an economy is currently producing on its production possibilities curve, a rightward shift of the
curve is a necessary but not suﬃcient condition for welfare-maximizing economic growth.

Accepted Answer

A) True 
 B)False

Question 5

The main cause for the vast differences in per capita GDP levels seen across the globe today is the

Accepted Answer

A)  huge differences in the natural-resource endowments of different countries. 
B)  major differences in the population sizes of various societies. 
C)  different starting dates of modern economic growth in different parts of the world. 
D)  differences in religions that different societies around the world believe in. 
A)  huge differences in the natural-resource endowments of different countries. 
B)  major differences in the population sizes of various societies. 
C)  different starting dates of modern economic growth in different parts of the world. 
D)  differences in religions that different societies around the world believe in.

Question 6

In 2008, living standards in the United States were nearly ______ times higher than those in Africa.

Accepted Answer

A)  3 
B)  8 
C)  10 
D)  19 
A)  3 
B)  8 
C)  10 
D)  19

Question 7

Sources of increasing returns that help raise productivity growth include the following, except

Accepted Answer

A)  more specialized inputs. 
B)  the spreading of development costs. 
C)  network effects. 
D)  low unemployment. 
A)  more specialized inputs. 
B)  the spreading of development costs. 
C)  network effects. 
D)  low unemployment.

Question 8

If 40,000 worker-hours produced a total output of $600,000 in an economy, then the labor productivity is

Accepted Answer

A)  $10/worker-hour. 
B)  $15/worker-hour. 
C)  $24/worker-hour. 
D)  $240/worker-hour. 
A)  $10/worker-hour. 
B)  $15/worker-hour. 
C)  $24/worker-hour. 
D)  $240/worker-hour.

Question 9

What is meant by human capital and how can it be used to promote economic growth?

Accepted Answer

Human capital is the knowledge and skill

Question 10

Refer to the diagram. Realized economic growth is best represented by a

Accepted Answer

A)  move from Z to X along AB. 
B)  move from X on AB to Y on CD. 
C)  shift in the production possibilities curve from CD to AB. 
D)  move from X to Z along AB. 
A)  move from Z to X along AB. 
B)  move from X on AB to Y on CD. 
C)  shift in the production possibilities curve from CD to AB. 
D)  move from X to Z along AB.

Question 11

What percentage of the U.S. adult population has at least a high school education (as of 2018)?

Accepted Answer

A)  31 percent 
B)  41 percent 
C)  90 percent 
D)  99 percent 
A)  31 percent 
B)  41 percent 
C)  90 percent 
D)  99 percent

Question 12

Name the six institutional structures listed in the text that promote and sustain modern economic
growth.

Accepted Answer

Strong property rights, patents and copy

Question 13

The percentage of the working-age population in the labor force (= employed + oﬃcially unemployed) is called the

Accepted Answer

A)  labor force participation rate. 
B)  employment-population ratio. 
C)  work-activity rate. 
D)  work-nonwork ratio. 
A)  labor force participation rate. 
B)  employment-population ratio. 
C)  work-activity rate. 
D)  work-nonwork ratio.

Question 14

One hypothesis for declining productivity growth rates since the Great Recession is that individuals
and ﬁrms have focused more on paying off debt than on making productive investments.

Accepted Answer

A) True 
 B)False

Question 15

Simultaneous consumption and network effects are sources of increasing returns and economies of
scale that promote productivity growth.

Accepted Answer

A) True 
 B)False

Question 16

(Last Word) Factors that have contributed to the increase in women's labor-force participation rate in the U.S. include the following, except

Accepted Answer

A)  rising wage earnings brought about by rising productivity. 
B)  better education and more professional training. 
C)  access to a wider range of job opportunities. 
D)  an increase in the number of children, requiring mothers to ﬁnd work along with fathers. 
A)  rising wage earnings brought about by rising productivity. 
B)  better education and more professional training. 
C)  access to a wider range of job opportunities. 
D)  an increase in the number of children, requiring mothers to ﬁnd work along with fathers.

Question 17

In the modern economic growth process, it is typical to ﬁnd that

Accepted Answer

A)  leader countries continue to grow faster than follower countries. 
B)  follower countries can grow faster than leader countries. 
C)  large countries cannot grow faster than leader countries. 
D)  the gap between the leader countries and the follower countries stays constant. 
A)  leader countries continue to grow faster than follower countries. 
B)  follower countries can grow faster than leader countries. 
C)  large countries cannot grow faster than leader countries. 
D)  the gap between the leader countries and the follower countries stays constant.

Question 18

All of the following are economic implications of the 1995-2010 rise in the average rate of productivity growth except

Accepted Answer

A)  a lower natural rate of unemployment. 
B)  larger outward shifts of the economy's production possibilities curve. 
C)  an end to the business cycle. 
D)  a greater rate of economic growth. 
A)  a lower natural rate of unemployment. 
B)  larger outward shifts of the economy's production possibilities curve. 
C)  an end to the business cycle. 
D)  a greater rate of economic growth.

Question 19

The factor accounting for the largest increase in the productivity of labor in the United States has been

Accepted Answer

A)  the education and training of workers. 
B)  improved resource allocation. 
C)  the quantity of capital. 
D)  technological advance. 
A)  the education and training of workers. 
B)  improved resource allocation. 
C)  the quantity of capital. 
D)  technological advance.

Question 20

Because of the recent rise in the average rate of productivity growth, the business cycle is dead.

Accepted Answer

A) True 
 B)False

Exam 8: Economic Growth

Which of the following is correct?

Suppose that an economy's labor productivity and total worker-hours each grew by 4 percent between year 1 and year 2. We could conclude that this economy's

Refer to the accompanying graph. If the production possibilities curve of an economy shifts from AB to CD, it is most likely caused by which of the following factors?

If an economy is currently producing on its production possibilities curve, a rightward shift of the curve is a necessary but not suﬃcient condition for welfare-maximizing economic growth.

The main cause for the vast differences in per capita GDP levels seen across the globe today is the

In 2008, living standards in the United States were nearly ______ times higher than those in Africa.

Sources of increasing returns that help raise productivity growth include the following, except

If 40,000 worker-hours produced a total output of $600,000 in an economy, then the labor productivity is

What is meant by human capital and how can it be used to promote economic growth?

Refer to the diagram. Realized economic growth is best represented by a

What percentage of the U.S. adult population has at least a high school education (as of 2018)?

Name the six institutional structures listed in the text that promote and sustain modern economic growth.

The percentage of the working-age population in the labor force (= employed + oﬃcially unemployed) is called the

One hypothesis for declining productivity growth rates since the Great Recession is that individuals and ﬁrms have focused more on paying off debt than on making productive investments.

Simultaneous consumption and network effects are sources of increasing returns and economies of scale that promote productivity growth.

(Last Word) Factors that have contributed to the increase in women's labor-force participation rate in the U.S. include the following, except

In the modern economic growth process, it is typical to ﬁnd that

All of the following are economic implications of the 1995-2010 rise in the average rate of productivity growth except

The factor accounting for the largest increase in the productivity of labor in the United States has been

Because of the recent rise in the average rate of productivity growth, the business cycle is dead.

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters