Exam 16: Economic Growth

When trying to determine the standard of living in a given country, it is not important to observe its income distribution, because what we are interested in is the income per person in the economy.

Assume that you invest $550 in a certificate of deposit that has an annual interest rate of 4.5 percent. According to the rule of 72, what will your investment be worth after 16 years?

Economic growth is equal to:

Which of the following contributed to a slowdown in U.S. labor productivity during the 1970s?

Other things equal, a country's long-run aggregate supply will shift to the right when the productivity of labor rises.

Which of the following will shift the long-run aggregate supply curve to the right?

Suppose in an economy the total factor productivity grows by 5%. Annual growth in labor and capital stock equal 2.5% and 1.5% respectively. If the labor force receives 75% of the real GDP, calculate the annual growth in the real GDP of the economy.

Suppose the real GDP in an economy in the year 1999 was $2,000 and the total population was 500. The economy experienced a 5% growth in real GDP and a 2% growth in its population in 2000. Calculate the change in per capita income of the economy during this period.

Suppose that an economy grows by 4 percent, total factor productivity grows by 3 percent, and the labor force increases by 6 percent. If labor and capital are the only inputs and labor contributes 40 percent to GDP, then the stock of capital must have _____.

Long-term economic growth requires a permanent:

The labor force typically grows faster in developing countries than in industrial ones because mortality rates are higher in low-income countries.

Productivity in the services industry may be underestimated because measurements of productivity do not take into account the quality of the service provided.

If real GDP in Korea amounted to 448.3 trillion wons in 1999 and 473.7 trillion wons in 2000, compute the growth experienced by this country in 2000?

The rule of 72 is a formulation that allows us to know, in a very quick and simple manner, the approximate time it takes to double a number that grows at a constant rate.

Which of the following stands true for the determinants of growth?

Using the rule of 72, calculate the average annual growth rate of GDP needed for a country to double its size in just four years?

Poor countries grow faster than rich countries because of rapid growth in the labor force.

According to the rule of 72, if you have $15,000 in an account that grows at the rate of 12 percent annually, it will take approximately six years for the $15,000 to double to $30,000.

An expansion in a country's capital stock is associated with a(n) _____.

Which of the following is accounted for when we measure economic growth in terms of per capita real GDP?