Question 1

If the growth rate of resources is zero and real output is growing at 4 percent, then _____.

Accepted Answer

A)  the stock of capital has fallen by 4 percent 
B)  economic growth has fallen by 4 percent 
C)  total factor productivity has risen by 4 percent 
D)  the stock of labor has fallen by 4 percent 
E)  the percentage share of real GDP received by capital has fallen by 4 percent 
A)  the stock of capital has fallen by 4 percent 
B)  economic growth has fallen by 4 percent 
C)  total factor productivity has risen by 4 percent 
D)  the stock of labor has fallen by 4 percent 
E)  the percentage share of real GDP received by capital has fallen by 4 percent

Question 2

Assume that the economy grows by 3 percent, total factor productivity grows by 2 percent, and the labor force grows at 2 percent. If labor contributes 40 percent to real GDP, then the stock of capital must have risen by 0.33 percent.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following stands true for factors that affect changes in productivity across countries and over time?

Accepted Answer

A)  It is more difficult to measure changes in the quality of goods than changes in the quality of services. 
B)  As energy prices go up, energy-efficient capital goods become obsolete. 
C)  It is believed that productivity grows more slowly in manufacturing industries than in services, because of the less labor-intensive nature of manufacturing industries. 
D)  The key to efficient production is the allocation of resources to their best use. 
E)  The greater the productivity, the more efficient the allocation of resources, and the less developed a country's financial market would be. 
A)  It is more difficult to measure changes in the quality of goods than changes in the quality of services. 
B)  As energy prices go up, energy-efficient capital goods become obsolete. 
C)  It is believed that productivity grows more slowly in manufacturing industries than in services, because of the less labor-intensive nature of manufacturing industries. 
D)  The key to efficient production is the allocation of resources to their best use. 
E)  The greater the productivity, the more efficient the allocation of resources, and the less developed a country's financial market would be.

Question 4

Because fewer people are now needed to perform an average job, it is said that the information technology revolution has played an important role in slowing down productivity in the United States.

Accepted Answer

A) True 
 B)False

Question 5

Increases in the prices of services due to improvement in its quality indicate a(n) _____.

Accepted Answer

A)  decline in productivity. 
B)  decline in real GDP. 
C)  increase in output. 
D)  decline in manufacturing output. 
E)  increase in technological progress. 
A)  decline in productivity. 
B)  decline in real GDP. 
C)  increase in output. 
D)  decline in manufacturing output. 
E)  increase in technological progress.

Question 6

Since the definition of economic growth does not take into account the growth of the country's population, the income of the average person in a country with high real GDP growth could be declining through time.

Accepted Answer

A) True 
 B)False

Question 7

It is believed that the relatively high rate of labor force growth in the developing countries does not translate into a high rate of economic growth because:

Accepted Answer

A)  workers in developing countries have excess capital. 
B)  workers in developing countries are not motivated enough. 
C)  workers in developing countries do not have the natural resources needed for production. 
D)  workers in developing countries have very little capital. 
E)  the high birth rate is more than offset by an enormous mortality rate. 
A)  workers in developing countries have excess capital. 
B)  workers in developing countries are not motivated enough. 
C)  workers in developing countries do not have the natural resources needed for production. 
D)  workers in developing countries have very little capital. 
E)  the high birth rate is more than offset by an enormous mortality rate.

Question 8

If real GDP in Sweden was SEK 822 billion at the end of 1993 and SEK 950 billion at the end of 1994, we can say that the Swedish economy grew at an annual rate of 7% in 1994.

Accepted Answer

A) True 
 B)False

Question 9

Labor productivity is affected by each of the following, except:

Accepted Answer

A)  technological innovation. 
B)  change in capital stock. 
C)  change in average age of the workers. 
D)  change in educational levels. 
E)  cultural background and ethnicity. 
A)  technological innovation. 
B)  change in capital stock. 
C)  change in average age of the workers. 
D)  change in educational levels. 
E)  cultural background and ethnicity.

Question 10

Growth in total factor productivity equals the _____.

Accepted Answer

A)  sum of resource growth and economic growth 
B)  ratio of total output to total input 
C)  ratio of total input to total output 
D)  percentage change in per capita real GDP 
E)  percentage change in output minus the percentage change in resources 
A)  sum of resource growth and economic growth 
B)  ratio of total output to total input 
C)  ratio of total input to total output 
D)  percentage change in per capita real GDP 
E)  percentage change in output minus the percentage change in resources

Question 11

A country with a low living standard can save easily.

Accepted Answer

A) True 
 B)False

Question 12

Economic growth measured in terms of an increase in per capita real GDP is a good measure of _____.

Accepted Answer

A)  the average citizen's standard of living in a nation 
B)  the quality of labor in a nation 
C)  the distribution of income in a nation 
D)  the quality of life people experience in a nation 
E)  economic activity in a nation 
A)  the average citizen's standard of living in a nation 
B)  the quality of labor in a nation 
C)  the distribution of income in a nation 
D)  the quality of life people experience in a nation 
E)  economic activity in a nation

Question 13

Abundance of natural resources is a necessary but not sufficient condition for economic growth.

Accepted Answer

A) True 
 B)False

Question 14

Labor productivity is measured as:

Accepted Answer

A)  the share of wages in national income. 
B)  the change in labor to capital ratio. 
C)  real output per labor hour. 
D)  the change in output from hiring an additional unit of labor. 
E)  the growth in the quantity of labor. 
A)  the share of wages in national income. 
B)  the change in labor to capital ratio. 
C)  real output per labor hour. 
D)  the change in output from hiring an additional unit of labor. 
E)  the growth in the quantity of labor.

Question 15

The baby boom of the post-World War II period had the greatest impact on the size of the U.S. labor force in _____.

Accepted Answer

A)  the 1980s 
B)  the 1970s 
C)  the 1960s 
D)  the 1950s 
E)  the late 1940s 
A)  the 1980s 
B)  the 1970s 
C)  the 1960s 
D)  the 1950s 
E)  the late 1940s

Question 16

Consumer spending is considered a determinant of economic growth.

Accepted Answer

A) True 
 B)False

Question 17

Other things remaining equal, total factor productivity will fall if _____.

Accepted Answer

A)  labor input grows more slowly than total output 
B)  capital input grows faster than total output 
C)  the economy's output divided by total inputs increases 
D)  the ratio of total output to the stock of labor and capital changes by zero percent 
E)  the ratio of total output to the stock of labor and capital increases 
A)  labor input grows more slowly than total output 
B)  capital input grows faster than total output 
C)  the economy's output divided by total inputs increases 
D)  the ratio of total output to the stock of labor and capital changes by zero percent 
E)  the ratio of total output to the stock of labor and capital increases

Question 18

As all available statistics show us, because the average annual population growth is 1.4 percent higher in developing countries than in industrial nations, economic growth is lower in low-income countries.

Accepted Answer

A) True 
 B)False

Question 19

In economics, the term technology refers to different ways of combining resources to produce output. In this sense, technological advances make possible the production of more output from a given amount of resources.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements about technology is true?

Accepted Answer

A)  It is a sufficient but not necessary condition for economic growth. 
B)  Management techniques are irrelevant to technological growth. 
C)  Industrial countries follow the lead of developing countries in implementing new technology. 
D)  Technological change is inversely related to a nation's ability to save. 
E)  Low levels of education can impede technological progress. 
A)  It is a sufficient but not necessary condition for economic growth. 
B)  Management techniques are irrelevant to technological growth. 
C)  Industrial countries follow the lead of developing countries in implementing new technology. 
D)  Technological change is inversely related to a nation's ability to save. 
E)  Low levels of education can impede technological progress.

Exam 16: Economic Growth

If the growth rate of resources is zero and real output is growing at 4 percent, then _____.

Assume that the economy grows by 3 percent, total factor productivity grows by 2 percent, and the labor force grows at 2 percent. If labor contributes 40 percent to real GDP, then the stock of capital must have risen by 0.33 percent.

Which of the following stands true for factors that affect changes in productivity across countries and over time?

Because fewer people are now needed to perform an average job, it is said that the information technology revolution has played an important role in slowing down productivity in the United States.

Increases in the prices of services due to improvement in its quality indicate a(n) _____.

Since the definition of economic growth does not take into account the growth of the country's population, the income of the average person in a country with high real GDP growth could be declining through time.

It is believed that the relatively high rate of labor force growth in the developing countries does not translate into a high rate of economic growth because:

If real GDP in Sweden was SEK 822 billion at the end of 1993 and SEK 950 billion at the end of 1994, we can say that the Swedish economy grew at an annual rate of 7% in 1994.

Labor productivity is affected by each of the following, except:

Growth in total factor productivity equals the _____.

A country with a low living standard can save easily.

Economic growth measured in terms of an increase in per capita real GDP is a good measure of _____.

Abundance of natural resources is a necessary but not sufficient condition for economic growth.

Labor productivity is measured as:

The baby boom of the post-World War II period had the greatest impact on the size of the U.S. labor force in _____.

Consumer spending is considered a determinant of economic growth.

Other things remaining equal, total factor productivity will fall if _____.

As all available statistics show us, because the average annual population growth is 1.4 percent higher in developing countries than in industrial nations, economic growth is lower in low-income countries.

In economics, the term technology refers to different ways of combining resources to produce output. In this sense, technological advances make possible the production of more output from a given amount of resources.

Which of the following statements about technology is true?

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchapterange Rates and Financial Links Between Countries

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