Question 1

Total factor productivity is the ratio of a:

Accepted Answer

A)  firm's marginal revenue to its marginal cost. 
B)  firm's total revenues to its total costs. 
C)  nation's total income to its total output. 
D)  nation's output to its stock of labor and capital. 
E)  nation's savings to its capital stock. 
A)  firm's marginal revenue to its marginal cost. 
B)  firm's total revenues to its total costs. 
C)  nation's total income to its total output. 
D)  nation's output to its stock of labor and capital. 
E)  nation's savings to its capital stock.

Question 2

Economic growth measured in terms of an increase in per capita real GDP is not a good measure of the distribution of income in a nation.

Accepted Answer

A) True 
 B)False

Question 3

Economic growth in any country is reflected by an increase in real GDP.

Accepted Answer

A) True 
 B)False

Question 4

_____ is the ratio of an economy's output to its stock of labor and capital.

Accepted Answer

A)  Productive capacity 
B)  Multifactor productivity 
C)  Marginal product of labor 
D)  Workforce productivity 
E)  Total factor productivity 
A)  Productive capacity 
B)  Multifactor productivity 
C)  Marginal product of labor 
D)  Workforce productivity 
E)  Total factor productivity

Question 5

By the late 1990s, the growth rate of total factor productivity in the United States _____.

Accepted Answer

A)  averaged about 1% 
B)  averaged between 3 and 4% 
C)  averaged between 6 and 8% 
D)  averaged between 10 and 15% 
E)  averaged above 20% 
A)  averaged about 1% 
B)  averaged between 3 and 4% 
C)  averaged between 6 and 8% 
D)  averaged between 10 and 15% 
E)  averaged above 20%

Question 6

Per capita real GDP is obtained by dividing real GDP by the number of people active in the labor force.

Accepted Answer

A) True 
 B)False

Question 7

What is the annual rate of economic growth in Japan if real GDP at the beginning of the year is 11.9 trillion yen and real GDP at the end of the year is 11.1 trillion yen?

Accepted Answer

A)  0.65% 
B)  -6.7% 
C)  1.9% 
D)  0.008% 
E)  -6.25% 
A)  0.65% 
B)  -6.7% 
C)  1.9% 
D)  0.008% 
E)  -6.25%

Question 8

Other things equal, if the labor input grows faster than total output, total factor productivity falls.

Accepted Answer

A) True 
 B)False

Question 9

The long-run growth of an economy depends on productive resources (land, labor, and capital) and on technological advances.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following stands true for technological innovation?

Accepted Answer

A)  Actual changes in technology proceed as evenly as expenditures on research and development. 
B)  A decline in spending on research and development may indicate less of a commitment to increasing productivity. 
C)  The purchase of computer hardware or software as investment is not advised because of continuous innovations in the field of IT. 
D)  In developing countries, the benefits of IT innovations are being fully exploited because of a large population. 
E)  Education gives developing countries a substantial advantage over industrial countries in creating and implementing innovations because of a large percentage of skilled labor force in the population. 
A)  Actual changes in technology proceed as evenly as expenditures on research and development. 
B)  A decline in spending on research and development may indicate less of a commitment to increasing productivity. 
C)  The purchase of computer hardware or software as investment is not advised because of continuous innovations in the field of IT. 
D)  In developing countries, the benefits of IT innovations are being fully exploited because of a large population. 
E)  Education gives developing countries a substantial advantage over industrial countries in creating and implementing innovations because of a large percentage of skilled labor force in the population.

Question 11

Other things equal, a country's long-run aggregate supply will shift to the left when _____.

Accepted Answer

A)  the aggregate expenditure on education rises 
B)  the productivity of labor rises 
C)  the quantity of natural resources rises 
D)  the mortality rate rises 
E)  the amount of investment rises 
A)  the aggregate expenditure on education rises 
B)  the productivity of labor rises 
C)  the quantity of natural resources rises 
D)  the mortality rate rises 
E)  the amount of investment rises

Question 12

Based on the rule of 72, it would require 18 years for an economy to double its real output if the annual growth rate was 4%.

Accepted Answer

A) True 
 B)False

Question 13

The total U.S. productivity growth rate decreased during the 1990s due to massive technological innovations.

Accepted Answer

A) True 
 B)False

Question 14

What is the growth in resources when total factor productivity grows by 3.5 percent and the economy grows by 2.7 percent?

Accepted Answer

A)  0.8% 
B)  -2.7% 
C)  3.5% 
D)  -0.8% 
E)  0.6% 
A)  0.8% 
B)  -2.7% 
C)  3.5% 
D)  -0.8% 
E)  0.6%

Question 15

We can say that the potential level of real GDP is fixed because the long-run aggregate supply curve is a vertical line.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a barrier to economic growth in low-income countries?

Accepted Answer

A)  A shortage of labor 
B)  A declining population 
C)  Lack of investment in research and development 
D)  Lack of natural resources 
E)  An increasing amount of savings 
A)  A shortage of labor 
B)  A declining population 
C)  Lack of investment in research and development 
D)  Lack of natural resources 
E)  An increasing amount of savings

Question 17

Suppose that an economy grows by 6 percent, total factor productivity grows by 4 percent, and the capital stock increases by 2 percent. If labor and capital are the only inputs used in production, and capital contributes 25 percent to GDP, then the labor force has risen by _____.

Accepted Answer

A)  1.5% 
B)  2% 
C)  4% 
D)  6% 
E)  8% 
A)  1.5% 
B)  2% 
C)  4% 
D)  6% 
E)  8%

Question 18

As the service sector in the U.S. economy grows, traditional productivity measures will become:

Accepted Answer

A)  biased downward, because the qualitative aspects of a service tend to be understated. 
B)  biased upward, because quantitative improvements in the service sector tend to be overstated. 
C)  biased upward, because prices in the service sector always rise faster than prices in manufacturing. 
D)  biased downward, because service output leads to a long-run decline in the inflation rate. 
E)  completely inappropriate for measuring even manufacturing output. 
A)  biased downward, because the qualitative aspects of a service tend to be understated. 
B)  biased upward, because quantitative improvements in the service sector tend to be overstated. 
C)  biased upward, because prices in the service sector always rise faster than prices in manufacturing. 
D)  biased downward, because service output leads to a long-run decline in the inflation rate. 
E)  completely inappropriate for measuring even manufacturing output.

Question 19

As more women entered the labor force in the 1980s in the United States:

Accepted Answer

A)  the number of unskilled workers increased. 
B)  the average quality of the labor force improved. 
C)  the quantity of output decreased. 
D)  the supply of skilled labor exceeded its demand. 
E)  labor productivity increased. 
A)  the number of unskilled workers increased. 
B)  the average quality of the labor force improved. 
C)  the quantity of output decreased. 
D)  the supply of skilled labor exceeded its demand. 
E)  labor productivity increased.

Question 20

If real GDP for Mexico was 19.8 trillion pesos at the end of 1999 and 21.3 trillion pesos at the end of 2000, then Mexico's economy grew at an annual rate of _____.

Accepted Answer

A)  -0.015% 
B)  4.4 % 
C)  4.2% 
D)  7.57% 
E)  3.8% 
A)  -0.015% 
B)  4.4 % 
C)  4.2% 
D)  7.57% 
E)  3.8%

Exam 16: Economic Growth

Total factor productivity is the ratio of a:

Economic growth measured in terms of an increase in per capita real GDP is not a good measure of the distribution of income in a nation.

Economic growth in any country is reflected by an increase in real GDP.

_____ is the ratio of an economy's output to its stock of labor and capital.

By the late 1990s, the growth rate of total factor productivity in the United States _____.

Per capita real GDP is obtained by dividing real GDP by the number of people active in the labor force.

What is the annual rate of economic growth in Japan if real GDP at the beginning of the year is 11.9 trillion yen and real GDP at the end of the year is 11.1 trillion yen?

Other things equal, if the labor input grows faster than total output, total factor productivity falls.

The long-run growth of an economy depends on productive resources (land, labor, and capital) and on technological advances.

Which of the following stands true for technological innovation?

Other things equal, a country's long-run aggregate supply will shift to the left when _____.

Based on the rule of 72, it would require 18 years for an economy to double its real output if the annual growth rate was 4%.

The total U.S. productivity growth rate decreased during the 1990s due to massive technological innovations.

What is the growth in resources when total factor productivity grows by 3.5 percent and the economy grows by 2.7 percent?

We can say that the potential level of real GDP is fixed because the long-run aggregate supply curve is a vertical line.

Which of the following is a barrier to economic growth in low-income countries?

Suppose that an economy grows by 6 percent, total factor productivity grows by 4 percent, and the capital stock increases by 2 percent. If labor and capital are the only inputs used in production, and capital contributes 25 percent to GDP, then the labor force has risen by _____.

As the service sector in the U.S. economy grows, traditional productivity measures will become:

As more women entered the labor force in the 1980s in the United States:

If real GDP for Mexico was 19.8 trillion pesos at the end of 1999 and 21.3 trillion pesos at the end of 2000, then Mexico's economy grew at an annual rate of _____.

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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