Exam 19: Economic Growth, Productivity, and Living Standards

If real GDP per person were equal to $2,000 in 1900 and grew at a one percent annual rate, what would be the value of real GDP per person 100 years later?

The benefits of economic growth are ________, while the costs of economic growth are ________.

Countries with large amounts of capital per worker tend to have ________ levels of real GDP per person and ________ levels of average labor productivity.

Providing a fixed number of workers with additional capital will ________ average labor productivity at a(n)________ rate.

Over the period from 1870 to 2010, the growth of real GDP per capita tended to be more rapid between ________, particularly for ________.

The construction of the interstate highway system in the United States is an example of a government policy to promote economic growth by:

Increasing the capital available to the workforce, holding other factors constant, tends to ________ total output while ________ average labor productivity.

The major economic cost of growth is:

Because of diminishing returns to capital, there is a limit to the increases in average labor productivity that can be gained from additional or improved ________.

Empirical studies indicate that the maximum amount of air pollution occurs ________ levels of real GDP per person.

Long-run increases in living standards, as measured by real GDP per person, are primarily the result of increases in:

Suppose that the share of population employed in Country C is 50 percent, and that Countries C and D have the same real GDP per capita. Based on the information in the table, what share of Country D's population must be employed? $\begin{array}{|c|r|r}\hline \text { Country } & \text { Population (millions) } & \text { Average Labor Productivity (\$) } \\\hline \mathrm{A} & 100 & 2,000 \\\hline \mathrm{B} & 150 & 10,000\\\hline \mathrm{C} & 75 & 25,000 \\\hline \mathrm{D} & 250 & 50,000 \\\hline \mathrm{E} & 95 & 60,000 \\\hline\end{array}$

Bank C promises to pay a compound annual interest rate of 6 percent, while Bank S pays a 10 percent simple annual interest rate on deposits. If you deposit $1,000 in each bank, after 10 years, your deposit in Bank C equals ________, while your deposit in Bank S equals ________.

Mike and Tom debone chicken breasts for Ted's Chicken Co. Mike is new and can only debone 30 chicken breasts per hour, while Tom's experience allows him to debone 60 chicken breasts per hour. Both Mike and Tom work 40 hours per week. Their average hourly productivity as a team is ________ chicken breasts.

Assume that average labor productivity is the same in each country. Based on the information in the table, which country has the smallest real GDP per capita? Country Pupulatim (millims) Share of Populatimu Emplayed A 100 60 B 150 55 C 75 50 D 250 45 E 95 40

Assume that the share of population employed in all countries is 50 percent. Based on the information in the table, which country has the smallest real GDP per capita?   $\begin{array}{|c|r|r}\hline \text { Country } & \text { Population (millions) } & \text { Average Labor Productivity (\$) } \\\hline \mathrm{A} & 100 & 2,000 \\\hline \mathrm{B} & 150 & 10,000\\\hline \mathrm{C} & 75 & 25,000 \\\hline \mathrm{D} & 250 & 50,000 \\\hline \mathrm{E} & 95 & 60,000 \\\hline\end{array}$

The average annual growth rates of labor productivity from 1947 to 1973 were ________ the average rates over the period from 1973 to 1995.

A political system that promotes the free and open exchange of ideas: