Question 1

Growth is advantageous to a nation because it:

Accepted Answer

A)  promotes faster population growth. 
B)  lessens the burden of scarcity. 
C)  eliminates the economizing problem. 
D)  slows the growth of wants. 
A)  promotes faster population growth. 
B)  lessens the burden of scarcity. 
C)  eliminates the economizing problem. 
D)  slows the growth of wants.

Question 2

Modern economic growth is defined as increases in real GDP over time.

Accepted Answer

A) True 
 B)False

Question 3

The number of years required for real GDP to double can be found by:

Accepted Answer

A)  dividing the annual growth rate by .07. 
B)  multiplying the annual growth rate by 70. 
C)  dividing 70 by the annual growth rate. 
D)  adding 14 to annual growth rate. 
A)  dividing the annual growth rate by .07. 
B)  multiplying the annual growth rate by 70. 
C)  dividing 70 by the annual growth rate. 
D)  adding 14 to annual growth rate.

Question 4

Real GDP per capita is found by dividing real GDP by the size of the labor force.

Accepted Answer

A) True 
 B)False

Question 5

The inverse dependency ratio is predicted to fall to about 1.16 by 2050.What is the most likely effect of this decline?

Accepted Answer

A)  It will likely cause worker productivity to decline. 
B)  The Social Security system will be on stronger financial footing. 
C)  Innovation will increase significantly as dependents take advantage of their otherwise idle time. 
D)  Living standards will fall if productivity gains don't sufficiently offset the decline in the ratio. 
A)  It will likely cause worker productivity to decline. 
B)  The Social Security system will be on stronger financial footing. 
C)  Innovation will increase significantly as dependents take advantage of their otherwise idle time. 
D)  Living standards will fall if productivity gains don't sufficiently offset the decline in the ratio.

Question 6

Modern economic growth since the 1820s has widened wealth and income disparities between richer and poorer nations.

Accepted Answer

A) True 
 B)False

Question 7

The inverse dependency ratio is defined as:

Accepted Answer

A)  the number of people of working age divided by the number of dependents. 
B)  the number of dependents divided by the number of people of working age. 
C)  the number of seniors over age 65 divided by the number of youths under age 20. 
D)  the number of youths under age 20 divided by the number of seniors over age 65. 
A)  the number of people of working age divided by the number of dependents. 
B)  the number of dependents divided by the number of people of working age. 
C)  the number of seniors over age 65 divided by the number of youths under age 20. 
D)  the number of youths under age 20 divided by the number of seniors over age 65.

Question 8

An economy with an average growth rate of 10 percent can expect to see its real GDP double in approximately 7 years.

Accepted Answer

A) True 
 B)False

Question 9

The rule of 70 is used to find how long it will take an economy to grow by 70 percent.

Accepted Answer

A) True 
 B)False

Question 10

If the secular trend of labor productivity rises from 2 percent per year to 4 percent,the number of years that it will take for the standard of living to double will decline by about:

Accepted Answer

A)  5.2 years. 
B)  10.1 years. 
C)  17.5 years. 
D)  23.8 years. 
A)  5.2 years. 
B)  10.1 years. 
C)  17.5 years. 
D)  23.8 years.

Question 11

Which of the following is not a supply factor in economic growth?

Accepted Answer

A)  The stock of capital. 
B)  Technological advance. 
C)  The size and quality of the labor force. 
D)  Aggregate expenditures of households,businesses,and government. 
A)  The stock of capital. 
B)  Technological advance. 
C)  The size and quality of the labor force. 
D)  Aggregate expenditures of households,businesses,and government.

Question 12

Growth in well-being tends to be understated by growth in real GDP because of increases in leisure time.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is the largest contributor to the growth of labor productivity in the United States?

Accepted Answer

A)  Technological advance. 
B)  Education and training of labor. 
C)  Economies of scale. 
D)  Improved resource allocation. 
A)  Technological advance. 
B)  Education and training of labor. 
C)  Economies of scale. 
D)  Improved resource allocation.

Question 14

Growth is a widely held economic goal primarily because it creates a more equal distribution of wealth and income.

Accepted Answer

A) True 
 B)False

Question 15

Real GDP per capita is found by:

Accepted Answer

A)  adding real GDP and population. 
B)  subtracting population from real GDP. 
C)  dividing real GDP by population. 
D)  dividing population by real GDP. 
A)  adding real GDP and population. 
B)  subtracting population from real GDP. 
C)  dividing real GDP by population. 
D)  dividing population by real GDP.

Question 16

Economic historians date the start of the Industrial Revolution around the year 1776,when James Watt:

Accepted Answer

A)  built the first factory for mass production. 
B)  invented the steam locomotive. 
C)  successfully lobbied British parliament for the enactment of patent legislation to protect new inventions. 
D)  invented and built a more powerful and efficient steam engine. 
A)  built the first factory for mass production. 
B)  invented the steam locomotive. 
C)  successfully lobbied British parliament for the enactment of patent legislation to protect new inventions. 
D)  invented and built a more powerful and efficient steam engine.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Which of the following best measures improvements in the standard of living of a nation?

Accepted Answer

A)  Growth of nominal GDP. 
B)  Growth of real GDP. 
C)  Growth of real GDP per capita. 
D)  Growth of national income. 
A)  Growth of nominal GDP. 
B)  Growth of real GDP. 
C)  Growth of real GDP per capita. 
D)  Growth of national income.

Question 19

Strong property rights are important for modern economic growth because:

Accepted Answer

A)  they allow governments to extract the gains from private citizens' investments. 
B)  people are more likely to invest if they don't fear that others can take their returns on investment without compensation. 
C)  they ensure an equitable distribution of income. 
D)  business cycle fluctuations will be smaller and less likely to disrupt investment patterns. 
A)  they allow governments to extract the gains from private citizens' investments. 
B)  people are more likely to invest if they don't fear that others can take their returns on investment without compensation. 
C)  they ensure an equitable distribution of income. 
D)  business cycle fluctuations will be smaller and less likely to disrupt investment patterns.

Question 20

Leader countries tend to have higher growth rates than follower countries.

Accepted Answer

A) True 
 B)False

Exam 27: Economic Growth

Growth is advantageous to a nation because it:

Modern economic growth is defined as increases in real GDP over time.

The number of years required for real GDP to double can be found by:

Real GDP per capita is found by dividing real GDP by the size of the labor force.

The inverse dependency ratio is predicted to fall to about 1.16 by 2050.What is the most likely effect of this decline?

Modern economic growth since the 1820s has widened wealth and income disparities between richer and poorer nations.

The inverse dependency ratio is defined as:

An economy with an average growth rate of 10 percent can expect to see its real GDP double in approximately 7 years.

The rule of 70 is used to find how long it will take an economy to grow by 70 percent.

If the secular trend of labor productivity rises from 2 percent per year to 4 percent,the number of years that it will take for the standard of living to double will decline by about:

Which of the following is not a supply factor in economic growth?

Growth in well-being tends to be understated by growth in real GDP because of increases in leisure time.

Which of the following is the largest contributor to the growth of labor productivity in the United States?

Growth is a widely held economic goal primarily because it creates a more equal distribution of wealth and income.

Real GDP per capita is found by:

Economic historians date the start of the Industrial Revolution around the year 1776,when James Watt:

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

Which of the following best measures improvements in the standard of living of a nation?

Strong property rights are important for modern economic growth because:

Leader countries tend to have higher growth rates than follower countries.

Income Inequality Poverty and Discrimination

Health Care

Immigration

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

The Balance of Payments, Exchange Rates, and Trade Deficits

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

The United States and the Global Economy

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