Question 1

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

Accepted Answer

A) increase in potential GDP 
B) decline in future consumption 
C) increase in human capital 
D) decline in the rate of investment 
E) increase in national debt 
A) increase in potential GDP 
B) decline in future consumption 
C) increase in human capital 
D) decline in the rate of investment 
E) increase in national debt

Question 2

Which of the following statements about technology istrue?

Accepted Answer

A) It is sufficient but not a 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 sufficient but not a 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.

Question 3

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?

Accepted Answer

A) $550 
B) $3, 960 
C) $1, 100 
D) $797.5 
E) $1, 200 
A) $550 
B) $3, 960 
C) $1, 100 
D) $797.5 
E) $1, 200

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 6

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 7

Per capita real GDP is:

Accepted Answer

A) equivalent to the real GDP level. 
B) a measure of the value of output produced and available to an average person. 
C) higher in developing countries. 
D) a measure of an economy's income distribution. 
E) a measure of the GDP per country. 
A) equivalent to the real GDP level. 
B) a measure of the value of output produced and available to an average person. 
C) higher in developing countries. 
D) a measure of an economy's income distribution. 
E) a measure of the GDP per country.

Question 8

Economic growth is equal to:

Accepted Answer

A) total factor productivity plus amounts of resources. 
B) growth in total factor productivity plus growth in amounts of resources. 
C) total factor productivity minus marginal factor productivity 
D) real GDP plus national output 
E) GNP plus GDP 
A) total factor productivity plus amounts of resources. 
B) growth in total factor productivity plus growth in amounts of resources. 
C) total factor productivity minus marginal factor productivity 
D) real GDP plus national output 
E) GNP plus GDP

Question 9

If Korea's average annual growth rate is 9 percent and that of the United States is 4 percent, the time required for Korea's real GDP to double will be ____ less than the time required for the GDP of the United States to double.

Accepted Answer

A) 3 years 
B) 6 years 
C) 12 years 
D) 15 years 
E) 10 years 
A) 3 years 
B) 6 years 
C) 12 years 
D) 15 years 
E) 10 years

Question 10

The per capita real GDP in Srilanka is likely to be lower than the United States because Srilanka's economy is characterized by:

Accepted Answer

A) a more equitable income distribution system. 
B) a high population growth. 
C) a low regard for political freedom. 
D) a higher level of consumption spending. 
E) a high budget deficit. 
A) a more equitable income distribution system. 
B) a high population growth. 
C) a low regard for political freedom. 
D) a higher level of consumption spending. 
E) a high budget deficit.

Question 11

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

Accepted Answer

A) Increase in the price level 
B) Increase in the natural rate of unemployment 
C) Decrease in per capita GDP 
D) Increase in the rate of economic growth 
E) Increase in the rate of inflation 
A) Increase in the price level 
B) Increase in the natural rate of unemployment 
C) Decrease in per capita GDP 
D) Increase in the rate of economic growth 
E) Increase in the rate of inflation

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A lack of current saving can be offset by borrowing, but the availability of borrowing is limited by the prospects for future saving.

Accepted Answer

A) True 
 B)False

Question 14

What will be a nation's real GDP after seven years if the average annual growth rate is 5 percent and initial real output is $10 billion?

Accepted Answer

A) $14.07 billion 
B) $14.57 billion 
C) $11.27 billion 
D) $9.74 billion 
E) $13.44 billion 
A) $14.07 billion 
B) $14.57 billion 
C) $11.27 billion 
D) $9.74 billion 
E) $13.44 billion

Question 15

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.

Accepted Answer

A) 10 .5% 
B) 7.25 % 
C) 5.50 % 
D) 4.76 % 
E) 0.05 % 
A) 10 .5% 
B) 7.25 % 
C) 5.50 % 
D) 4.76 % 
E) 0.05 %

Question 16

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 17

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 more 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 more developed a country's financial market would be.

Question 18

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 19

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.

Exam 28: Economic Growth

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

Which of the following statements about technology istrue?

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?

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

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%.

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

Per capita real GDP is:

Economic growth is equal to:

If Korea's average annual growth rate is 9 percent and that of the United States is 4 percent, the time required for Korea's real GDP to double will be ____ less than the time required for the GDP of the United States to double.

The per capita real GDP in Srilanka is likely to be lower than the United States because Srilanka's economy is characterized by:

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

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

A lack of current saving can be offset by borrowing, but the availability of borrowing is limited by the prospects for future saving.

What will be a nation's real GDP after seven years if the average annual growth rate is 5 percent and initial real output is $10 billion?

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.

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

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

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

Which of the following stands true for technological innovation?

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

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

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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