Question 1

The introduction of new technologies to production is ______ source of productivity improvement.

Accepted Answer

A)   the most important
B)   the only
C)   the least important
D)   no longer aE) None of the above
F) C) and D)

Question 2

The population of Alpha totals one million people, 40 percent of whom are employed. Average output per worker in Alpha is $20,000. Real GDP per person in Alpha totals:

Accepted Answer

A)   $8,000.
B)   $12,000.
C)   $20,000.
D)   $50,000.E) B) and D)
F) A) and C)

Question 3

Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:

Accepted Answer

A)   importance of average labor productivity.
B)   power of compound interest.
C)   diminishing returns to capital.
D)   limits of economic growth.E) None of the above
F) A) and D)

Question 4

Business managers are people who:

Accepted Answer

A)   engage exclusively in business travel.
B)   entertain the workers.
C)   run businesses on a day-to-day basis.
D)   own the physical capital used in production.E) C) and D)
F) None of the above

Question 5

A government policy of providing free public education is an example of a policy to promote economic growth by:

Accepted Answer

A)   increasing human capital.
B)   increasing physical capital.
C)   improving technology.
D)   increasing the availability of natural resources.E) None of the above
F) A) and C)

Question 6

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

Accepted Answer

A)   increased output per person; too small for concern
B)   increased output per person; the consumption sacrificed in exchange for capital formation
C)   increased output per person; less future consumption
D)   more current consumption; less future consumptionE) None of the above
F) B) and D)

Question 7

Providing a constant number of workers with additional capital with which to work will ______ average labor productivity at a ______ rate.

Accepted Answer

A)   increase; increasing
B)   increase; constant
C)   increase; decreasing
D)   decrease; decreasingE) None of the above
F) All of the above

Question 8

Alpha has $40,000 of capital per worker, while Beta has $5,000 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will increase output ______ in Alpha compared to Beta, holding other factors constant.

Accepted Answer

A)   more
B)   less
C)   not at all
D)   by the same amountE) A) and B)
F) C) and D)

Question 9

The application of new technologies to the production process will increase:

Accepted Answer

A)   average labor productivity.
B)   the share of the population employed.
C)   the unemployment rate.
D)   the quantity of human capital.E) A) and B)
F) All of the above

Question 10

Real GDP per person in Westland is $30,000, while real GDP in Eastland is $10,000, However, Westland's real GDP per person is growing at 3 percent per year, and Eastland's real GDP per person is growing at 3 percent per year. If these growth rates persist indefinitely, then:

Accepted Answer

A)   Eastland's real GDP per person will rise until it equals Westland's real GDP per person.
B)   Westland's real GDP per person will always be at least $20,000 greater than Eastland's.
C)   Eastland's real GDP per person will always be exactly $20,000 less than Westland's.
D)   Eastland's real GDP per person will eventually be greater than Westland's.E) A) and D)
F) B) and C)

Question 11

Well-defined property rights:

Accepted Answer

A)   are clearly written in English.
B)   restrict the use of land and natural resources to productive uses.
C)   allow the government to confiscate property.
D)   clearly state who owns resources and how the resources can be used.E) A) and B)
F) A) and D)

Question 12

Higher future living standards require:

Accepted Answer

A)   reduced rates of current consumption.
B)   increased rates of population growth.
C)   increased rates of current consumption.
D)   reduced rates of current investment.E) None of the above
F) All of the above

Question 13

Getting a college degree is an example of investing in:

Accepted Answer

A)   human capital.
B)   physical capital.
C)   technology.
D)   research and development.E) A) and C)
F) B) and C)

Question 14

In order to increase the capital stock, society must divert ______ that could be otherwise used to increase the supply of _____.

Accepted Answer

A)   money; consumer goods
B)   credit; labor
C)   money; labor
D)   resources; consumer goodsE) C) and D)
F) A) and B)

Question 15

In order to promote growth through increased quantities of physical capital, governments must promote:

Accepted Answer

A)   a better educational system.
B)   job training programs.
C)   high rates of saving and investing.
D)   funding for basic science.E) A) and C)
F) All of the above

Question 16

In Econland, 500,000 of the 2 million people in the country are employed. Average labor productivity in Econland is $15,000 per worker. Real GDP per person in Econland totals:

Accepted Answer

A)   $1,250.
B)   $3,750.
C)   $11,250.
D)   $60,000.E) None of the above
F) C) and D)

Question 17

The key variable in determining changes in a country's standard of living is the:

Accepted Answer

A)   interest rate.
B)   inflation rate.
C)   unemployment rate.
D)   long-run rate of economic growth.E) A) and B)
F) B) and C)

Question 18

Diminishing returns to capital is a consequence of firms' incentives to use each piece of capital as productively as possible and illustrates the:

Accepted Answer

A)   principle of comparative advantage.
B)   principle of increasing opportunity costs.
C)   scarcity principle.
D)   cost-benefit principle.E) A) and D)
F) A) and C)

Question 19

______ start new economic enterprises, while ______ run the enterprises on a day-to-day basis.

Accepted Answer

A)   Entrepreneurs; managers
B)   Mangers; entrepreneurs
C)   Mangers; laborers
D)   Entrepreneurs; laborersE) All of the above
F) A) and C)

Question 20

In symbolic terms where Y equals real GDP, POP equals total population, and N equals the number of employed workers, Y/POP must equal:

Accepted Answer

A)   Y/N × N/POP.
B)   N/Y × POP/N.
C)   Y/POP × N/POP.
D)   N/Y × N/POP.E) B) and C)
F) All of the above

Exam 7: Economic Growth, Productivity, and Living Standards

start new economic enterprises, while run the enterprises on a day-to-day basis.

Correct Answer
verified

In order to promote growth through increased quantities of physical capital, governments must promote:

Correct Answer
verified

A government policy of providing free public education is an example of a policy to promote economic growth by:

Correct Answer
verified

In symbolic terms where Y equals real GDP, POP equals total population, and N equals the number of employed workers, Y/POP must equal:

Correct Answer
verified

The key variable in determining changes in a country's standard of living is the:

Correct Answer
verified

In Econland, 500,000 of the 2 million people in the country are employed. Average labor productivity in Econland is $15,000 per worker. Real GDP per person in Econland totals:

Correct Answer
verified

Providing a constant number of workers with additional capital with which to work will average labor productivity at a rate.

Correct Answer
verified

Diminishing returns to capital is a consequence of firms' incentives to use each piece of capital as productively as possible and illustrates the:

Correct Answer
verified

Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Well-defined property rights:

Correct Answer
verified

Business managers are people who:

Correct Answer
verified

The population of Alpha totals one million people, 40 percent of whom are employed. Average output per worker in Alpha is $20,000. Real GDP per person in Alpha totals:

Correct Answer
verified

In order to increase the capital stock, society must divert __ that could be otherwise used to increase the supply of _.

Correct Answer
verified

Getting a college degree is an example of investing in:

Correct Answer
verified

The introduction of new technologies to production is ______ source of productivity improvement.

Correct Answer
verified

Higher future living standards require:

Correct Answer
verified

Real GDP per person in Westland is $30,000, while real GDP in Eastland is $10,000, However, Westland's real GDP per person is growing at 3 percent per year, and Eastland's real GDP per person is growing at 3 percent per year. If these growth rates persist indefinitely, then:

Correct Answer
verified

The application of new technologies to the production process will increase:

Correct Answer
verified

Exam 7: Economic Growth, Productivity, and Living Standards

______ start new economic enterprises, while ______ run the enterprises on a day-to-day basis.

Correct AnswerverifiedShow Answer

In order to promote growth through increased quantities of physical capital, governments must promote:

Correct AnswerverifiedShow Answer

A government policy of providing free public education is an example of a policy to promote economic growth by:

Correct AnswerverifiedShow Answer

In symbolic terms where Y equals real GDP, POP equals total population, and N equals the number of employed workers, Y/POP must equal:

Correct AnswerverifiedShow Answer

The key variable in determining changes in a country's standard of living is the:

Correct AnswerverifiedShow Answer

In Econland, 500,000 of the 2 million people in the country are employed. Average labor productivity in Econland is $15,000 per worker. Real GDP per person in Econland totals:

Correct AnswerverifiedShow Answer

Providing a constant number of workers with additional capital with which to work will ______ average labor productivity at a ______ rate.

Correct AnswerverifiedShow Answer

Diminishing returns to capital is a consequence of firms' incentives to use each piece of capital as productively as possible and illustrates the:

Correct AnswerverifiedShow Answer

Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Well-defined property rights:

Correct AnswerverifiedShow Answer

Business managers are people who:

Correct AnswerverifiedShow Answer

The population of Alpha totals one million people, 40 percent of whom are employed. Average output per worker in Alpha is $20,000. Real GDP per person in Alpha totals:

Correct AnswerverifiedShow Answer

In order to increase the capital stock, society must divert ______ that could be otherwise used to increase the supply of _____.

Correct AnswerverifiedShow Answer

Getting a college degree is an example of investing in:

Correct AnswerverifiedShow Answer

The introduction of new technologies to production is ______ source of productivity improvement.

Correct AnswerverifiedShow Answer

Higher future living standards require:

Correct AnswerverifiedShow Answer

Real GDP per person in Westland is $30,000, while real GDP in Eastland is $10,000, However, Westland's real GDP per person is growing at 3 percent per year, and Eastland's real GDP per person is growing at 3 percent per year. If these growth rates persist indefinitely, then:

Correct AnswerverifiedShow Answer

The application of new technologies to the production process will increase:

Correct AnswerverifiedShow Answer

start new economic enterprises, while run the enterprises on a day-to-day basis.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Providing a constant number of workers with additional capital with which to work will average labor productivity at a rate.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In order to increase the capital stock, society must divert __ that could be otherwise used to increase the supply of _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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