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Exam 7: Economic Growth, Productivity, and Living Standards

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Question 61

Multiple Choice

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

A) population.
B) the money supply.
C) government budget surpluses.
D) average labor productivity.

E) B) and D)
F) None of the above

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Question 62

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The prediction that workers obtain additional training only when the rewards from the training are expected to exceed the costs of the training (including the opportunity costs) is based on the:

A) principle of comparative advantage.
B) principle of diminishing returns to capital.
C) scarcity principle.
D) cost-benefit principle.

E) None of the above
F) A) and B)

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Question 63

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The biggest problem thwarting economic growth in the poorest countries, compared to the richest countries, is:

Most economists agree that ______ are the single most important source of productivity improvements.

The principle of diminishing returns to capital states that if the amount of labor and other inputs employed is held constant, then the greater the amount of capital in use the:

Real GDP per person equals average labor productivity:

Jim and Fred are the only two cashiers employed at a retail store. Each of them works the same 40 hours per week and each can check out 30 customers per hour by manually entering the price of each product purchased into the cash register. The store owner replaces the old cash registers with new ones that automatically scan product prices into the register. With the new cash register, Jim and Fred can each check out 60 customers per hour. Their average labor productivity as a team before the new cash registers were introduced was ______ customers per hour and ______ customers per hour after the new machines were installed.

Advances in information and communication technology are the principal factors cited for the:

Arguments that economic growth must be constrained by environmental problems and limits of natural resources ignore the fact that economic growth can:

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 ______.

Economists refer to the talents, training, and education of workers as:

If average labor productivity in two countries is the same, average living standards will be higher in the country with:

Usually an abundance of natural resources ______ average labor productivity.

In Macroland, 500,000 of the 1 million people in the country are employed. Average labor productivity in Macroland is $20,000 per worker. Real GDP per person in Macroland totals:

A government policy to build bridges and dams is an example of a 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 implementation of new production methods by managers, such as the "just-in-time" inventory system, increases:

The establishment of well-defined property rights increases:

Gamma has $30,000 of capital per worker, while Omega has $7,500 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 Gamma compared to Omega, holding other factors constant.

Each of the following increases average labor productivity EXCEPT: