4. economic growth

When a firm builds a new factory, this is an example of an investment in

physical capital.

A nation's real GDP was $250 billion in 2014 and $265 billion in 2015. Its population was 122 million in 2014 and 125 million in 2015. What is the growth rate of real GDP per capita in 2015?

3.4%

According to the Rule of 72, if a country experiences an average growth rate of 10%, its real GDP per capita will double in ____.

7.2 years

Which of the following scenarios is an example of an investment in physical capital?

A firm purchases new equipment for a manufacturing process.

The convergence hypothesis ____.

seems to hold only when other things such as education and infrastructure are held equal.

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

the less an additional unit of capital adds to production.

human capital is

the talents, training, and education of workers.

Between 2013 and 2014, the economy experienced a growth rate of 1.8% in real GDP per capita. If nominal GDP had increased by 3% and the population growth rate was 1%, then the annual inflation rate would be ____.

0.2%

Marketopia's real GDP was $520 billion in 2014 and $550 billion in 2015. Its population was 150 million in 2014 and 155 million in 2015. On the other hand, Econland's real GDP was $200 billion in 2014 and $210 billion in 2015; and its population was 53 million in 2014 and 55 million in 2015. Which of the following statements is true?

Marketopia's and Econland's GDP per capita both increased from 2014 to 2015.

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

increase; decreasing

Which of the following will not increase a nation's real GDP?

average price level

The cost of a higher living standard in the future is giving up __________.

current consumption

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

increased output per person; the consumption sacrificed in exchange for capital formation

Which of the following is a measure of economic growth that is most useful for comparing changes in standards of living?

increases in real GDP per capita

The application of new technologies to the production process will increase

labor productivity

For a nation's real GDP per capita to rise during a year,

real GDP must increase more rapidly than population.

If a nation's real GDP increases from 100 billion to 106 billion and its population jumps from 200 million to 212 million, its real GDP per capita will

remain constant.

Most economists agree that ______ are the single most important source of economic growth.

technological advances

Physical capital is

the factories and machinery used to produce other goods and services.