Chapter 7

Rocky Gap Furniture hires ten employees working eight hours each to produce 100 rocking chairs. What is the productivity of these workers?

1.25 chairs per hour

If the growth rate in an economy is 2%, its GDP will double in about:

35 years

If output equals A × (5K + 2L), what is output if A equals 2,000, capital equals 10, and labor equals 100?

500,000

Which of the following resources is an example of infrastructure?

an elementary school

The recent global financial instability:

caused severe credit crunches. slowed down economic growth. harmed standards of living. ****All of the answers are correct.

When the government enforces contracts between two parties, it is acting in its role to promote economic growth by:

ensuring a stable legal system.

Investment in human capital is important because:

it increases labor productivity

In the absence of copyright and patent laws:

it is difficult for innovators to profit from their efforts.

Economic growth is most commonly measured by:

real GDP per capita.

Which of the following occurrences is the key explanation for the high economic growth in the United States in the past century?

technology improvements