Chapter 8: Economic Growth

which of the following is a public investment in infrastructure?

a city builds a new water plant

if the capital stock _________ and the quantity of labor decreases, labor productivity will probably _________.

remains fixed; increase

the expansion of total output relative to population results in _____ real wages and income and _________ standards of living

rising; higher

the number of years for a variable to double equals 70 divided by its annual growth rate is called the:

rule of 70

__________ advancement and capital investment are related because both promote further economic investment in new machinery and equipment

technological

conveyer belts, personal computers, wireless communication and containerized shipping are all example of:

technological advance

which of the following five factors of productivity growth helps to promote the development of new forms of business organization?

technological advance

under the rule of 70, if the GDP per capita growth rate in the US in 2.3%,standards of living double every:

70/2.3=30.43 years

using the rule of 70, how may years would it take for a person's income to double if he/she were to experience a 2% increase in income each year

70/2= 35

select the statements that summarize how firms can increase productivity using economies of scale.

- as firms expand their size and output, they can use more productive equipment - as firms expand their size and output they are better able to recoup investments in new production methods and products - as firms expand their size and output they can employ more productive methods of delivery

Which of the following are used by economists to define and measure economic growth?

-an increase in real GDP per capita occurring over some time period -an increase in real GDP occurring over some time period

two ways in which the rule of 70 may be applicable are:

-estimating how long it will take the price level to double at various percentage rates of inflation. -estimating how tong it will take savings accounts to double various interest rates.

select the statements that describe the effect of liberalized international trade.

-improved allocation of resources -increased labor productivity -expanded real output

what are the three reasons real GDP per capita does not fully account for the growth of an economy

-it does not account for improved products and services it does not account for added leisure time -it does not measure the effects of the environment

growth is an important economic goal because:

-it increases standards of living -it increases a society's ability to resolve socioeconomic problem -it increases real wages and incomes

which of the following statements summarizes how the social-cultural-political environment of the US has encouraged economic growth?

-no social or moral taboos on production -wealth creation is accepted as a desirable goal -positive attitude toward risk taking -stable political system -economic and political freedom -positive attitude toward work

which of the following are growth-promoting institutional structures

-strong property rights -patents and copyrights -efficient financial institutions -literacy and widespread education -free trade -a competitive market system

select some examples of infrastructure

-water supply system -roads and bridges

suppose the annual growth rate of GDP in the US is 4%. the GDP in the US will double in

17.5 years

economic growth is calculated as:

a percentage rate of growth per quarter or per year

today's poor countries can catch up or even pass today's rich leader countries by:

adopting existing technology from rich leader countries

When an economy uses its resources to maximize people's well-being by producing a specific mix of goods and services, it is called __________ efficiency

allocative

economic growth lessen the burden of scarcity by:

allowing more current consumption while also increasing the capacity to produce more in the future

an important source of increasing labor productivity is _______.

an increase in the ratio of capital to labor

real economic growth can be misleading when _____________

annual population growth exceeds that of real GDP

the five factors that, together appear to explain changes in productivity growth rate are technological advance, quantity of ___________ per worker, education and training, economies of scale, and ____________ allocation.

capital; resource

increased private investment in infrastructure would:

cause an increase in economic growth

modern economic growth has significantly increased the standard of living as well as __________, social, and political arrangements

cultural

the purchase of the economy's expanding goods and services by households, businesses, and the government is known as the _________ factor

demand

reduction in per-unit production costs that result from increases in output levels are called

economies of scale

the two types on investment in human capital are on-the-job training and formal ____________

education

one measure of the nation's quality of labor is

educational attainment

when compounded over many years, an apparently small difference in the rate of growth become:

highly significant

which of the following factors of productivity growth account for workers moving over time from low-productivity to high-productivity employment?

improved resource allocation

a nation's economic growth from one year to the next depends on its:

increase in labor inputs and increase in labor productivity

the growth of real GDP is a useful measure for the expansion of ______ preeminence while the real GDP per capita is a useful measure for _______ standards

political; living

increases in capital are important to productivity growth because:

increases in the quantity and quality of capital make workers more productive

Which of the following statements is true?

investment in both private and public capital is conducive to economic growth and higher productivity

human capital refers to :

investments in education and training

generally, technological advance is generated by the discovery of new ________, which allows _________ to be combined in improved ways to increase output

knowledge; resources

a decline in the discrimination against women and minorities has resulted in:

more women and minorities in higher-productivity jobs

When an economy uses its resources in the least costly way to produce goods and services. It is called:

productive efficiency

Real GDP divided by the size of population is called:

real GDP per capita

which of the following statements best summarizes the real economic growth per capita in the US between 1950 and 2015

real GDP per capita rose more than threefold

which of the following statements best summarizes the growth in real GDP in the US between 1950 and 2015?

real GDP rose more than sevenfold

economic growth will ________ the burden of scarcity

reduce

economists pay attention to small changes in economic growth because small changes in economic growth can make a big difference in the living ____________ of a country

standards

human capital refers to:

the improvement in labor created by education and knowledge that is embodied in the work force

bestowing onto inventors and innovators a high level of prestige and respect in society will encourage ___________

wealth creation

the supply factors that are apart of the "determinants" of economic growth include increasing the quality and quantity of natural and human resources, increasing the stock of capital, and improvements in _____________

technology

true or false: countries that experienced economic growth earlier than other countries, have lower average incomes today

false

true or false: countries that experienced growth more recently will never be able to escape poverty

false

the method used to identify the contribution to economic growth from increased capital, labor, and technological progress is known as:

growth accounting

which of the following is not an investment is human capital?

local company replaces its clerks's typewrites with PC

ideally, a nation acquires funds for investment spending on plant and equipment by ________ income

saving

one way that the government can encourage long-term economic growth is by encouraging:

savings and investment

when households, businesses, and the government purchase the economy's expanding output, resources remain fully employed and there are no:

unplanned increases in inventory

Americans' positive attitude toward ________ and risk taking results in a supply of willing workers and innovation entrepreneurs.

work

workers today are more productive than workers in the past because:

workers now have more physical capital embodying better technology with witch to work