Economic Growth

Human Capital

A firm paying workers to take college classes is an example of investing in ______ ______.

14.4 years

A nation's average annual real GDP growth rate is 5%. Based on the "rule of 72," the approximate number of years that it would take for this nation's real GDP to double is

1.1

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?

cutting income taxes

According to modern growth theory, policy makers in the economy would focus on all of the following to encourage positive economic growth except ____.

7 years

According to the Rule of 70, if a country experiences an average growth rate of 10%, its real GDP per capita will double in ___.

instability in the money supply

All of the following can lead to economic growth except ___.

bonds and stocks

All of the following qualifies as a capital in economics except ___.

paved roads

An example of physical capital is ______.

when the amount of human capital per worker and the state of technology are fixed, successive increases in the amount of physical capital per worker leads to a smaller increase in productivity.

Diminishing returns to capital suggests that ____.

real GDP must increase more rapidly than population

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

the production function will shift upward

If the economy experiences an improvement of its educational system such that a greater percentage of workers become college educated. It is reasonable to expect ____. (assuming all else equal)

domestic savings or foreign savings

Investment spending comes from either ______.

rising productivity

Long run economic growth is mostly dependent on ___.

both increased

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?

technological advances

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

increase, decrease

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

1.5%

Real per capita GDP in country X is eight fold in 140 years. What would be the average growth rate of real per capita GDP in country X?

about 40 years

Real per capital GDP in country X is 4 times that in country Y. Annual growth rate in country X is 1.75%, while in country Y it is 7%. How many years will it take for country Y to catch up to the real per capital GDP of country X?

Alta's real GDP grew more rapidly than Zorn's real GDP.

Refer to the above table. Between years 2 and 3:

Alta's real GDP grew more rapidly than Zorns real GDP

Refer to the above table. Per capita GDP was about:

it will lead to a long run increase in economic growth

Suppose the people in the United States increase their savings rate. How will this affect the rate of economic growth in the United States? (assuming all else equal)

labor productivity

The application of new technologies to the production process will increase

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

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

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

The convergence hypothesis ____.

current consumption

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

Physical Capital

The factories and machinery used to produce other goods and services

less an additional unit of capital adds to production

The principal 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 _______.

Human Capital

The talents, training, and education of workers.

0.875%

What is the approximate annual growth rate of a country whose living standard can double in 80 years?

Physical Capital

When a firm builds a new factory or purchases new equipment this is an investment in ____ ____.

there would be a downward movement along the production function.

When a major earthquake hit Japan and destroyed significant amount of physical capital, you would expect that ____. (assuming all else equal)

As countries acquire more physical capital, their labor productivity increases, assuming all else equal.

Which best explains the relationship between physical capital and the level of wealth in a country?

increases in real GDP

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

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

Marginal product of capital is positive and decreases as the quantity of capital increases.

Which of the following is true regarding marginal product of capital in the Solow growth model?

Average price level

Which of the following will NOT increase a nations real GDP?

environmental quality

conomic growth is usually measured in real GDP or real GDP per capita. A shortcoming of using real GDP (or real GDP per capita) as a measure of economic well-being is that is does not measure changes in ____.