Macro CH 8 Reading

Efficiency factor is when an economy must achieve economic efficiency as well as ____ _________ to reach its full production.

full employment

Real GDP per capita means GDP ______.

per person

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

demand

Which of the following statements best summarizes the growth in real GDP in the United States between 1950 and 2018? A) Real GDP tripled. B) Real GDP remained constant. C) Real GDP rose more than tenfold. D) Real GDP grew at an annual rate of about 3.1 percent.

Real GDP grew at an annual rate of about 3.1 percent.

Economists define and measure economic growth as ______.

an increase in real GDP per capita over some period of time

Labor productivity significantly rises as the firm sells more units of a product, consequently resulting in lower per-unit cost of production because workers ______.

can specialize and the firm can spread product costs over greater output

Reductions in per-unit production costs that result from increases in output levels lead to _________ of _____.

economies; scale

The growth-promoting institutional structures that involve banks and the stock and bond markets are called efficient _________ institutions.

financial

Workers today are more productive than workers in the past because ______.

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

Which of the following are some possible reasons for the slowdown in productivity growth rates starting in 2010? - Increases in technological innovation - Accumulation of high debt levels - Overcapacity - Recent products like Internet apps that are free and do not generate a measurable effect on GDP

- Accumulation of high debt levels - Overcapacity - Recent products like Internet apps that are free and do not generate a measurable effect on GDP

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

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

Economic growth provides society ______.

- higher living standards - more goods and services - greater material abundance

Economic growth can be illustrated when the demand factor and the efficiency factor shift the production ____________ curve outward.

possibilities

Stronger ______ growth and heightened ______ competition allow the economy to achieve a greater rate of economic growth.

productivity; global

Real GDP divided by the size of the population is called ______.

real GDP per capita

Ideally, a nation acquires funds for investment spending on plant and equipment by ______ income.

saving

Sources of funds for investment spending in plant and equipment are ______.

savings by households, governments, and foreigners

Streaming movies to customers is an example of ______.

simultaneous consumption

The ability of software programs, songs on CDs, and movies on DVDs to satisfy large numbers of customers at the same time is an example of ______.

simultaneous consumption

Literacy and widespread _________ is the growth-promoting institutional structure that contributes to a productive labor force.

education

Economic growth is made possible by the ______.

four supply factors that shift the production possibilities curve outward

Strong property rights, ______ trade, patents and ______ market systems are all growth-promoting institutional structures.

free; competitive

Over time, when workers move from low-productivity to high-productivity employment, it is called ______.

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

Output per hour of work is the definition of:

labor productivity

A product that increases in value as more people use it is a product that benefits from _______ effects.

network

Human capital refers to ______.

knowledge and skills that make a worker productive

An increase in productivity growth is important because real output, real income and real wages are linked to ______.

labor productivity

The two main supply-side elements that contribute to changes in real GDP are increases in hours worked and increases in ______.

labor productivity

The fraction of the working-age population that is in the labor force is called the ______ rate.

labor-force participation

Countries that develop and use the most advanced technologies, which then became available to follower countries, are known as _______ _________.

leader countries

Increases in capital are important to productivity growth because increases in the quantity and quality of capital ______.

make workers more productive

What is potentially the result of overcapacity and the stalling of technological progress?

A decline in productivity growth rates

True or false: Countries that experienced economic growth earlier than other countries have lower average incomes today.

False

Which of the following cannot properly be called a part of infrastructure? A) Power lines B) Human capital C) Roads and bridges D) Seaports

Human capital

True or False: Investment in both private and public capital is conducive to economic growth and higher productivity.

True

The determinants that directly affect economic growth can be grouped into which of the following categories?

- Demand - Supply - Efficiency

Economic growth is realized when the production possibilities curve shifts because of changes in which of the following factors?

- Efficiency - Demand

What are the two supply-side elements of real GDP?

- Increases in hours worked - Increases in labor productivity

What are leader countries?

Countries that develop and use the most advanced technologies

Which of the following factors of productivity growth helps to promote the development of new forms of business organization? A) Quantity of capital B) Improved resource allocation C) Economies of scale D) Technological advance

Technological advance

Which of the following statements best summarizes the real economic growth per capita in the United States between 1950 and 2018? A) Real GDP per capita rose nearly fourfold. B) Real GDP remained constant. C) Real GDP rose more than tenfold. D) Real GDP per capita doubled.

Real GDP per capita rose nearly fourfold.

Economic growth is calculated as ______.

a percentage rate of growth per quarter or per year

The fraction of the ______ population that is in the labor force is called the labor-force participation rate.

working-age

Economic growth is normally calculated as a percentage rate of growth per quarter or per _____.

year

Other than a higher standard of living and more innovations, which of the following are true of the impacts of modern economic growth in industrialized nations?

- Elimination of archaic social norms - Increase in democracies - Increased leisure time and arts

Identify the supply factors that are "determinants" of economic growth.

- Improvements in technology - Increases in the quantity and quality of human resources - Increases in the quantity and quality of natural resources - Increases in the supply of capital goods

Which of the following began as start-up firms in technology? - Wal-Mart - Intel - Cisco Systems - PayPal

- Intel - Cisco Systems - PayPal

Which of these explain why growth is an important economic goal? - It increases standards of living. - It increases real wages and incomes. - It increases a society's ability to resolve socioeconomic problems. - It results in deflation or disinflation.

- It increases standards of living. - It increases real wages and incomes. - It increases a society's ability to resolve socioeconomic problems.

Which of the following are sources of increasing returns?

- Learning by doing which reduces the time to perform tasks - Spreading of development costs over greater output - Network effects which increase the value of the product to each user as the total number of users rises - More specialized inputs such as specialized workers and inventory management systems - Simultaneous consumption which allows large numbers of customers to be served at the same time

What do antigrowth economists cite as evidence in favor of their argument that growth is undesirable?

- Materialism - Pollution - Poverty

Identify the sources of increasing returns for firms.

- Network effects - Learning by doing - Simultaneous consumption - Spreading of development costs - More specialized inputs

Which of the following comprise technological advancement? - An increase in the supply of natural resources - New forms of business organization - New managerial methods - Innovative production techniques

- New forms of business organization - New managerial methods - Innovative production techniques

Which of the following summarize how the social-cultural-political environment of the United States has encouraged economic growth? - Wealth creation considered an antisocial goal - No social or moral taboos on production - A competitive market system - A negative attitude toward risk taking

- No social or moral taboos on production - A competitive market system

Which of the following are growth-promoting institutional structures?

- Patents and copyrights - Competitive market system. - Free trade - Efficient financial institutions - Strong property rights

Which of the following are arguments against rapid economic growth? - Rapid economic growth is unsustainable due to the earth's finite resources. - Rapid economic growth reduces both the marginal propensity to consume and the marginal propensity to save in an economy. - Rapid economic growth has not solved sociological problems like poverty and homelessness. - Rapid economic growth results in pollution, global warming and other environmental problems.

- Rapid economic growth is unsustainable due to the earth's finite resources. - Rapid economic growth has not solved sociological problems like poverty and homelessness. - Rapid economic growth results in pollution, global warming and other environmental problems.

Which of the following are the types of firms to which Apple and Dell belong?

- Start-up - High-growth

Which of the following institutional structures promote and sustain modern economic growth?

- Strong property rights that give citizens the right to own investments and property - Widespread education for the workforce that will promote new technology innovations and implementation - Financial institutions that channel the savings generated by households toward businesses, entrepreneurs and inventors - Patents and copyrights giving inventors and authors the exclusive right to market and sell their creations for a period of time

Select from the following those that contributed to the spectacular advancement in information technology.

- The Internet - Fiber-optic cable - The computer - Wireless technology

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

Improved resource allocation

Which of the following helps explain why the growth rate in the United States has been positive during the 1900s? A) The increase in labor productivity B) The reduction in oil prices C) The reduction in nominal wages D) The increase in the minimum wage

The increase in labor productivity

Why do economists pay so much attention to small changes in the rate of economic growth?

These changes have large effects on the volume of output.

True or false: Growth enables society to improve nations' infrastructure.

True

True or false: The competitive market system tends to drive the economy toward productive and allocative efficiency.

True

Products that can be simultaneously consumed can be made available to thousands or even millions of buyers at what cost?

Very low cost

Modern economic growth has significantly increased the standard of living as well as ________, social, and political arrangements.

cultural

The growth-promoting institutional structures that involve banks and the stock and bond markets are called ______.

financial institutions

An economy that is experiencing economic ______ is better able to meet people's wants and resolve socioeconomic problems.

growth

Those countries which experienced modern economic growth earlier than other countries now have significantly ______.

higher standard of living

If the amount of capital per worker __________, labor productivity will increase.

increases

Increased capital is important to productivity growth because the ______ in the quantity and quality of capital will make workers ______ productive.

increases; more

A situation in which a given percentage increase in the amount of inputs a firm uses leads to an even larger percentage increase in the amount of output the firm produces is called __________ returns.

increasing

A situation in which a given percentage increase in the amount of inputs a firm uses leads to an even larger percentage increase in the amount of output the firm produces is called ______.

increasing returns

Computers, fiber-optic cable, wireless technology, and the Internet represent advances in a special type of technology known as __________ technology.

information

Software and Internet services become more beneficial to a buyer the greater the number of households and businesses that also buy them. This is called ______.

network effects

Economic growth made possible by the four supply factors is illustrated by the ______ the production possibilities curve.

outward shifting of

The growth-promoting institutional structure that involves giving inventors and authors the exclusive right to market and sell their creations is ______.

patents and copyrights

_______ and __________ give a strong financial incentive to inventors and authors to invent and create.

patents; copyrights

Public investment in U.S. infrastructure like roads and bridges promotes _______ investment in new factories and retail stores.

private

The competitive market system tends to drive the economy toward __________ and __________ efficiency.

productive; allocative

The growth-promoting institutional structure that involves the ability of citizens to own land, houses and businesses is called private ________ rights.

property

Increasing productivity leads to improved standards of living by increasing ______.

real hourly earnings

When firms divide high product development costs over greater output, they are ______.

spreading development costs

'' 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

A new firm focused on creating and introducing a particular new product or employing a new production or distribution method is called a(n) _____-__ firm.

start-up

A new firm focused on creating and introducing a particular new product or employing a new production or distribution method is called a ______.

start-up firm

Because people will not invest if they believe that thieves, bandits, or a rapacious and tyrannical government will steal their investments or their expected returns, ______ are important.

strong property rights

The six "determinants" of economic growth are grouped into three categories: one demand factor, four ______ factors, and one efficiency factor.

supply

Economic growth is made possible due to ______ that shift the production possibilities curve outward.

the factors of production

The core element of the productivity speedup between 1995 and 2010 was an explosion of entrepreneurship and innovation based on ______.

the microchip

The efficiency factor involves both productive and allocative efficiency, which means in order to reach its full production potential an economy must ______.

use its resources in the least costly way to produce the specific mix of goods that maximizes people's well-being