Macroecon chap 8

Which of the following statements is correct?

Which of the following statements is correct?

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

free; competitive

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

growth

In the period following the Great Recession, the creation of new Internet apps has

had little measured effect on GDP or productivity but may create a lot of consumer surplus.

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

higher standard of living

A nation's economic growth from one year to the next depends on its ______.

increase in labor inputs and increase in labor productivity

(Last Word) From 1960 to today, women's labor-force participation rate in the U.S.

increased from about 40 percent to 60 percent.

Supply factors in economic growth include the following, except

increases in purchases of output.

Increasing returns in production imply the following, except

increasing labor-requirements per unit of output.

Technological advances that contribute to economic growth include the following, except

innovative digital gadgets for consumers.

If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately

14 years

In 2008, living standards in the United States were nearly ______ times higher than those in Africa.

19

1. Improvements in technology. 2. Increases in the supply (stock) of capital goods. 3. Purchases of expanding output. 4. Obtaining the optimal combination of goods, each at least-cost production. 5. Increases in the quantity and quality of natural resources. 6. Increases in the quantity and quality of human resources. Which set of items in the accompanying list would move an economy from a point inside its production possibilities curve to a point on its production possibilities curve?

3 and 4 only

1. Improvements in technology. 2. Increases in the supply (stock) of capital goods. 3. Purchases of expanding output. 4. Obtaining the optimal combination of goods, each at least-cost production. 5. Increases in the quantity and quality of natural resources. 6. Increases in the quantity and quality of human resources. Use the accompanying list to answer the following question. As distinct from the supply factors and demand factor of economic growth, the efficiency factor(s) of economic growth is (are)

4 only.

Which of the following are growth-promoting institutional structures?

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

Which of the following arguments is not made by critics of growth policies?

Growth may have given us the good life, but we cannot better it anymore.

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

Increases in hours worked Increases in labor productivity

Which of the following are some possible reasons for the slowdown in productivity growth rates starting in 2010?

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

Which of the following are growth-promoting institutional structures?

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

Which of the following statements best summarizes the real economic growth per capita in the United States between 1950 and 2018?

Real GDP per capita rose nearly fourfold.

Which of the following is not a supply factor in economic growth?

aggregate expenditures of households, businesses, and government

Economists define and measure economic growth as ______.

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

Given the annual rate of economic growth, the "rule of 70" allows one to

calculate the number of years required for real GDP to double.

Suppose that an economy is initially operating at a point on its PPC. If it then experiences an expansion in its production capacity, but its total spending does not rise as fast as its capacity, the economy will end up

inside its production possibilities curve.

Human capital refers to ______.

knowledge and skills that make a worker productive

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

labor productivity

What is the efficiency factor?

The level of economic efficiency and full employment needed to reach full production potential.

Reasons for the rise in productivity growth between 1995 and 2010 include the following, except

a decline in population.

Between 2018 and 2029, productivity growth is expected to account for about ________ percent of the growth of real GDP in the United States.

87

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

A decline in productivity growth rates

Which of the following comprise technological advancement?

New managerial methods Innovative production techniques New forms of business organization

Which of the following are arguments against rapid economic growth?

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.

Which of the following allow the economy to achieve a higher rate of economic growth?

Stronger productivity growth and heightened global competition

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

Supply Demand Efficiency

Which of the following helps explain why the growth rate in the United States has been positive during the 1900s?

The increase in labor productivity

What is the demand factor?

The level of purchases needed to maintain full employment

What are the four supply factors of economic growth?

The quality and quantity of human resources The stock of capital goods The level of technology The quality and quantity of natural resources

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.

Suppose that work hours in New Zombie are 200 in year 1, and productivity is $8 per hour worked. a. What is New Zombie's real GDP? b. If work hours increase to 210 in year 2 and productivity rises to $10 per hour, what is New Zombie's rate of economic growth?

a. $1600 a. New Zombie's real GDP in a given year equals hours worked multiplied by productivity. New Zombie's real GDP in year 1 equals $1,600 (= 200 × $8). b. 31.25% New Zombie's real GDP in year 2 equals $2,100 (= 210 × $10). We now use these values to find the rate of economic growth. New Zombie's rate of economic growth equals 31.25 percent = [($2,100 − $1,600)/$1,600] × 100.

Identify the following arguments about economic growth as either anti-growth or pro-growth. a. Growth means worker burnout and frantic schedules b. Rising incomes allow people to buy more education, medical care, and recreation c. Earth has only finite amounts of natural resources d. Even the richest countries still have poverty, homelessness, and discrimination e. Richer countries spend more money protecting the environment f. Natural resource prices have fallen rather than increased over time

a. Anti-growth b. Pro-growth c. Anti-growth d. Anti-growth e. Pro-growth f. Pro-growth

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

cultural

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

the microchip

Which of the countries below ranked highest in the World Economic Forum's Global Competitiveness Ranking in 2017-2018?

Switzerland

The following factors tend to make the real GDP growth rate understate the growth of economic well-being, except

debasement of the environment.

Labor productivity is:

real output per hour of work

Economic growth provides society ______.

more goods and services greater material abundance higher living standards

Increases in the value of a product to each user, including existing users, as the total number of users rises are called

network effects.

Refer to the graph. An increase in an economy's labor productivity would

shift curve AB to CD.

A piece of software that benefits many users at the same time would be an example of

simultaneous consumption.

Fill in the Blank Question Fill in the blank question. Reductions in per-unit production costs that result from increases in output levels lead to

economies of scale

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

leader countries.

Factors that contributed to the higher U.S. labor productivity growth in 1995-2010 relative to the earlier period include the following, except

population growth.

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

productivity; global

Suppose that an economy's labor productivity fell by 3 percent and its total worker-hours remained constant between year 1 and year 2. We could conclude that this economy's

real GDP declined.

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

The supply factors that are part 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

1. Improvements in technology. 2. Increases in the supply (stock) of capital goods. 3. Purchases of expanding output. 4. Obtaining the optimal combination of goods, each at least-cost production. 5. Increases in the quantity and quality of natural resources. 6. Increases in the quantity and quality of human resources. Which set of items in the accompanying list would shift an economy's production possibilities curve outward?

1, 2, 5, and 6 only

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

Technological advance

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

demand

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

demand factor

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

full employment

The demand factor involves households, businesses, and government purchasing the economy's expanding output of goods and services so that there will be ______.

no unplanned increase in inventories and resources will remain fully employed

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

the real hourly earning

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

Real per capita GDP

was much more equal across nations in 1820 than it is today.

What annual growth rate is needed for a country to double its output in each of the following cases? a. In 7 years b. In 35 years c. In 70 years d. In 140 years

a. 10% b. 2% c. 1% d. 0.5% The rule of 70, which is to divide 70 by the rate of growth, gives us the time it takes for a country to double its output: Years to double = (70/rate of growth). Rearranging this equation: Rate of growth = (70/years to double). a. The annual growth rate needed for a country to double its output in 7 years is 10 percent (= 70/7). b. The annual growth rate needed for a country to double its output in 35 years is 2 percent (= 70/35). c. The annual growth rate needed for a country to double its output in 70 years is 1 percent (= 70/70). d. The annual growth rate needed for a country to double its output in 140 years is 0.5 percent (= 70/140).

(Last Word) Factors that have contributed to the increase in women's labor-force participation rate in the U.S. include the following, except

an increase in the number of children, requiring mothers to find work along with fathers.

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

supply