Quiz #5

If real GDP grows at 7 percent per year, then real GDP will double in approximately _________ years.

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Suppose that Alpha and Omega have identically sized working-age populations but that total annual hours of work are much greater in Alpha than in Omega. This could happen because

Omega's labor force is underemployed, or Omega workers place a higher value on leisure than those in Alpha.

Consider the following data for the country below. Year Population (Millions) Real GDP (Trillions of $) 1 200 14 2 250 21 Instructions: Enter your answers as whole numbers. a. What is the growth rate of real GDP from year 1 to year 2? b. What is the growth rate of real GDP per capita from year 1 to year 2?

a. Real GDP growth = ((Real GDP in Year 2 - Real GDP in Year 1)/Real GDP in Year 1)*100% = ((21- 14)/14)*100% = 50% b. Growth in GDP per Capita = Growth rate of real GDP - Growth rate of population Growth rate of population = ((Population in Year 2 - Population in Year 1)/Population in Year 1)*100% = ((250 - 200)/200)*100% = 25% Growth in GDP per Capita = 50% - 25% = 25%

Suppose a country's real GDP is $18 trillion and that population is 400 million. Instructions: Enter your answers as whole numbers. a. What is this country's real GDP per capita? Suppose that during the next 10 years, real GDP doubles and population triples in the country. b. After 10 years have passed, what will be this country's real GDP per capita?

a. Real GDP per capita = Real GDP/Population = $18 trillion/400 million = $45,000 b. real GDP per capita = Real GDP/Population = $36 trillion/1.2 billion = $30,000

a. What are the four supply factors of economic growth? Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. b. What is the demand factor? c. What is the efficiency factor?

a. The quality and quantity of human resources. ( checked ) The level of technology. ( checked ) The type of government. ( unchecked ) The stock of capital goods. ( checked ) The number of trading partners. ( unchecked ) The quality and quantity of natural resources. ( checked ) b. 1.) Changes in total spending. 1 DEMAND FACTOR - There will be no unplanned increases in inventories and resources will remain fully employed because of increased demand. c. 1.) Changes in how well an economy achieves ALLOCATIVE and PRODUCTIVE efficiency. 1 EFFICIENCY FACTOR - The economy must use its resources in the lease costly way (productive efficiency) to produce the specific mix of goods and services that maximizes peoples well-being (allocative efficiency). Expanded production and utilization of all resources not enough--need efficiency.

Assume that the hypothetical economy of Molpol has 10 workers in year 1, each working 2,000 hours per year (50 weeks at 40 hours per week). The total input of labor is 20,000 hours. Productivity (average real output per hour of work) is $10 per worker. Instructions: In parts a and b, round your answers to the nearest whole number. In part c, round your answer to 2 decimal places. a. What is real GDP in Molpol? Suppose work hours rise by 1 percent to 20,200 hours per year and labor productivity rises by 4 percent to $10.4. b. In year 2, what will be Molpol's real GDP? c. Between year 1 and year 2, what will be Molpol's rate of economic growth?term-10

a. To calculate the Real GDP of Molpoi, multiply the total input of labor by the productivity of labor. Total input of labor=20,000 Productivity of labor=$10 Real GDP=20000*$10=$200,000 b. The input of labor increases by 1% to 20,200 and productivity increases by 4% to $10.4 The new Real GDP will be: (20200*10.4)=2020*$104=$210,080 Real GDP=$210,080 c. The initial real GDP will be: Real GDP=Total input of labor*Productivity of labor. Total input of labor=20,000 Productivity of labor=$10 Real GDP=20000*$10=$200,000 The input of labor increases by 1% to 20,200 and productivity increases by 4% to $10.4 The new Real GDP will be: (20200*10.4)=2020*$104=$210,080 Between year 1 and year 2,the Molpol's rate of economic growth will be: ($210,080-$200,000)200,000=0.0504*100%=5.04%

a. Technological advance is destined to play a more important role in the future. b. Many public capital goods are complementary to private capital goods. c. Immigration has slowed economic growth in the United States.

a. True b. True c. False

a. The benefits of economic growth, particularly as measured by real GDP per capita, include b. Which of the following best describes the costs of economic growth, particularly those measured by real GDP per capita?

a. higher living standards for the vast majority of people. b. Economic growth has not solved sociological problems such as poverty, homelessness, and discrimination.

a. The 1995 to 2010 increase in the trend rate of productivity growth has been b. The 1995 to 2010 increase in the trend rate of productivity growth has been c. The 1995 to 2010 increase in the trend rate of productivity growth has been d. The 1995 to 2010 increase in the trend rate of productivity growth has been

a. positively influenced by information technology because it connects information in all parts of the world with information seekers b. positively influenced by information economies of scale because expanding production has a very low marginal cost c. positively influenced by network effects, which is a type of scale economy d. positively influenced by global competition, which has expanded market possibilities for both consumers and producers

a. More labor inputs can explain b. Since at least 1995 the majority of increases in U.S. real GDP are from c. Rearrange the following contributors to the growth of productivity in descending order of their quantitative importance: economies of scale, quantity of capital, improved resource allocation, education and training, and technological advance.

a. some of the increases in U.S. real GDP during the last 62 years or so b. productivity growth. c. Technological advance, quantity of capital, education and training, economies of scale, and improved resource allocation.

Real GDP equals _________ times _________.

labor input ; labor productivity