Chapter 8 Macro Economics Connect Questions

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

Which of the following is a public investment in infrastructure?

A city builds a new water plant.

Which of these phenomena is responsible for the movement of women and minorities into high-productivity jobs?

A decline in discrimination

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

A decline in productivity growth rates

Which of the following cannot properly be called a part of infrastructure?

Human capital

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

Patents; copyrights

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.

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

True

Which of the following growth-promoting institutional structures creates a highly educated workforce?

Widespread education

Economists define and measure economic growth as ...

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

An important source of increasing labor productivity is ______.

an increase in the ratio of capital to labor

The two ways that society can increase its real output and income are by increasing its inputs of resources and ______.

by raising the productivity of those inputs

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

When productivity is improved through products and services that can satisfy large numbers of consumers at the same time, it is called simultaneous ______.

consumption

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

cultural

Unlike economists who argue in favor of rapid economic growth, economists who argue against it see rapid economic growth as ______.

damaging

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

demand

According to McConnell, better working conditions are best brought about by ______.

economic growth

Frantic paces on jobs, worker burnout, and alienated employees are all effects of ______.

economic growth

Firms are able to use larger, more productive equipment and employ methods of manufacturing and delivery that increase productivity when they enjoy ______ of scale.

economies

Reductions in per-unit production costs that result from increases in output levels are called ______.

economies of scale

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

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

financial institutions

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

working-age

Which of the following would limit the growth in poor countries because of reduced foreign direct investment and development?

A no-growth policy among industrial nations

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

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

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

Stronger productivity growth and heightened global competition

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

Technological

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

Technological advance

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

- 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 use more productive equipment. - As firms expand their size and output, they can employ more productive methods of delivery.

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

- Demand - Efficiency

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

- Efficiency - Demand - Supply

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

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

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?

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

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

- Increases in hours worked - Increases in labor productivity

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.

Identify the sources of increasing returns for firms.

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

Which of the following comprise technological advancement?

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

Which of the following summarize how the social-cultural-political environment of the United States has encouraged economic growth?

- 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. - Strong property rights - Free trade - Efficient financial institutions

Which of the following began as start-up firms in technology?

- PayPal - Intel - Cisco Systems

Identify the negative externalities that result from industrialization and growth.

- Pollution - Climate change

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

- Poverty - Pollution - Materialism

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 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 some possible reasons for the slowdown in productivity growth rates starting in 2010?

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

Select examples of infrastructure.

- Roads and bridges - Water supply system

Which of the following are sources of increasing returns?

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

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

- Start-up - High-growth

What are the negative effects of economic growth on the individual?

- Too much focus on materialism instead of community - High anxiety with the introduction of new technologies - High-stress environments due to the frantic pace

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

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

Economic growth provides society ______.

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

The expansion of total output relative to population results in which of the following?

- higher standards of living - rising incomes - rising real wages

Real GDP per capita means GDP ______.

per person

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

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

possibilities

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

private

When an economy uses its resources in the least costly way to produce goods and services, it is called ______ efficiency.

productive

When an economy uses its resources in the least costly way to produce goods and services, it is called ______.

productive efficiency

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

productive; allocative

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

productivity; global

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

property

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

real GDP per capita

The best economic growth measurement to compare living standards is ______.

real GDP per capita

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

real hourly earnings

Labor productivity is:

real output per hour of work

If the capital stock ______ and the quantity of labor decreases, labor productivity will probably ______.

remains fixed; increase

Learning by doing achieves greater productivity and lower average total cost through gains in knowledge and skill that accompany ______.

repetition of a task

The expansion of total output relative to population results in ______ real wages and income and _______ standards of living

rising; higher

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

When a firm purchases a customized inventory management system, it is ______.

specializing its inputs

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

true

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

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

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

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

year

The growth-promoting institutional structure that involves prices and profits serving as signals to guide production is called ______.

a competitive market system

Economic growth is calculated as ______.

a percentage rate of growth per quarter or per year

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

education

The two types of investment in human capital are on-the-job training and formal ______.

education

The four supply factors that constitute changes in physical and technical agents of production ______.

enable an economy to expand its potential GDP

Real economic growth can be misleading when annual population growth ______.

exceeds that of real GDP

Economic growth is made possible by the ______.

four supply factors that shift the production possibilities curve outward

The growth-promoting institutional structure that involves allowing countries to specialize in different types of output that can be produced most efficiently is called ______.

free trade

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

free; competitive

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

full employment

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

full employment

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

A nation's real GDP depends on labor ______ multiplied by labor ______.

hours; productivity

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

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

Firms that produce new products or pioneer new ways of doing business through "learning by doing" experience ______.

increasing returns

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

information

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

In any year, a nation's real GDP depends on hours of work multiplied by ______.

labor productivity

Output per hour of work is the definition of:

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 ______ countries.

leader

According to McConnell, economic growth has made working conditions ______.

less hazardous and more pleasant

One of the consequences of a no-growth policy is that it ______.

limits growth in poor nations

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

make workers more productive

A decline in the discrimination against women and minorities has resulted in

more women and minorities in higher-productivity jobs

Pollution, global warming, and ozone depletion are ______ externalities that result from economic growth.

negative

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

network

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

When society increases its inputs of resources and raises the productivity of those resources, it can increase real ______ and ______.

output; wages

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

Which of the following entities provides funding for public investment in infrastructure?

Government

Which of the following is not an investment in human capital?

A local company replaces its clerks' typewriters with PCs.

What are leader countries?

Countries that develop and use the most advanced technologies

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

False

Which growth-promoting institutional structure allows countries to specialize so that different types of output can be produced in the countries where they can be made most efficiently?

Free trade

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 is the primary feature of a competitive market system that makes it an important growth-promoting institution?

Price and profit market signals

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

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.b

What is the primary reason why a firm would use specialized inputs?

To improve capital and worker productivity

True or false: Real growth of GDP can be misleading when annual population growth exceeds that of GDP.

True

True or false: Technological advance and investment are related because technological advance promotes investment in new machinery and equipment.

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

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

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

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

the factors of production

Human capital refers to ______.

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

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

the microchip