econ study guide ch 7

when main street bank buys new automatic teller machines, the quantity of _________ in the economy increases

physical capital

the classical form of the production function states that output is determined by

some function of available labor or capital

which is not an example of infrastructure

walmart stores

land and natural resources include

water and minerals that come from the earth

the world bank defines extreme poverty as a person living on less than

$1.25 per day

which of the following items is not an example of investment in human capital

acquisituion of obsolete skills

increases in ___________ often lead to economic growth

capital

joseph's schumpeter's idea that waves of innovations lead to business cycles is called

creative destruction

when the government funds head start, it is acting in its role to promote economic growth by

enhancing physical and human capital

unanticipated ___________ is detrimental to economic growth

inflation or deflation

the rule of 70 states that the number of years required for a value to double in size is

70 divided by the growth rate

if the bureau of economic analysis reports that the annualized US growth rate was 2.5% for the second quarter, then the actual growth rate from the first quarter to the second quarter was

0.625%

rocky gap furniture employs 10 workers working 8 hours each to produce 100 rocking chairs. what is the productivity of these workers

1.25 chairs per hour

one reasonably objective measure for infrastructure is the index of economic freedom, which incorporates information about freedoms in _________ categories

10

if an economy's gdp will double in 25 years, then its growth rate must be about

2.8%

if the growth rate in an economy is 3.5% then its gdp will double in about

20 years

the percentage of the worlds population that is poor, defined by the $2 per day threshold is about

30%

if the growth rate in an economy is 2%, its gdp will double in about

35 years

if an economy's gdp will double in 15 years, then its growth rate mmust be about

4.7%

which of the following is a source of increases in productivity

all of the answers are correct

in his essay on population, malthus argued that any improvement in the standard of living would lead to

an increase in the population that would outstrip the growth in food supply

whcih of the following does not increase productivity

an increased money supply

which of the following statements is false

economic growth always leads to a more equitable distribution of income

which of the following resources is an example of infrastructure

elementary school

government funding of los alamos national labs is an example of government acting in its role to promote economic growth by

enhancing physical and human capital

the government decides to give tax exempt status to new organization whose mission is to award college scholarships to members of the armed forces. in doing so, the government is acting in its role to promote economic growth by

enhancing physical and human capital

the government decides to subsidize the development of a new communications network it is acting in its role to promote economic growth by

enhancing physical and human capital

when the government enforces contracts between two parties, it is acting in its role to promote economic growth by

ensuring a stable legal system

improvements in technology

explain most of the economic growth in recent decades

malthus believed that population increased _____________ and food resources increased

geometrically, arithmetically

the primary reason the US standard of living is relatively __________ is that US workers produce___________ than workers throughout most of the rest of the world

high, more

as a rule, the more capital employed with workers, the ___________________ their productivity and the ______________ their earnings

higher, higher

which of the following increases productivity

increased skill in the labor force

all of the following are considered source s of long run growth except

increases in demand

schumpter's term creative destruction describes the

innovative dynamism of capitalism

property rights consist of ___________ goods that _______________ be easily measured

intangible , cannot

which statement about the rule of 70 is not true

it becomes more accurate over time

investment in human capital is important because

it increases labor productivity

which statement about short run economic growth is not true

it is likely to occur when ostacles preventing resources from being used are put in place

which statement about long run economic growth is true

it is likely to occur when the capacity to produce goods and services increases

the natural gas deposits found in the united states over the past decade are an example of an increase in

land and natural resources

if a country has a low capital to labor ration, then it tends to have

low labor productivity and low wages

which of the following technologies most strongly affected the growth in us productivity in recent decades

microcomputers

a production function of the sort that says output per worker equals a* f(l/l, k/l, h/l, n/l) tells us all of the following except that ____________ will lead to a better standard of living

more people

which is not a source of productivity growth

moving resources from production to pension benefits

the classical form of the production function states that

output= f(l,k)

the catch up effect tends to

slow down over time

what is the primary explanation for the rapid growth of the us economy over the last century

technological progress

increases in ________ often lead to economic growth

technology

every year in india

tens of millions of people get out of poverty

which of the following statements about the role of social media in promoting economic growth is false

the advent of social media raised costs for firms, which now much invest in web ages and information gathering technology to stay competitive

on the job training can lead to an increase in

the quality of the labor force

if a country's population increases at a higher rate than the growth in its real gdp

the standard of living in the society has declined

because of the work of __________ during the late 18th and early 19th cenutries, economics became known as the dismal science

thomas malthus

policy makers look at ___________________ to compare growth rates over an entire year without seasonal ups and downs

year over year gdp growth rates

total factor productivity would not change if

a major new source of oil was discovered

the table shows that the country with the most productive workers is

country A

which of the following is not a source of productivity growth

decreasing the capital to labor ratio

the us patent office grants rene a patent for a new method of waterproofing outdoor gear. it is acting in its role to promote economic growth by

ensuring a stable legal system

the ability to use physical resources in creative ways to produce goods and services is known as

entrepreneurial ability, technology, and ideas

the capital to labor ratio is

high in rich countries

the higher the productivity of a nation, the

higher is its standard of living

technology

improves the productivity of all factors

which of the following occurrences is not a source of productivity growth

increasing the level of consumption spending

one reasonably objective measure of intangible infrastructure is the

index of economic freedom

one of the reasons that property rights are important for economic development is that without legal ownership

loans are very difficult to obtain

physical capital includes

manufactured products that are used to produce other goods and services

an example of intangible infrastructure is

patent laws

according to malthus, what part of the economy might increase at a rate such that the data would show an increase from 1,000 to 2,000 to 4,000 to 16,000

population

infrastructure is defined as a countrys

public capital

economic growth is most commonly measured by

real gdp per capita

improvements in production capacity will

shift the ppf outward

a stable financial system is important for all of the following reasons except

tax rate stability

human capital includes

the improvements to labor capabilities from training, education, and apprenticeship programs

for which growth rate would the rule of 70 be most accurate

1%

if output equals a*(5k+2l), what is output if a equals 2,000, capital equals 10, and labor equals 100

500,000

the historical evidence shows that

a country's defree of freedom is related to the level of economic growth

infrastructure is

a country's public capital

according to malthus, a fixed quantity of land and a growing human population will eventually produce

a stationary statein which growth will cease

which of the following factors is not generally viewed by economists as critical to economic growth

access to a large amount of natural resources

the recent global financial instability

all of the answers are correct

decreasing the accessibility to college in order to funnel workers into the workforce faster will

decrease productivity of the economy

which of the following is not an example of infrastructure in the US

desktop computers in the work place

when the government records a deed showing that ownership of a piece of property has passed from one party to another, it is acting in its role to promote economic growth by

ensuring a stable legal system

one way a stable financial system supports economic growth is that it

ficilitates the movement of capital from savings to investment

to have long term economic growth, the production function suggests

increasing the availability of echnology, capital, and labor

according to schumpeter, the most important activity that drives business cycles is

innovation

excessive inflation or deflation

interferes with the price mechanism that brings a market to equilibrium

in the absence of copyright and patent laws

it is difficult for innovators to profit from their efforts

an increase in physical capital per worker will

lead to more output per worker

the index of economic freedom

measures the quality of a country's intangible infrastructure

generally, nations with the ____________economic freedom also have the ______________ per capita gdp

most; highest

the relationship between economic freedom and per capita gdp is

positive

over the past century, when worker productivity rose

real wages rose

a production function

shows the output that is produced using different combinations of inputs combined with existing technology

which of the following occurrences is the key explanation for the high economic growth in the united states in the past century

technology improvements

labor includes all of the following factors except

the ability to use physical resources in creative ways to produce goods and services

creative destruction occurs when

the periodic emergence of innovation boosts the economy