Ch. 7 quiz

Which of these is likely to have the smallest impact on a country's growth in real GDP per capita? a 10% growth in the labor force, a 10% growth in technology, a 10% growth in the population, Equal rates of growth in technology, the population, and the labor force all will have an equal impact on economic growth.

a 10% growth in the population

If the Bureau of Economic Analysis reports that the annualized U.S. growth rate was 2.5% for the second quarter in a given year, then the actual growth rate from the first quarter to the second quarter was

actual growth rate = 2.5%/4 = 0.625%

Increases in _____ often lead to economic growth. population, capital, the money supply, government regulations

capital

Which of these is NOT an example of infrastructure in the United States? the state systems of public colleges and universities, the interstate highway system, desktop computers in the workplace, the electric power grid

desktop computers in the workplace

Government funding of Los Alamos National Labs is an example of the government acting in its role to promote economic growth by - ensuring a stable and secure financial system. - ensuring a stable legal system. - enhancing physical and human capital. - promoting free and competitive markets.

enhancing physical and human capital.

One way a stable financial system supports economic growth is that it - facilitates the movement of capital from savings to investment. - keeps tax rates low. - subsidizes borrowers of financial capital. - increases the incidence of unanticipated price changes.

facilitates the movement of capital from savings to investment.

Thomas Malthus believed that population increased _____ and food resources increased _____.

geometrically; arithmetically

If an economy's GDP will double in 15 years, then its growth rate must be about

growth rate = 70/15 = 4.7%

The capital-to-labor ratio is high in poor countries, high in rich countries, the ratio of managers to workers, a key element in decreasing real wages.

high in rich countries

As a general rule, the more capital employed with workers, the _____ their productivity and the _____ their earnings.

higher; higher

In the absence of copyright and patent laws - innovators can invent more because they do not have to spend resources navigating the legal system. - the profits of writers and inventors rise. - the quality of goods and services consumed by purchasers improves. - it is difficult for innovators to profit from their efforts.

it is difficult for innovators to profit from their efforts.

The Index of Economic Freedom - measures the degree of tolerance with respect to drugs. - is completely objective. - measures the distribution of income. - measures the quality of a country's intangible infrastructure.

measures the quality of a country's intangible infrastructure.

Which of these is NOT a factor in the production function? - Labor - money - technology - capital

money

Which is NOT a source of productivity growth? - moving resources from production to pension benefits - making investments in technological improvements - raising the capital-to-labor ratio - increasing the quality of labor

moving resources from production to pension benefits

When Main Street Bank buys new automatic teller machines, the quantity of _____ in the economy increases. - labor - physical capital - entrepreneurial ability technology, and ideas - land and natural resources

physical capital

The catch-up effect tends to remain the same over time, speed up over time, remain the same over time unless new technologies are developed, slow down over time.

slow down over time.

The classical form of the production function states that output is determined by - the government. - population growth. - some function of available labor or capital. - some function of the money supply.

some function of available labor or capital.

If a country's population increases at a higher rate than the growth rate of its real GDP - average output per person remains constant. - GDP per capita has increased. - the country's rate of inflation has increased. - the standard of living in the country has decreased.

the standard of living in the country has decreased.