Econ 102 Chapter 7
In 2011, Armenia had a real GDP of $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. What was Armenia's economic growth rate from 2011 to 2012? A) 9.0 percent B) 0.38 percent C) 3.8 percent D) 8.3 percent
A
Moving along the aggregate production function shows the relationship between ________, holding all else constant. A) labor input and real GDP B) labor input, capital input and real GDPC) technology and real GDP D) capital input and real GDP
A
Slowdonia's current growth rate of real GDP per person is 1 percent a year. Approximately how long will it take to double real GDP per person? A) 70 years B) 35 years C) 10 years D) 100 years
A
Real GDP Growth Rate =
(Real GDP present)-(Real GDP past)/(Real GDP past)
Real Wage Rate =
(money or nominal wage rate)/(price level)
Economic Growth Rate =
(percent change in annual)/(Real GDP)
A decrease in population shifts the A) labor supply curve rightward. B) labor supply curve leftward. C) labor demand curve rightward. D) labor demand curve leftward.
B
Which growth theory predicts perpetual growth? A) classical growth theory B) new growth theory C) neoclassical growth theory D) none of the above
B
In the labor market, an increase in labor productivity ________ the real wage rate and ________ the level of employment. A) lowers; decreases B) raises; decreasesC) lowers; increases D) raises; increases
D
According to the Economic Times (09/2012), Standard & Poor's forecast for India's GDP growth rate was cut by 1 percentage point to 5.5 percent as the entire Asia Pacific region feels the pressure of ongoing economic uncertainty. India has averaged 7 percent growth in GDP since 1997. Which of the following is TRUE? A) India's PPF has not shifted since 1997. B) India's PPF has been shifting rightward since 1997.C) India has been moving from a point within its PPF to points beyond its PPF. D) India's PPF has been shifting leftward since 1997.
B
All of the following would increase the growth rate of the economy EXCEPT __________ A) stimulating research and development B) discouraging international trade C) raising the saving rate D) none of the above
B
An advance in technology increases the productivity of labor. As a result, the nation's production function shifts ________ and the ________ labor curve shifts rightward. A) downward; supply of B) upward; demand forC) upward; supply of D) downward; demand for
B
As labor increases, there is a A) movement along the aggregate production function, but no shift in it.B) movement along the aggregate production function and real GDP will increase less with each additional increase in labor. C) movement along the aggregate production function and real GDP will decrease less with each additional increase in labor. D) shift of the aggregate production function, but no movement along it.
B
In 2016, Armenia had a real GDP of approximately $4.21 billion and a population of 2.98 million. In 2017, real GDP was $4.59 billion and population was 2.97 million. From 2016 to 2017, Armenia's standard of living A) decreased.B) increased. C) did not change.D) might have increased, decreased, or remained unchanged but more information is needed to determine which.
B
New growth theory proposes that real GDP per person grows because of _______ and that growth ________ A) productivity shocks; occurs randomly B) the pursuit of profit; can persist indefinitely C) technological change; can only increase above the subsistence level temporarily D) productivity shocks; can persist indefinitely
B
The aggregate production function is graphed as A) an upward sloping line that becomes steeper as the quantity of labor increases. B) an upward sloping line that becomes flatter as the quantity of labor increases. C) an upward sloping straight line.D) a downward sloping curve.
B
The assumption that population growth will lead to a fall in real GDP per person rate back to subsistence level is A) central to the new growth theory B) associated with Malthusians C) part of the neoclassical school of growth theory D) accepted by all economists today
B
Which of the following does NOT increase labor productivity? A) physical capital growth B) increases in aggregate hours C) human capital growth D) technological advances
B
A central proposition of the new growth theory is that A) government direction and oversight is necessary for consistent growth B) growth is often just an illusion fostered by growth accounting C) knowledge is not subject to diminishing returns D) growth will cease but prosperity will persist
C
An increase in education and training A) increases the employment-to-population ratio B) decreases real GDP growth C) increases labor productivity D) increases aggregate hours
C
Potential GDP per labor hour can increase due to A) increases in population. B) increases in the quantity of money. C) increases in labor productivity. D) decreases in the quantity of capital.
C
The more education that workers have, the _______ is their human capital and the _______ is their productivity. A) smaller; smaller B) smaller; higher C) larger; higher D) larger; smaller
C
The quantity of labor supplied depends on the A) price of output not the money wage rate nor the real wage rate. B) money wage rate not the real wage rate.C) real wage rate not the money wage rate.D) level of profits.
C
An advance in technology will A) not shift the production function but will lead to a movement down along the production function. B) not shift the production function but will lead to a movement up along the production function.C) shift the production function downward.D) shift the production function upward.
D
If real GDP is $13,000 billion and aggregate hours are 270 billion, labor productivity equals A) $6.50 per hour. B) $45 per hour. C) $650 per hour. D) $48 per hour.
D
If the nation's capital stock increases so that workers become more productive, the A) supply of labor will increase. B) demand for labor will decrease. C) supply of labor will decrease. D) demand for labor will increase.
D
Labor productivity, real GDP per labor hour, increases if A) there is an increase in the accumulation of human capital B) new technologies are continuously discovered C) saving and investment cause an increase in the quantity of capital per worker D) all of the above
D
Neoclassical growth theory proposes that A) real GDP growth is caused by growth in the population B) discoveries result from choices that increase profits C) technological progress increases the population growth rate and drives down real wages D) real GDP per person grows because technological change increases profit opportunities
D
Suppose real GDP for a country is $13 trillion in 2015, $14 trillion in 2016, $15 trillion in 2017, and $16 trillion in 2018. Over this time period, the real GDP growth rate is A) constant. B) negative. C) increasing. D) decreasing.
D
The Industrial Revolution in England in large was the result of A) growth in human capital B) population growth C) technological innovations that were financed mainly by government spending D) technological innovations encouraged by the patent system
D
The real wage rate will fall if the A) labor demand curve shifts rightward and the labor supply curve does not shift.B) labor supply curve shifts leftward and the labor demand curve does not shift.C) labor demand curve shifts rightward more than the labor supply curve shifts rightward. D) labor supply curve shifts rightward and the labor demand curve does not shift.
D
Which of the following is NOT an important factor affecting growth in labor productivity? A) the growth rate of physical capital B) the saving rate C) the growth rate of labor productivity D) the speed with which prices fall
D
Which of the following is NOT associated with the new growth theory? A) innovation B) research C) technology D) natural resources
D
Standard of Living Growth Rate =
percent change in annual real GDP per person or per capita
Real GDP per person growth rate =
real GDP growth rate-population growth rate
Rule of 70 is
years to double=(70)/(growth rate)
Labor Productivity =
(Real GDP)/(hours of labor)
A worker's stock of knowledge is known as A) human capital B) monetary capital C) financial capital D) physical capital
A
All of the following contribute to labor productivity growth EXCEPT __________ A) population growth B) technological advancements C) human capital growth D) physical capital growth
A
An increase in saving that leads to more capital accumulation ____________ labor productivity. A) increases B) decreases C) does not change D) probably changes but in an ambiguous direction
A
Classical growth theory states that A) growth is followed by increases in the population, eventually leaving real GDP per person unchanged B) growth is maximized when everyone is fully employed C) growth in real GDP per person is difficult in the beginning but easier in the later stages D) advances in technology will always insure a permanent increase in real GDP per person
A
If capital per worker rises A) labor productivity increases, B) labor productivity decreases C) no technological progress occurs D) firms respond by raising their prices
A
If the quantity of capital per worker in the economy increases A) labor productivity increases B) the stock of human capital necessarily increases C) the stock of financial assets held by the public increases D) the amount of money held by workers increases
A
Suppose a nation's population grows by 2 percent and, at the same time, its GDP grows by 5 percent. Approximately how fast will real GDP per person increase? A) 3 percent per year B) 10 percent per year C) 5 percent per year D) 2 percent per year
A
Using the Rule of 70, if the country of Huttodom's current growth rate of real GDP per person was 10 percent a year, how long would it take the country's real GDP per person to double? A) 7 years B) 20 years C) 10 years D) 0.7 years
A
When labor productivity increases, the demand for labor curve ________ and the supply of labor curve ________. A) shifts rightward; does not shift B) shift s leftward; does not shiftC) shifts rightward; shifts rightward D) shifts leftward; shifts rightward
A
