econ review 7

The World Bank defines extreme poverty as a person living on less than:

$1.25 per day.

For which growth rate would the Rule of 70 be least accurate?

30%

Which of the following statements is FALSE?

Economic growth always leads to a more equitable distribution of income.

The classical form of the production fonction states that:

Output = f(L, K)

Whispering Valley Furniture employs five workers working eight hours each to pro.duce 80 rocking chairs. Rocky Gap Furniture employs IO workers working eight hours each to produce I 00 rocking chairs. Which company's workers are more productive?

Whispering Valley Furniture's workers are more productive.

Which of the following items is NOT an example of investment in human capital?

acquisition of obsolete skills

Protection of property rights is:

an intangible resource that is part of the infrastructure

Which ofthc following institutions is NOT an example of our nation's infrastructure?

buildings of General Electric

According to the classical model, which of the following developments does NOT contribute to economic growth?

higher interest rate

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

Which of the following changes will NOT result in economic growth according to the production function?

increases in consumption spending

Which of the following occurrences is NOT a source of productivity growth?

increasing the level of consumption spending

Unanticipated __ is detrimental to economic growth.

inflation or deflation

According to Schumpeter, the most important activity that drives business cycles is:

innovation

Schumpeter's term creative destruction describes the:

innovative dynamism of capitalism.

Which statement about long-term economic growth is TRUE?

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

Developed nations tend to have:

limited labor supplies but lots of 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.

The single largest consumer of goods and services in the United States is:

the government

Creative destruction occurs when:

the periodic emergence of innovation boosts the economy.

Whispering Valley Furniture employs five workers working eight hours each to prod,cloe 80 rocking chairs. Rocky Gap Furniture employs IO workers working eight hours each to produce 160 rocking chairs. Which company's workers are more productive?

the two companies workers are equally productive

According to Joseph Schumpeter, what is the driving force behind business cycles?

waves of innovations