Macroeconomics Chapter 8

When _________ over many years, an apparently minor difference in the rate of growth becomes highly significant.

compounded

suppose the annual growth rate of GDP in the United States is 4% the GDP in the United States will double in

17.5 years

Real GDP per capita

The best economic growth measurement to compare living standards is:

The purchase of the economy's expanding goods and services by household, businesses, and the government is known as the _____ factor

demand

the purchase of the economy's expanding goods and services by households businesses and government is known as the_________ factor

demand

the two types of investment in human capital are on-the-job training and formal _____

education

one measure of a nation's quality of Labor is

educational attainment

One measure of a nation's quality of labor is:

educational attainment.

Economic growth allows a society to consume

higher quality goods, a wider variety of goods, more goods and services

public investment in US infrastructure like roads and bridges promotes___________ investment in new factories and retail stores

private

how can follow our countries catch up to leader countries

they can utilize technologies that have already been created

the two supply-side elements of real GDP are:

1. increases in hours of work 2. increases in labor productivity

Economic growth

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

When an economy uses its resources to maximize people's well-being by producing a specific mix of goods and services, it is called _____ efficiency.

Allocative

The ratio of capital to labor

An important source of increasing labor productivity is an increase in:

Public investment in US infrastructures like roads and bridges promotes ____ investment in new factories and retail stores.

Private

Real GDP = Hours of work x Labor productivity

Real GDP = ___________ x ___________

Three fold

Real per capita GDP has risen over ___________ since 1950.

The six "determinants" of economic growth are grouped into three categories: one demand factor, four ____ factors and one efficiency factor.

Supply

- Productive - Allocative

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

the number of years for a variable to double equals 70 divided by its annual growth rate

The rule of 70 states that:

- how long it will take savings accounts to double at various interest rates - how long it will take the price level to double at various percentage rates of inflation

Two ways the rule of 70 may be applicable is estimating:

- Pollution - Global warming - Environmental problems

What are three negative externalities resulting in rapid economic growth?

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

a competitive market system

economic growth allows a society to consume

a wider variety of goods higher quality Goods more goods and services

When an economy uses its resources to maximize people's well-being by producing a specific mix of goods and services, it is called ______ efficiency.

allocative

Economic growth lessens the burden of scarcity by: allowing more current consumption while keeping the future capacity the same. allowing more current consumption while also increasing the capacity to produce more in the future. allowing the same consumption in the present as in the future.

allowing more current consumption while also increasing the capacity to produce more in the future.

the growth-promoting institutional structure that involves prices and profits serving as signals to guide production is called:

competitive market system

households, businesses, and government must _____ their purchases of goods and services in order to provide a market for all the new output that can be potentially be produced

expand

The growth-promoting institutional structure that involves banks and the stock and bond markets are called efficient _________ institutions.

financial

the growth promoting institutional structure that involve banks and the stock and bond markets are called efficient _____ institutions

financial

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

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

free, competitive

what are some possible reasons for the slowdown in productivity growth rate starting in 2010

high debt levels that have accumulated recent products like internet apps have a very small effect on GDP increase productive capacity exceeded consumer demand

Examples of infrastructure

highways and bridges, public transit systems, wastewater treatment facilities, water systems, airports, educational facilities

a nation's real GDP depends on labor __________X _______labor

hours and productivity

A nation's real GDP depends on labor_____ multiplied by labor _____

hours, productivity

a nations economic growth from one year to the next depends on its:

increase in labor inputs and increase in labor productivity

liberalized international trade

increase labor productivity, expanded real output, and an improvement of allocation of resources are effects of what

identify the statements which exemplify how the supply, demand and efficiency factors are related

low spending on investment may cause insufficient spending and unemployment, inefficiency int he use of resources may translate into higher costs of goods and services and lower profits which may cause innovation, unemployment caused by insufficient total sending may lower the rate of new capital accumulation and delay expenditures on research

sources of increasing returns

more specialized inputs, spreading of development, simultaneous consumption, network effects, learning by doing

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

more women and minorities and higher productivity

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

more women and minorities in higher-productivity jobs.

Software and internet services become more beneficial to a buyer the greater the number of households and business that also buy them. This called: simultaneous consumption. networks effects. learning by doing. increasing returns.

networks effects.

technological advancement

new forms of business organization, new managerial methods, and innovative production techniques represent what

continual economic growth and increases in living standards are driven by:

new innovation and new technologies

Continual economic growth and increases in living standards are driven by?

new technologies new innovation

Continual economic growth and increases in living standards are driven by

new technologies, new innovation

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

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

productive; allocative

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

property

private

public investment in US infrastructure like roads and bridges promotes ____ investment in new factories and retail stores

real GDP divided by the size of the population is called

real GDP per capita

When firms divide high product development costs over greater output they are:

spreading development costs.

17.5 years

suppose the annual growth rate of GDP in the US is 4%. The GDP in the US will double in

productive, allocative

the competitive market system tends to drive the economy toward ____efficiency and ____ efficiency

The rule of 70 states that

the number of years for a variable to double equals 70 divided by its annual growth rate

Bestowing onto inventors and innovators a high level of prestige and respect in society will encourage:

wealth creation

workers today are more productive than workers in the past because

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

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

working-age

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

working-age

Real economic growth can be misleading when:

Annual population growth exceeds that of real GDP

A percentage rate of growth per quarter or per year

Economic growth is calculated as:

More current consumption while also increasing the capacity to produce more in the future

Economic growth lessens the burden of scarcity by allowing:

One measure of a nation's quality of labor is:

Educational attainment

True or false: Countries that experienced growth more recently will never be able to escape poverty.

False

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 bank markets are called:

Financial institutions

- Increases in the quantity and quality of natural resources - Increases in the supply of capital goods - Improvements in technology - Increases in the quantity and quality of human resources

What supply factors are "determinants" of economic growth?

Compounded

When ___________ over many years, an apparently minor difference in the rate of growth becomes highly significant.

compounded

When ___________ over many years, an apparently minor difference in the rate of growth becomes highly significant.

Productive

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

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 are used by economists to define and measure economic growth?

Which of the following growth-promoting institutional structures create a highly educated work-force?

Widespread education

start up

a new firm focused on creating and introducing a particular product or employing a new production or distribution method is called a ___ firm

frantic Paces on jobs worker burnout and alienated employees are all effects of

economic growth

anxieties, insecurities

economic growth and changing technology may create _____ and ____ for workers

the factors of production

economic growth is made possible due to ____ that shift the production possibilities curve outward

year

economic growth is normally calculated as a percentage rate of growth per quarter or per ____

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 of scale

two examples where the rule of 70 applies:

estimating how long it will take the price level (inflation) or savings account (interest) to double at various percentage rates of inflation or interest

if the capital stock remains _____ while labor ______, labor productivity will probably ______

fixed; decreases; increase

The argument that economic growth leads to higher standards of living is an argument _________ economic growth while the argument that economic growth results in environmental problems and doesn't solve sociological problems is an argument _________ economic growth.

for; against

Economic growth is made possible by the:

four supply factors that the production possibilities curve outwar

Strong property rights, ___________ trade, patent 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 potential.

full employment

The method used to identify the contribution to economic growth from increased capital, labor, and technological progress is known as:

growth accounting

To achieve higher production potential created by supply factors:

households, businesses and government must purchase the economy's expanding output of goods and services

saving

ideally, a nation acquires funds for investment spending on plant and equipment by ____ income

statements that describe the effect of liberalized international trade

improve allocation of resources expanded real output increased labor productivity

over time when workers move from low productivity to high productivity employment it is called

improved resource allocation

A situation in which a given percentage increase in the amount of inputs a firm uses leads to a even larger percentage increase in the amount of output the firm produces is called _____ returns

increasing

if a firm doubles the size of its plant, equipment and labor force and finds that its total output has tripled, they have experienced _____ returns

increasing

Generally, technological advance is generated by the discovery of new _____, which allows _____ to be combined in improved ways to increase output.

knowledge; resources

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

labor productivity

Workers moving over time from low-productivity to high-productivity employment refers to which of the factors of productivity growth?

Improved resource allocation

If the amount of capital per worker ____, labor productivity will increase.

Increases

Increases in capital are important to productivity growth because:

Increases in the quantity and quality of capital make workers more productive

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 _____ returns

Increasing

If a firm doubles the size of its plant, equipment and labor force and finds that its total output has tripled, they have experienced ____ returns.

Increasing

when society increases its input of resources and raises the productivity of those resources it can increase real _____ and _____

output; income (wages)

Economic growth made possible by the four supply factors is illustrated by the: inward shifting of the production possibilities curve. movement upward along the production possibilities curve. movement downward along the production possibilities curve. outward shifting of the production possibilities curve.

outward shifting of the production possibilities curve.

the growth-promoting institutional structure that involves giving inventors and authors the exclusive rights to market and sell their creations are called _____ and _____.

patents; copyrights

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

private

public investment in U.S. infrastructure like roads and bridges promotes _____ investment in new factories and retail stores

private

households businesses and government must_________ the economy is expanding output of goods and services in order to achieve higher production potential created by Supply factors

purchase

economic growth will _____ the burden of scarcity

reduce

economic growth will __________the burden of scarcity

reduce

growth accounting

refers to the method used to identify the contribution of economic growth from increased capital, labor, and technological progess

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

rising incomes, rising real wages, higher standards of living

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

rising wages and incomes and higher standards of living

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

ideally, a nation acquires funds for investment spending on plant and equipment by _____ income

saving

a new firm focused on creating and introducing a particular new product or employing a new production or distribution method is called a _____ firm

start-up

Apple and Dell are examples of __________ firms.

start-up innovative

the rule of 70 states that

the number of years for a variable 2 mm equals 70 divided by its annual growth rate

In the anti-growth view, economic growth has not solved sociological problems such as poverty, homelessness, and discrimination because:

we need to redistribute wealth and income

in the anti-growth view economic growth has not saw sociological problems such as poverty and homelessness and discrimination because

we need to redistribute wealth and income

Which of the following reduces the burden of scarcity?

Economic growth

if country A has a total input of labor hours of 20,000 hours and the productivity is $20, then real GDP in country A is:

$400,000

If the real GDP is $15 trillion and the population is 300 million, then real GDP per capita is:

$50,000

If the real GDP in the United States was 11,319.4 billion in a year and 11,566.8 billion in year 2, then the rate of economic growth in year 2 was:

2.2%

When many products and services can satisfy large numbers of consumers at the same time it is called simultaneous ____.

Consumption

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

Reductions in per-unit production costs that result from increases in output levels lead to ____ of ____.

Economies Scale

If the capital stock remains ____ while labor ____, labor productivity will probably ____ because of diminishing returns.

Fixed Decreases Increase

Economic growth

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

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

What are the three reasons real GDP per capita does not fully account for the growth of an economy?

It does not account for added leisure time. It does not account for improved products and services. It does not measure the effects on the environment.

labor productivity

Output per hour of work is:

The growth-promoting institutional structure that involves giving inventors and authors the exclusive right to market and sell their creations is:

Patents and copyrights

Demand

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

Economic growth

What reduces the burden of scarcity?

industrial

a no-growth policy among ___ nations would limit the growth in poor countries because of reduced foreign direct investment and development

true or false countries that experienced economic growth early then experienced declines have lower average incomes today

false

which of the following comprise technological advancement?

innovative production techniques, new managerial methods and new forms of business organization that improve the process of production

human capital refers to:

investment in education and training

According to McConell, economic growth has made working conditions:

less hazardous and more pleasant

the core element of the productivity speedup is an explosion of entrepreneurship and innovation based on:

microprocessor (microchip)

Real GDP divided by the size of the population is called

real GDP per capita

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

Property

The five factors that together appear to explain changes in productivity growth rate are technological advance, quantity of ____, education and training, economies of scale and improved ____ allocation.

Capital Resource

productive

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

Allocative

When an economy uses its resources to maximize people's well-being by producing a specific mix of goods and services, it is called ___________ efficiency.

Unplanned increases in inventory

When households, businesses, and the government purchase the economy's expanding output, resources remain fully employed and there are no:

- Output - Income/wages

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

An increase in the ratio of capital to labor

An important source of increasing labor productivity is:

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.

the method used to identify the contribution to economic growth from increased capital, labor, and technological progress is known as:

growth accounting

determinants that directly affect the rate of economic growth

total spending on goods and services economic efficiency and full employment increases and the quantity and quality of natural and Human Resources increases in the supply of capital goods improvements in technology

true or false the competitive market system tends to drive the economy towards productive and allocative efficiency

true

the best economic growth measurement to compare living standards is:

real GDP per capita

which of the following statements best summarizes the real economic growth per capita in the United States between 1950 and 2015 A) real GDP rose more than tenfold B) real GDP remains constant C) real GDP per capita Rose more than threefold D) real GDP per capita doubled.

real GDP per capita Rose more than three fold

Generally, technological advance is generated by the discovery of new ____ which allows ____ to be combined in improved ways that increase output.

Knowledge Resources

Generally, technological advance is generated by the discovery of new _____ which allows ____ to be combined in improved ways that increase output.

Knowledge; resources

pollution global warming and ozone depletion are _________externalities that result from economic growth.

adverse or negative

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

industrialization

global warming,pollution, and ozone depletion are the negative externalities that result from ___ and growth

True or false: Countries that experienced economic growth early, then experienced declines, have lower average incomes today

False

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

productive

Select form the following those that contributed to the spectacular advancement in information technology. electricity the computer fiber- optic cable wireless technology the internet

the computer fiber- optic cable wireless technology the internet

in any year, a nation's rel GDP depends on hours of work multiplied by:

labor productivity

Labor productivity is

real output per hour of work

Labor productivity is:

real output per hour of work

labor productivity is

real output per hour of work

labor productivity is:

real output per hour of work

Six fold

Real GDP has increased over ___________ since 1950.

- Higher quality of goods - A wider variety of goods - More goods and services

Economic growth allows a society to consume:

Which of the following are used by economists to define and measure economic growth?

1. an increase in real GDP occurring over some period of time 2.an increase in real GDP per capita occurring over some period of time

two reasons for the reawakening of capitalism throughout the world.

1. collapse of socialist economies 2. success of the free market system

Increases in capital are important to productivity growth because _____ in the quantity and quality of capital make workers _____ productive

1. decreases; less 2. increases; more

Under the rule of 70, if the GDP per capita growth rate in the United States is 2.3%, standards of living double every:

30.43 years

Under the rule of 70, the real GDP per capita growth rate in the United States in 2.3%, standards of living double every:

30.43 years

Using the rule of 70, how many years would it take for person's income to double if he or she was to experience a 2% increase in income each year?

35

it country a has a total and put of labor hours of 20000 hours and the productivity is $20 an hour then the real GDP and Country a

400000

Which of the following are growth-promoting institutional structures?

Competitive market system. Strong property rights. Efficient financial institutions. Patents and copyrights. Free trade.

When ____ over many years, an apparently minor difference in the rate of growth becomes highly significant.

Compounded

Factors of production

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

Outward shifting of the production possibilities curve

Economic growth made possible by the four supply factors is illustrated by the:

Reductions in per-unit production costs that result from increases in output levels lead to _____ of _____.

Economies of scale

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

Economists define and measure economic growth as:

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

Education

Full employment

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

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

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

Full employment

The method used to identify the contribution to economic growth from increased capital, labor, and technological progress is known as:

Growth accounting

- It increased a society's ability to resolve socioeconomic problems - It increases real wages and incomes - It increases standards of living

Growth is an important economic goal because:

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

Higher standards of living. Rising real wages. Rising incomes.

Purchase

Households, businesses, and government must ___________ the economy's expanding output of goods and services in order to achieve higher production potential created by supply factors.

- Inefficiency in the use of resources may translate into higher costs of goods and services and lower profits which may slow innovation - Low spending on investment may cause insufficient spending and unemployment - Unemployment caused by insufficient total spending may lower the rate of new capital accumulation and delay expenditures on research

How are the supply, demand and efficiency factors are related:

- Global warming - Pollution - Ozone depletion

Identify the negative externalities that result from industrialization:

$400,000

If country A has a total input of labor hours of 20,000 hours and the productivity is $20, then real GDP in country A is:

Over time, when workers move from low-productivity to high-productivity employment, it is called:

Improved resource allocation

Workers moving over time from low-productivity to high-productivity employment refers to which of the factors of productivity growth?

Improved resource allocation.

Select all of the following that will cause productivity to rise.

Improvements in: Health, Training, Education, Motivation More and better machinery and natural resources Better organized and managed More-efficient industries

We need to redistribute wealth and income

In the anti-growth view, economic growth has not solved sociological problems such as poverty, homelessness, and discrimination becasue:

If the amount of capital per worker _____, labor productivity will increase.

Increases

The two supply-side elements of real GDP are:

Increases in hours worked. Increases in labor productivity.

Identify the supply factors that are "determinants" of economic growth.

Increases in the quantity and quality of natural resources. Increases in the quantity and quality of human resources. Increases in the supply of capital goods. Improvements in technology.

Which of the following are reasons why the average worker in the United States today produces more than his or her counterpart a century ago?

Modern workers have more physical capital available to use at work. Modern workers are better educated. Modern workers have better technology at work.

Continual economic growth and increases in living standards are driven by:

New innovation New technologies

Which of the following comprise technological advancement?

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

limits growth in poor nations

One of the consequences of a no-growth policy

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

Output Wages

Labor productivity

Output per hour of work is the definition of:

The growth-promoting institutional structure that involves giving inventors and authors the exclusive rights to market and sell their creations are called ____ and ____.

Patents Copyrights

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

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

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

- Better machinery - Well organized and managed production - Labor is reallocated from less-efficient industries to more-efficient industries - Improvement in health, education and training - Improvement in motivation

Productivity rises due to:

Households, businesses, and government must ____ the economy's expanding output of goods and services in order to achieve higher production potential created by supply factors.

Purchase

real gdp per capita

Real GDP divided by the size of the population is called:

Per person

Real GDP per capita is the amount of real output ___________ ___________ in a country.

Annual population growth exceeds that of real GDP

Real economic growth can be misleading when:

annual population growth exceeds that of real GDP

Real economic growth can be misleading when:

Select examples of infrastructure.

Roads and bridges Water supply system

The number of years for a variable to double equals 70 divided by its annual growth rate is called the:

Rule of 70

Ideally, a nation acquires funds for investment spending on plant and equipment by _____ income.

Saving

Ideally, a nation acquires funds for investments spending on plant and equipment by ____ income.

Saving

One way that the government can encourage long term economic growth is by encouraging:

Savings and investment

A new firm focused on creating and introducing a particular new product or employing a new production or distribution method is called a ____ firm.

Start-up

the six determinants of economic growth are grouped into three categories one demand factor four_________ factors one efficiency Factor

Supply

17.5 years (# of years required to double = 70 / 4%)

Suppose the annual growth rate of GDP in the US is 4%. The GDP in the US will double in:

_____ advancement and investment are related because they promote further economic investment in new machinery and equipment.

Technological

Select the five factors that together appear to explain changes in productivity growth rate.

Technological advance Quantity of capital Education and training Economies of scale Resource allocation

- Rising - Higher

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

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

The factors of production

Working-age

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

The core element of the productivity speedup is an explosion of entrepreneurship and innovation based on:

The microchip

rule of 70

The number of years for a variable to double equals 70 divided by its annual growth rate is called the:

Supply

The six "determinants" of economic growth are grouped into three categories: one demand factor, four ___________ factors and one efficiency factor.

by raising the productivity of those inputs

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

- An increase in real GDP occurring over some time period - An increase in real GDP per capita occurring over some time period

What is used by economists to define and measure economic growth?

A no-growth policy amount industrial nations

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

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

Year

When an economy uses its resources to maximize people's well-being by producing a specific mix of goods and services, it is called:

allocative efficiency

when an economy uses its resources to maximize people's well-being by producing a specific mix of goods and services it is called

allocative efficiency

Economist 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

Suppose the country of Ziam has a net increase in the size of its labor force and the workers all find jobs in their field of expertise, In addition, new technology, better education and improved health conditions have increased each worker's productivity. These changes will result in: an increase in the real GDP potential and their production possibility curve will shift to the left. an increase in the real GDP potential and their production possibility curve will shift to the right. an decrease in the real GDP potential and their production possibility curve will shift to the right. an increase in the real GDP potential and their production possibility curve will shift to the left.

an increase in the real GDP potential and their production possibility curve will shift to the right.

Real economic growth can be misleading when: annual population growth exceeds that of nominal GDP. annual population growth exceeds that of real GDP. annual population growth less that of real GDP.

annual population growth exceeds that of real GDP.

statements that summarize help Burns can increase productivity using economies of scale

as firms expand their size and I'll put 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

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

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.

when ________over many years and apparently minor difference in the rate of growth becomes highly significant

compounded

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

demand factor

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

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 a elimination of archaic social norms be increased in communistic economies C increased in democracies D increase in unemployment E increased Leisure Time in arts

elimination of archaic social norms increase in democracies increased Leisure Time and arts

Two ways that the rule of 70 may be applicable are: estimating how tong it will take the price level to double at various percentage rates of inflation. estimating how tong it will take the price level to double at various interest rates. estimating how tong it will take savings accounts to double various interest rates. estimating how tong it will take savings accounts to double various inflation rates.

estimating how tong it will take the price level to double at various percentage rates of inflation. estimating how tong it will take savings accounts to double various interest rates.

the expansion of total output relative to population results in which of the following A)falling incomes B)higher standards of living C)lower standards of living D)rising incomes E)falling real wages F)reduced consumption G)Rising real wages

higher standards of living, Rising incomes, Rising real wages

over time, when workers move from low-productivity to high-productivity employment, it is called:

improved resource allocation

if a firm doubles the size of its plant equipment and labor force and finds that its total output has tripled they have experienced __________ returns

increased

If the amount of capital per worker __________, labor productivity will increase.

increases

decreases; less

increases in capital are important in productivity growth because _____ in the quantity and quality of capital make workers ____ productive

The two supply-side elements of GDP are:

increases in hours increases in labor productivity

the "determinants" that directly affect the right of economic growth

increases in quantity and quality natural resources and human resources, increases in the supply (or stock) of capital goods, improvement in technology, total spending on goods and services, economic efficiency and full employment

Increase in capital are important to productivity growth because:

increases in the quantity and quality of capital make workers more productive

identify the supply factors that are "determinants" of economic growth

increases in the supply of capital goods, increases in the quantity and quality of human resources and natural resources, improvements in technology

If a firm doubles the size of its plant, equipment and labor force and finds that its total output has tripled, they have experienced _________ 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 _________returns

increasing

No

is local company replaces its clerks' typewriters with PCs an investment in human capital?

Which of the following are factors responsible for the recent productivity acceleration? increase in labor-participation rate which increase production. miniaturization of electronic circuits. innovation based on the microprocessor which bundles transistors on a piece of silicon. advancements in information technology which has been used to connect all parts of the world. widespread availability of personal and laptop computers.

miniaturization of electronic circuits. innovation based on the microprocessor which bundles transistors on a piece of silicon. advancements in information technology which has been used to connect all parts of the world. widespread availability of personal and laptop computers.

productive

more physical capital embodying better technology with which to work makes workers today more ____ than workers in the past

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

negative

how the social-cultural-political environment of the united states has encouraged economic growth

no social or moral taboos on production, economic and political freedom, stable political system, positive attitude toward work, wealth creation is accepted as a desirable goal, positive attitude toward risk taking, protective policies for foreign trade

Real GDP per capita means GDP:

per person

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 following are arguments against rapid economic growth

rapid economic growth results and pollution global warming and other environmental problems rapid economic growth has not solved sociological problems like poverty and homelessness rapid economic growth is unsustainable due to the Earth's finite resources

the best economic growth measurement to compare living standard is

real GDP per capita

identify the sources of increasing returns for firms

spreading of development cost Network a fax learning-by-doing simultaneous consumption more specialized inputs

the growth promoting institutional structure that involves the ability of citizens to own land, houses and businesses is:

strong property rights

which of the following are growth-promoting institutional structures?

strong property rights, patents and copyrights, efficient financial institutions, literacy and widespread education, free trade, competitive market system

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

stronger productivity growth and heightened global competition

what allows the economy to achieve a higher rate of economic growth

stronger productivity growth in heightened Global competition

The six "determinants" of economic growth are grouped into three categories: one demand factor, four ______ factors and one efficiency factor

supply

_____ advancement and investment are related because they promote further economic investment in new machinery and equipment

technological

Conveyor belts, personal computers, wireless communication and containerized shipping are all examples of:

technological advance.

the five factors that together appear to explain changes in productivity growth rate

technological advances, the amount of capital each worker has to work with, education and training, economic of scale, and resource allocation

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 shifts the production possibilities curve outward

the factors of production

economic growth is made possible due to _________that shift the production possibilities curve outward

the factors of production

capital per worker

the increase in ___ ___ ___ helps explain why the growth rate in the US has been positive during the 1900s

some Economist believe that the high productivity growth rates between 1995 and 2010 were a one-time anomaly caused by

the information technology Revolution

all of the following are reasons why the average worker in the united states today produces more than his or her counterpart a century ago EXCEPT:

the modern worker works longer hours

the rule 70 states that:

the number of years for a variable to double equals 70 divided by its annual growth rate

The rule of 70 states that:

the number of years for a variable to double equals 70 divided by its annual growth rate.

supply

the six determinants of economic growth are grouped into three categories: one demand factor, four ____ factors, and one efficiency factor

what has led to the reawakening of capitalism throughout the world

the success of the market systems the collapse of socialist economies

technological advance

which of the five factors of productivity growth helps promote the development of new forms of business organization

american;s positive attitude toward _____ and risk taking results in a supply of willing workers and innovative entrepreneurs

work

economic growth is normally calculated as a percentage rate of growth per quarter of per _____

year

Identify the two reasons for the reawakening of capitalism through the world. Collapse of socialist economies. Success of the market system. Strength of the U.S. dollar. Internet buying and selling.

Collapse of socialist economies. Success of the market system.

Which of the following reduces the burden of scarcity? Economic growth Population growth Lower rates of inflation Labor force growth

Economic growth

Which of the following cannot properly be called a part of infrastructure? Roads and bridges Human capital Sea ports Power lines

Human capital

Other than a higher standard of living and more innovations, what other aspects of a nation have been effected by modern economic growth?

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

Which of the following are sources of increasing returns? More specialized inputs such as specialized workers and inventory management systems. Simultaneous consumption which allows large numbers of costumers to be served at the same time. Spreading of development costs over greater output. Learning by doing which reduces the time to perform tasks. Network effects which increase the value of the product to each user as the total number of users rises. Increasing prices at the same time as decreasing costs through improved efficiency.

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

_____________ advancement and investment are related because they promote further economic investment in new machinery and equipment.

Technological

True or false: Prospects for a lasting increase in productivity are good for the future.

True

When an economy uses its resources to maximize people's well-being by producing a specific mix of goods and services, it is called __________ efficiency.

allocative

Which of the following are used by economist to define and measure economic growth? an increase in real GDP per capita occurring over some time period. an increase in nominal GDP occurring over some time period. an increase in nominal GDP per capita occurring over some time period. an increase in real GDP occurring over some time period.

an increase in real GDP per capita occurring over some time period. an increase in real GDP occurring over some time period.

An important source of increasing labor productivity is:

an increase in the ratio of capital to labor.

Reduction in per-unit production costs that result from increases in output levels lead to __________ of __________.

economies; scale

The two types of investment in human capital are on-the-job training and formal ___________ (one word)

education

Identify the negative externalities that result from industrialization and growth. global warming pollution higher standard of living inflation ozone depletion

global warming pollution ozone depletion

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

Growth is an important economic goal because:

it increases real wages and incomes it increases a society's ability to resolve socioeconomic problems. it increases standards of living.

Generally, technological advance is generated by the discovery of new ___________ which allows ____________ to be combined in improved ways that increase output.

knowledge; resources

Output per hour of work is the definition of.

labor productivity

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

The ability of software programs, songs on CDs, and movies on DVDs to satisfy large numbers of costumers at the same time is an example of:

simultaneous consumption

When a firm purchases a customized inventory management system they are:

specializing their inputs

Human capital refers to:

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

Americans' positive attitude toward ________ and risk taking results in a supply of willing workers and innovation entrepreneurs.

work

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

year

Which of the following is a public investment in infrastructure? The government makes it easier for students to obtain loans for college and now more students can attend school. A local corporation has two buildings separated by a mile. The company lays a fiber-optic cable between the buildings. A city builds a new water plant. Residents of a seniors complex hire a private security force because of fear of crime.

A city builds a new water plant.

Which of the following would limit the growth in poor countries because of reduced foreign direct investment and development? A no-growth domestic policy in poor countries An accommodating-growth policy among poor countries A no-growth policy among industrial nations A neutral-growth policy among industrial countries

A no-growth policy among industrial nations

Select the statements that summarize how firms can increase productivity using economics of scale. As firms expand their size and output they are better able to recoup investment in new production methods and products. As firms expand their size and output, they cab use more productive equipment. As firms expand their size and output they can shift increases in cost to the price of the product. As firms expand their size and output they can employ more productive methods of delivery.

As firms expand their size and output they are better able to recoup investment in new production methods and products. As firms expand their size and output, they cab use more productive equipment. As firms expand their size and output they can employ more productive methods of delivery.

Select the statements that describe the effect of liberalized international trade. Increased the foreign exchange rate. Expanded real output. Increased labor productivity. Decreased outsourcing Improved allocation of resources

Expanded real output. Increased labor productivity. Improved allocation of resources

Which of the following institutional structures promote and sustain modern economic growth? Financial institutions that channel the savings generated by households towards business, entrepreneurs and inventors. A system of tariffs and import quotas promoting domestic production and positive net exports. A competitive market system where prices and profits serve as signals that tell firms what to make and how to make it. Patents and copyrights giving inventors and authors the exclusive right to market and sell their creations for a period of time . Strong property rights that give citizens the right to own investments and property. Widespread education for the workforce that will promote new technology innovations and implementation.

Financial institutions that channel the savings generated by households towards business, entrepreneurs and inventors. A competitive market system where prices and profits serve as signals that tell firms what to make and how to make it. Patents and copyrights giving inventors and authors the exclusive right to market and sell their creations for a period of time. Strong property rights that give citizens the right to own investments and property. Widespread education for the workforce that will promote new technology innovations and implementation.

Select all the following that will cause productivity. Improvement in motivation Labor is reallocated from less-efficient industries to more-efficient industries Increased subsidies to industries. Improvement in health, education and training Better machinery Well organized and managed production

Improvement in motivation Labor is reallocated from less-efficient industries to more-efficient industries Improvement in health, education and training Better machinery Well organized and managed production

Select the "determinants" that directly affect the rate of economic growth. Improvements in technology. Total spending on goods and services. Increases in the quantity of natural and human resources. Economic efficiency and full employment. Reduced spending on capital investments. Increases in the supply of capital goods.

Improvements in technology. Total spending on goods and services. Increases in the quantity of natural and human resources. Economic efficiency and full employment. Increases in the supply of capital goods.

Identify the supply factors that are "determinants" o economic growth. Increase in the purchase of goods and services. Increase in the real wage rate. Increase in the quantity and quality of natural resources. Increase in the supply of capital goods Improvements in technology Increase in the quantity and quality of human resources.

Increase in the quantity and quality of natural resources. Increase in the supply of capital goods Improvements in technology Increase in the quantity and quality of human resources.

Which of the following comprise technological advancement? An increase in the supply of natural resources New forms of business organization. New managerial methods Innovating production techniques.

New forms of business organization. New managerial methods Innovating production techniques

Select the statements that summarize how the social-cultural-political environment of the United States has encouraged economic growth. No social or moral taboos or production. Government regulation of consumer products. Stable political system. Economic and political freedom Positive attitude toward work Wealth creation is accepted as a desirable goal. Positive attitude toward risk taking. Protective policies for foreign trade.

No social or moral taboos or production. Stable political system. Economic and political freedom Positive attitude toward work Wealth creation is accepted as a desirable goal. Positive attitude toward risk taking.

Select the five factors that together appear to explain changes in productivity growth rate. Quantity of capital. Economies of scale. Comparative advantage. Resource allocation. Technological advance. Education and training.

Quantity of capital. Economies of scale. Resource allocation. Technological advance. Education and training.

Which of the following are arguments against rapid economic growth? Rapid economic growth has not solved sociological problems like poverty and homelessness. Rapid economic growth does not reduce poverty since there is a very little political support for redistribution of income. Rapid economic growth is unsustainable due to the earth's finite resources. Rapid economic growth results in pollution, global warming and other environmental problems.

Rapid economic growth has not solved sociological problems like poverty and homelessness. Rapid economic growth is unsustainable due to the earth's finite resources. Rapid economic growth results in pollution, global warming and other environmental problems.

Identify the reasons that some economists feel that the rise in the average rate of productivity growth is not permanent. The recent increase in productivity is too high to be sustained. Recent changes in productivity might not be significant enough to increase the long-run trend of productivity. Productivity increases in the past were temporary. Global competition is expected to fall in the future

Recent changes in productivity might not be significant enough to increase the long-run trend of productivity. Productivity increases in the past were temporary.

True or false : Economists pay attention to small changes in economics growth because small changes in economic growth can make a big difference in the living standard of a country.

True

True or false: Growth enables society to improve nations infrastructure

True

Identify the statements which exemplify how the supply, demand and efficiency factors are related. Unemployment caused by insufficient total spending may lower the rate of new capital accumulation and delay expenditures om research. Efficiency in the use of resources may translate into higher costs of goods and services and lower profits which may accelerate innovation. Inefficiency in the use of resources may translate into higher costs of goods and services and lower profits which may slow innovation. Low spending on investment may cause insufficient spending and unemployment.

Unemployment caused by insufficient total spending may lower the rate of new capital accumulation and delay expenditures om research. Inefficiency in the use of resources may translate into higher costs of goods and services and lower profits which may slow innovation. Low spending on investment may cause insufficient spending and unemployment.

Today's poor countries can catch up to or even pass today's rich leader countries by:

adopting existing technology from rich leader countries

Increased private investment in infrastructure would:

cause an increase in economic growth.

When many products and services can satisfy large numbers of consumers at the same time it is called simultaneous ___________.

consumption

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

economic growth

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

a nation's economic growth from one year to the next depends on its:

increase in labor inputs and increase in labor productivity

Real GDP = hours of work multiplied by _________.

labor productivity

The fraction of the working-age population that is in the labor force is called the:

labor-forced participation rate

Economic growth can be illustrated when the demand factor and the efficiency factor

move to economy from one point on one possibilities curve outward to another point on another possibilities curve.

When society increases its inputs of resources and rises the productivity of those resources it can increase real __________ and __________.

output; wages

The growth-promoting institutional structure that involves giving inventors and authors the exclusive right to market and sell their creations is:

patents and copyrights

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 _________ rights (one word).

property

One way that the government can encourage long term economic growth is by encouraging:

savings and investment

Identify the sources of increasing returns: more generalized inputs simultaneous consumption learning by doing spreading of development costs individual consumption more specialized inputs network effects

simultaneous consumption learning by doing spreading of development costs more specialized inputs network effects

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

The core element of the productivity speedup is an explosion of entrepreneurship and innovations based on __________.

the microprocessor

All of the following are reasons why the average worker in the United States today produces more than his or her counterpart a century ago EXCEPT: the modern worker is better educated the modern worker has more physical capital available to use at work the modern worker has better technology at work the modern worker works longer hours

the modern worker works longer hours

When households, businesses and the government purchase the economy's expanding output, resources remain fully employed and there is no:

unplanned increases in inventory.

Labor productivity greatly rises as the firms sells more units of a product or service and the higher level of sales greatly reduces the per-unit cost of the product because:

workers can specialize and the firm can spread product costs over greater output.