Ch. 9 HW - Lori

Scenario: The Aggregate Production Function Holding the human capital per worker and technology unchanged, the estimated aggregate production function in Jamaica is Y / L = 50 × K / L, where Y = real output, L = number of workers, and K = quantity of physical capital. Reference: Ref 9-7 (Scenario: The Aggregate Production Function) Look at the scenario The Aggregate Production Function. If real GDP per worker equals $3,200, physical capital per worker equals:

$64

South Korea has real GDP per capita of $25,000, while England has real GDP per capita of $50,000. If real GDP per capita in South Korea grows at 7% and England's real GDP per capita grows at 3.5%, how long will it take for real GDP per capita in the two nations to converge?

20 years

There are two countries on a peninsula. The first has a per capita annual growth rate of 2%, and its neighbor to the south has an annual growth rate of 5%. How much sooner will the country in the south double its GDP per capita than its neighbor in the north?

21 years

If output is growing at 5% annually, how many years will it take for output to quadruple?

28

Sweden has real GDP per capita of $50,000, while Chile has real GDP per capita of $25,000. If real GDP per capita in Sweden grows at 2% and Chile's real GDP per capita grows at 4%, how long will it take for real GDP per capita in the two nations to converge?

35 years

(Figure: Technological Progress and Productivity Growth) Look at the figure Technological Progress and Productivity Growth. Which of the following changes in real GDP is most likely to have resulted from an increase in the quality (as well as quantity) of public health measures?

B to C

(Figure: Technological Progress and Productivity Growth) Look at the figure Technological Progress and Productivity Growth. If there is significant technological progress (all other factors remaining unchanged), it is best indicated by a move from:

B to C.

Economists use real GDP per capita to measure economic growth:

because it is the inflation-adjusted value of a country's production of goods and services corrected for the change in a country's population.

Which of the following is a government policy to promote economic growth?

building infrastructure and providing public goods

An example of a public good that encourages economic growth is public health services, such as vaccinations.

True

The _____in an economy whose aggregate real output is growing faster than the total population.

real GDP per capita is rising

(Figure: Nations A and B) Look at the figure Nations A and B. Suppose that in 1960 each nation had $100 of physical capital for each worker and in 2010 each nation had $400 of physical capital per worker. Clearly in both 1960 and in 2010 nation A was producing more real output per capita with the same amount of physical capital per worker. What could explain the difference in these aggregate production functions?

(WEIRD SHORT ANSWER QUESTION) Here is my made up answer: [Perhaps nation A invested in its human capital, so it would have greater production than nation B. Education is paramount for a successful economy. ?????]

(Table: South Korea's Real GDP per Capita) Look at the table South Korea's Real GDP per Capita. As a percentage of real GDP per capita in 2000, approximately how much did South Korea produce in 1960?

(WRONG) 1,011%

Scenario: Growth Rates Suppose that real GDP per capita of the United States is $32,000 and its growth rate is 2% per year. Real GDP per capita of China is $4,000, and its annual growth rate is 7%. (Scenario: Growth Rates) Look at the scenario Growth Rates. How many years will it take for China's real GDP per capita to be larger than real GDP per capita in the United States?

(WRONG) 15 to 20 years

(Figure: Technological Progress and Productivity Growth) Look at the figure Technological Progress and Productivity Growth. Which of the following changes in real GDP is most likely to have resulted from the deterioration of the nation's infrastructure over time?

(WRONG) C to B

Convergence is most likely between:

(WRONG) Mexico and Ghana or Brazil and the United Kingdom.

According to the rule of 70, if real GDP per capita is growing at 2% a year, in 100 years it will have increased by:

(WRONG) about 4 times.

In the long run, an increase in saving will generally:

(WRONG) reduce the rate of economic growth.

An increase in capital stock would:

(WRONG) shift the production function upward.

(Table: South Korea's Real GDP per Capita) Look at the table South Korea's Real GDP per Capita. As a percentage of real GDP per capita in 1960, approximately how much did South Korea produce in 2000?

1,011%

According to the rule of 70, if a country has an average growth rate of 7%, its real GDP per capita will double in:

10 years.

According to the rule of 70, if a country's real GDP per capita grows at an annual rate of 2% instead of 3%, it will take _____ additional years for that country to double its level of real GDP per capita.

11.67

From 2010 to 2011 nation A's real GDP increased from $100 billion to $106 billion and its population grew from 50 million to 51 million. Its annual growth rate in real GDP per capita was approximately:

4

Scenario: The Aggregate Production Function Holding the human capital per worker and technology unchanged, the estimated aggregate production function in Jamaica is Y / L = 50 × K / L, where Y = real output, L = number of workers, and K = quantity of physical capital. (Scenario: The Aggregate Production Function) Look at the scenario The Aggregate Production Function. If K / L = $81, then real GDP per worker is:

4050

If real GDP grows at an annual rate of 1%, it will double in approximately _____ years.

70

If real GDP in country A is $500 billion one year and is $540 billion the following year, this means the growth rate for this country between the two years is:

8%

(Figure: Productivity) Look at the figure Productivity. An increase in physical capital per worker with everything else remaining unchanged is shown on the diagram as a movement from:

A to B.

(Figure: Technological Progress and Productivity Growth) Look at the figure Technological Progress and Productivity Growth. If there is an increase in physical capital per worker (all other factors remaining unchanged), it is best indicated by a move from:

A to B.

An example of physical capital is:

Trucks bought for a company

According to the rule of 70, a 10% annual increase in real GDP would lead to a doubling of real GDP in seven years.

True

Rising high school graduation rates are an example of an increase in:

human capital.

Because of diminishing returns to capital, doubling the amount of physical capital available for one worker to use will _____ output by _____ a factor of two.

increase; less than

Which of the following contributes to economic development?

investment in infrastructure

An increase in the amount of physical capital per worker _____, while technological progress _____.

moves the economy along the aggregate production function; shifts up the aggregate production function

Technological change:

raises total factor productivity.