econ study guide ch 7
when main street bank buys new automatic teller machines, the quantity of _________ in the economy increases
physical capital
the classical form of the production function states that output is determined by
some function of available labor or capital
which is not an example of infrastructure
walmart stores
land and natural resources include
water and minerals that come from the earth
the world bank defines extreme poverty as a person living on less than
$1.25 per day
which of the following items is not an example of investment in human capital
acquisituion of obsolete skills
increases in ___________ often lead to economic growth
capital
joseph's schumpeter's idea that waves of innovations lead to business cycles is called
creative destruction
when the government funds head start, it is acting in its role to promote economic growth by
enhancing physical and human capital
unanticipated ___________ is detrimental to economic growth
inflation or deflation
the rule of 70 states that the number of years required for a value to double in size is
70 divided by the growth rate
if the bureau of economic analysis reports that the annualized US growth rate was 2.5% for the second quarter, then the actual growth rate from the first quarter to the second quarter was
0.625%
rocky gap furniture employs 10 workers working 8 hours each to produce 100 rocking chairs. what is the productivity of these workers
1.25 chairs per hour
one reasonably objective measure for infrastructure is the index of economic freedom, which incorporates information about freedoms in _________ categories
10
if an economy's gdp will double in 25 years, then its growth rate must be about
2.8%
if the growth rate in an economy is 3.5% then its gdp will double in about
20 years
the percentage of the worlds population that is poor, defined by the $2 per day threshold is about
30%
if the growth rate in an economy is 2%, its gdp will double in about
35 years
if an economy's gdp will double in 15 years, then its growth rate mmust be about
4.7%
which of the following is a source of increases in productivity
all of the answers are correct
in his essay on population, malthus argued that any improvement in the standard of living would lead to
an increase in the population that would outstrip the growth in food supply
whcih of the following does not increase productivity
an increased money supply
which of the following statements is false
economic growth always leads to a more equitable distribution of income
which of the following resources is an example of infrastructure
elementary school
government funding of los alamos national labs is an example of government acting in its role to promote economic growth by
enhancing physical and human capital
the government decides to give tax exempt status to new organization whose mission is to award college scholarships to members of the armed forces. in doing so, the government is acting in its role to promote economic growth by
enhancing physical and human capital
the government decides to subsidize the development of a new communications network it is acting in its role to promote economic growth by
enhancing physical and human capital
when the government enforces contracts between two parties, it is acting in its role to promote economic growth by
ensuring a stable legal system
improvements in technology
explain most of the economic growth in recent decades
malthus believed that population increased _____________ and food resources increased
geometrically, arithmetically
the primary reason the US standard of living is relatively __________ is that US workers produce___________ than workers throughout most of the rest of the world
high, more
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
all of the following are considered source s of long run growth except
increases in demand
schumpter's term creative destruction describes the
innovative dynamism of capitalism
property rights consist of ___________ goods that _______________ be easily measured
intangible , cannot
which statement about the rule of 70 is not true
it becomes more accurate over time
investment in human capital is important because
it increases labor productivity
which statement about short run economic growth is not true
it is likely to occur when ostacles preventing resources from being used are put in place
which statement about long run economic growth is true
it is likely to occur when the capacity to produce goods and services increases
the natural gas deposits found in the united states over the past decade are an example of an increase in
land and natural resources
if a country has a low capital to labor ration, then it tends to have
low labor productivity and low wages
which of the following technologies most strongly affected the growth in us productivity in recent decades
microcomputers
a production function of the sort that says output per worker equals a* f(l/l, k/l, h/l, n/l) tells us all of the following except that ____________ will lead to a better standard of living
more people
which is not a source of productivity growth
moving resources from production to pension benefits
the classical form of the production function states that
output= f(l,k)
the catch up effect tends to
slow down over time
what is the primary explanation for the rapid growth of the us economy over the last century
technological progress
increases in ________ often lead to economic growth
technology
every year in india
tens of millions of people get out of poverty
which of the following statements about the role of social media in promoting economic growth is false
the advent of social media raised costs for firms, which now much invest in web ages and information gathering technology to stay competitive
on the job training can lead to an increase in
the quality of the labor force
if a country's population increases at a higher rate than the growth in its real gdp
the standard of living in the society has declined
because of the work of __________ during the late 18th and early 19th cenutries, economics became known as the dismal science
thomas malthus
policy makers look at ___________________ to compare growth rates over an entire year without seasonal ups and downs
year over year gdp growth rates
total factor productivity would not change if
a major new source of oil was discovered
the table shows that the country with the most productive workers is
country A
which of the following is not a source of productivity growth
decreasing the capital to labor ratio
the us patent office grants rene a patent for a new method of waterproofing outdoor gear. it is acting in its role to promote economic growth by
ensuring a stable legal system
the ability to use physical resources in creative ways to produce goods and services is known as
entrepreneurial ability, technology, and ideas
the capital to labor ratio is
high in rich countries
the higher the productivity of a nation, the
higher is its standard of living
technology
improves the productivity of all factors
which of the following occurrences is not a source of productivity growth
increasing the level of consumption spending
one reasonably objective measure of intangible infrastructure is the
index of economic freedom
one of the reasons that property rights are important for economic development is that without legal ownership
loans are very difficult to obtain
physical capital includes
manufactured products that are used to produce other goods and services
an example of intangible infrastructure is
patent laws
according to malthus, what part of the economy might increase at a rate such that the data would show an increase from 1,000 to 2,000 to 4,000 to 16,000
population
infrastructure is defined as a countrys
public 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
human capital includes
the improvements to labor capabilities from training, education, and apprenticeship programs
for which growth rate would the rule of 70 be most accurate
1%
if output equals a*(5k+2l), what is output if a equals 2,000, capital equals 10, and labor equals 100
500,000
the historical evidence shows that
a country's defree of freedom is related to the level of economic growth
infrastructure is
a country's public capital
according to malthus, a fixed quantity of land and a growing human population will eventually produce
a stationary statein which growth will cease
which of the following factors is not generally viewed by economists as critical to economic growth
access to a large amount of natural resources
the recent global financial instability
all of the answers are correct
decreasing the accessibility to college in order to funnel workers into the workforce faster will
decrease productivity of the economy
which of the following is not an example of infrastructure in the US
desktop computers in the work place
when the government records a deed showing that ownership of a piece of property has passed from one party to another, it is acting in its role to promote economic growth by
ensuring a stable legal system
one way a stable financial system supports economic growth is that it
ficilitates the movement of capital from savings to investment
to have long term economic growth, the production function suggests
increasing the availability of echnology, capital, and labor
according to schumpeter, the most important activity that drives business cycles is
innovation
excessive inflation or deflation
interferes with the price mechanism that brings a market to equilibrium
in the absence of copyright and patent laws
it is difficult for innovators to profit from their efforts
an increase in physical capital per worker will
lead to more output per worker
the index of economic freedom
measures the quality of a country's intangible infrastructure
generally, nations with the ____________economic freedom also have the ______________ per capita gdp
most; highest
the relationship between economic freedom and per capita gdp is
positive
over the past century, when worker productivity rose
real wages rose
a production function
shows the output that is produced using different combinations of inputs combined with existing technology
which of the following occurrences is the key explanation for the high economic growth in the united states in the past century
technology improvements
labor includes all of the following factors except
the ability to use physical resources in creative ways to produce goods and services
creative destruction occurs when
the periodic emergence of innovation boosts the economy
