Macro Economic Growth Problems

A country's real GDP per capita equals the country's real GDP divided by its adult population.

False Total population not adult

There is no opportunity cost when a country chooses to produce additional physical capital or additional human capital.

False Tradeoff between consumption and investment

A country's standard of living is measured by its real GDP.

False We want things per capita Per capita is only one way to measure a countries standard of living

Improvements in technology help countries surpass the productivity limits imposed by diminishing returns to capital and human capital.

True

Real GDP per capita is not adjusted for pollution, crime, or changes in the quality of services.

True

The country of Cy has a small quantity of capital available to its workers, and the country of Herky has a large quantity of capital available to its workers. Therefore, if both countries experience an identical increase in the quantity of capital available to workers, Cy's labor productivity will improve more than Herky's labor productivity will.

True

In the long run, a country will experience sustained economic growth only if it experiences continuing improvements in technology.

True Eventually diminishing returns on capital, no point in working more

Economic growth occurs when a country's real GDP per capita increases.

True To measure economic growth that we'll report is the Real GDP Per Capita percentage change

Holding all else constant, a country that is open to foreign trade and investment is likely to experience faster economic growth than a country that is closed to foreign trade and investment.

True Trade based on competitive advantage make us better off, industries protected grow less quickly Foreign investment Way of increasing its capital stock

A small but consistent economic growth rate can greatly improve a country's standard of living in the long run.

True

Which of the following is subject to diminishing returns? A. both physical capital and human capital B. physical capital, but not human capital C. human capital, but not physical capital neither physical capital nor human capital

A. both physical capital and human capital

15. In the long run, _____ differences in economic growth rates result in _____ differences in standards of living across countries. A. small; no B. small; large C. large; no D.large; small

B. small; large

14. In the country of Hawkeye in 2014, the growth rate of real GDP was 5%, and the growth rate of the population was 2%. Therefore, Hawkeye's economic growth rate in 2014 was approximately Economic Growth Rate =GDP/Capital = %Change in real GDP - %Change in population A. 2%. B. 2.5%. C. 3%. D. 5%. E. 7%.

C. 3%.

Which of the following government policies would not promote economic growth?A. improving the enforcement of property rights B. protecting intellectual property with patents and copyrights C. subsidizing research and development D. subsidizing education E. restricting international trade and investment All of the above would promote economic growth.

E. restricting international trade and investment

Sustained economic growth has occurred throughout human history.

False

Human capital refers to machinery and equipment that must be operated by workers.

False Human capital is the skills gathered from education, training, and experience

A country's standard of living depends on its ability to produce goods and services.

True