Smartbook 11

Suppose the annual growth rate of GDP in the United States is 4%. The GDP in the United States will double in ______ years.

17.5

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

30.43

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

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

Rule of 70 equation

Approximate number of years required to double Real GPD = 70/annual percentage rate of growth

What are leader countries?

Countries that develop and use the most advanced technologies

The determinants that directly affect economic growth can be grouped into which of the following categories?

Demand Efficiency Supply

Economic growth is realized when the production possibilities curve shifts because of changes in which of the following factors?

Efficiency Demand

True or false: Countries that experienced economic growth earlier than other countries have lower average incomes today.

False

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

Full employment

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?

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

What are the two supply-side elements of real GDP?

Increases in labor productivity Increases in hours worked

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

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

Which of these explain why growth is an important economic goal?

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

Which of the following comprise technological advancement?

New forms of business organization Innovative production techniques New managerial methods

Which of the following summarize how the social-cultural-political environment of the United States has encouraged economic growth?

No social or moral taboos on production A competitive market system

____ and _____ give a strong financial incentive to inventors and authors to invent and create.

Patents, copyrights

What do antigrowth economists cite as evidence in favor of their argument that growth is undesirable?

Poverty Pollution Materialism

Which of the following are arguments against rapid economic growth?

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.

Which of the following are growth-promoting institutional structures?

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

Which of the following factors of productivity growth helps to promote the development of new forms of business organization?

Technological advance

Which of the following helps explain why the growth rate in the United States has been positive during the 1900s?

The increase in labor productivity

True or false: Growth enables society to improve nations' infrastructure.

True

Which of the following institutional structures promote and sustain modern economic growth?

Widespread education for the workforce that will promote new technology innovations and implementation Patents and copyrights giving inventors and authors the exclusive right to market and sell their creations for a period of time Financial institutions that channel the savings generated by households toward businesses, entrepreneurs and inventors Strong property rights that give citizens the right to own investments and property

Economists define and measure economic growth as ______.

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

Modern economic growth has significantly increased the standard of living as well as ____ social, and political arrangements.

cultural

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

demand

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

demand factor

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 ____

economy scale

The four supply factors that constitute changes in physical and technical agents of production ______.

enable an economy to expand its potential GDP

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 potential.

full employment

An economy that is experiencing economic ______ is better able to meet people's wants and resolve socioeconomic problems.

growth

Economic growth provides society ______.

higher living standards greater material abundance more goods and services

Those countries which experienced modern economic growth earlier than other countries now have significantly ______.

higher standard of living

A nation's economic growth from one year to the next depends on its ______.

increase in labor inputs and increase in labor productivity

If the amount of capital per worker _____labor productivity will increase.

increases

Increased capital is important to productivity growth because the ______ in the quantity and quality of capital will make workers ______ productive.

increases; more

An increase in productivity growth is important because real output, real income and real wages are linked to ______.

labor productivity

Output per hour of work is the definition of:

labor productivity

The two main supply-side elements that contribute to changes in real GDP are increases in hours worked and increases in ______.

labor productivity

The fraction of the working-age population that is in the labor force is called the ______ rate.

labor-force participation

Countries that develop and use the most advanced technologies, which then became available to follower countries, are known as _____ countries.

leader

Increases in capital are important to productivity growth because increases in the quantity and quality of capital ______.

make workers more productive

The demand factor involves households, businesses, and government purchasing the economy's expanding output of goods and services so that there will be ______.

no unplanned increase in inventories and resources will remain fully employed

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

patents and copyrights

Economic growth can be illustrated when the demand factor and the efficiency factor shift the production _____curve outward.

possibilities

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

property

Increasing productivity leads to improved standards of living by increasing ______.

real hourly earnings

Labor productivity is:

real output per hour of work

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

saving

Sources of funds for investment spending in plant and equipment are ______.

savings by households, governments, and foreigners

Because people will not invest if they believe that thieves, bandits, or a rapacious and tyrannical government will steal their investments or their expected returns, ______ are important.

strong property rights

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

supply

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

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