Ch 7 HW

The recent global financial instability: slowed down economic growth. harmed standards of living. caused severe credit crunches. All of the answers are correct.

All of the answers are correct.

Which is NOT an example of infrastructure? Hoover Dam the federal highway system airports Walmart stores

Walmart stores

According to Malthus, a fixed quantity of land and a growing human population will eventually produce: a stationary state in which the economy grows but at a fixed rate. accelerating economic growth. continuous yet variable economic growth. a stationary state in which growth will cease.

a stationary state in which growth will cease.

Which of the following factors is NOT generally viewed by economists as critical to economic growth? strong and fair legal system stable monetary system access to large amounts of natural resources economic freedom

access to large amounts of natural resources

The government decides to subsidize the development of a new communications network. It is acting in its role to promote economic growth by: ensuring a stable legal system. enhancing physical and human capital. ensuring a stable and secure financial system. promoting free and competitive markets.

enhancing physical and human capital.

The ability to use physical resources in creative ways to produce goods and services is known as: labor. natural resources. physical capital. entrepreneurial ability, technology, and ideas.

entrepreneurial ability, technology, and ideas.

According to the classical model, which of the following developments does NOT contribute to economic growth? labor productivity more capital technological change higher interest rate

higher interest rate

Developed nations tend to have: limited labor supplies but lots of capital. low capital-to-labor ratios. limited amounts of both labor and capital. large amounts of both labor and capital.

limited labor supplies but lots of capital.

The relationship between economic freedom and per capita GDP is: negative. positive. negative for advanced economies and positive for developing economies. positive for advanced economies and negative for developing economies.

positive.

A production function: shows the output that is produced using different combinations of inputs combined with existing technology. shows the output that is produced using different combinations of technology combined with existing inputs. shows the output that is most highly valued by consumers. shows the most desired production method for a given level of output.

shows the output that is produced using different combinations of inputs combined with existing technology.

What is the primary explanation for the rapid growth of the U.S. economy over the last century? increases in the number of immigrants increases in human capital increases in government spending for the infrastructure technological progress

technological progress

If a country's population increases at a higher rate than the growth in its real GDP: GDP per capita has increased. the standard of living in the country has declined. average output per person remains constant. the country's rate of inflation has increased.

the standard of living in the country has declined.

According to Joseph Schumpeter, what is the driving force behind business cycles? waves of inventions weather cycles waves of innovations consumer spending

waves of innovations

The classical form of the production function states that: Output = f(L / K) Output = f(N, K) Output = f(L, K) Output = f(N / K)

Output = f(L, K)

Over the past century, when worker productivity rose: real wages rose. fewer public goods were available. nominal prices rose. capital fell.

real wages rose.

If the Bureau of Economic Analysis reports that the annualized U.S. 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%. 2.5%. 7.5%. 10%.

0.625%.

Developing countries can achieve higher productivity per unit of capital because they can use technologies developed by other countries. This is known as the: increasing returns to capital effect. copycat effect. catch-up effect. productivity effect.

catch-up effect.

If an economy's GDP will double in 25 years, then its growth rate must be about: 2.5%. 2.8%. 25%. 28%.

2.8%