CHAPTER 17

Long-run economic growth can be achieved with:

A rightward shift in the long-run aggregate supply curve.

Long-run economic growth can occur as the result of:

A technological advance.

Expansionary monetary and fiscal policies are designed to move the economy in Figure 17.1, in the short run, from point:

A to point D.

Which of the following also occurs as the production possibilities curve shifts outward?

Aggregate supply increases

The process of economic growth is:

Cumulative, whereby gains made in one year accumulate in future years.

Monetary and fiscal policies that encourage the long-run growth of net investment and increase labor productivity are designed to move the economy in Figure 17.1 from point:

D to point C.

Improvements in output per worker:

Depend in large part on increases in the quantity of capital equipment and the quality of capital equipment.

Which of the following policy levers definitely enhances productivity?

Development of human capital

Additional capital makes its best contribution to economic growth by:

Enhancing labor productivity.

Which measurement is most useful for comparing the standard of living in different countries?

GDP per capita

Which of the following measures productivity?

GDP per worker

The best measure of net investment is:

Gross investment less depreciation.

In recent decades, a primary source of growth in U.S. output has been:

Increased productivity per worker.

In the short run, economic growth comes from:

Increased use of our productive capabilities.

The "new growth theory" of economic growth emphasizes the importance of:

Investing in ideas.

Which of the following could impede productivity improvements?

Lack of savings

Which of the following is a major goal of short-run macroeconomic policy?

Move toward the production possibilities curve

A short-run increase in capacity utilization:

Moves the economy to a point closer to its existing production possibilities curve.

Economists define economic growth in terms of changes in:

Potential GDP.

Which of the following has made the greatest contribution to economic growth over time?

R&D

An economy experiences economic growth whenever:

Real GDP rises.

Rising employment rates imply:

Rising per capita GDP.

Using Figure 17.6, long-run economic growth implies a:

Shift from LRAS1 to LRAS2.

Long-run economic growth can be illustrated in Figure 17.1 by a:

Shift outward of the production-possibilities curve.

Long-run macroeconomic growth:

Shifts the production possibilities curve outward.

A long-run increase in capacity:

Shifts the production possibilities curve rightward.

A sustained increase in total output is possible only if the aggregate:

Supply curve shifts to the right.

A movement from point A to point D in Figure 17.6, indicates that:

The capacity of the economy has increased.

Human capital is:

The knowledge and skills possessed by the labor force.

For much of the 1970s and 1980s, the average yearly change in productivity:

Was significantly less than the average yearly change in productivity for 1995-2000.