Chapter 25 review

Calculate growth rate in productivity...

(Productivity year 2- Productivity year 1)/ Productivity in year 1 x 100

Which of the following lists contains, in this order, natural resources, physical capital, and human capital?

For a shoe factory: leather, hand tools, the managers' knowledge of shoe making

Country A and country B are the same except country A currently has more capital. Assuming diminishing returns, if both countries increase their capital by 100 unites and other factors that determine output are unchanged, then....

Output in country A increases by the same amount as in country B

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Productivity

Productivity=

Real GDP/ Labor hours

Calculate Productivity

Real GDP/ number of labor hours

real GDP per capita =

Real GDP/ population

The long-run effect of an increase in the saving rate include

a higher level of productivity

The curve becomes flatter as the amount of capital per worker increases because of

diminishing returns to capital

A leading environmental group recently published a report contending that humans are running a "resource deficit" because we are using natural resources faster than they can be regenerated. The group claims that this means that economic growth will eventually stop, and will even be reserved. An economist would...

disagree with the report, in part because it ignores the mitigating effect of technological change

Which of the following measures how the level of well-being in a country has changed over time?

growth rate of real GDP per person

Which of the following is a determinant of productivity?

human capital per worker, physical capital per worker, natural resources

The catch- up effect refers to the idea that..

it is easier for a country to grow fast and so catch-up if it starts out relatively poor.

The Economic Development Minister of a country has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries. She asks you to pick the one you think most likely explains her country's low growth. Which of the following contributes to low growth?

poorly enforced property rights