econ midterm 3

During which period of recent human history was per capita income growth highest?

1820-1998 AD

Which of the following regions has lagged behind the others in growth over the past 2 centuries?

Africa

How do institutions impact growth?

Bad institutions hurt growth by taking people's money/profit - Extracted institutions - Destroy property rights Good institutions are the foundation - Not necessarily democracy (ex. china)

What's the input-led growth trap and how do the Asian tigers show it?

Cant be sustained Model for growth, but then collapsed

The industrial revolution

Created more jobs than it destroyed.

Which of the following will increase growth in poor countries but not rich countries?

Disease control

___ long-term interest rates and ___ economic growth in the developed world are evidence of possible secular stagnation.

Falling; falling

(T/F) Investment increases when interest rates rise.

False

When females entered the labor force starting in the early 1970s

GDP growth due to labor force participation grew.

After disaster events like wars and earthquakes, countries often

Grow faster as they rebuild and put unused resources back to work.

East Asian countries were able to grow in the second half of the 20th century primarily because of

High domestic savings.

Which of the following is not a way to increase productivity?

Increase hours worked

What has happened to GDP growth in the developed world over the past 30 years?

It has decreased consistently.

Secular stagnation is a ___ growth phenomenon that operates through the ___.

Long run; demand side of the economy

What's secular stagnation? What does it mean for growth?

Long-run shortage in demand A theory Based on what we've seen- an explanation for why growth is slow

Which of the following is NOT a method we discussed for increasing productivity?

Lower taxes

Which of these productivity factors does not suffer from diminishing marginal returns?

Managerial efficiency techniques

Catch up growth is

Not sustainable because of diminishing returns to capital investment.

Y/N=Y/H*H/W*W/N

Productivity x hours/worker x workers/person = gdp per capita If the economy is growing, it means one of these things is going up

The Industrial Revolution did all of the following except

Reduced the average productivity of the workforce.

The growth rate of countries after recessions is high because

Resources that were not being used are put back to work

If inflation and GDP growth are falling, what is this a sign of?

The economy is demand short.

Which of the following most closely defines productivity?

The value of the amount of goods and services produced per worker

What happened to wages of ordinary workers during the early years of the Industrial Revolution?

They stagnated through the first 40 years.

n class, we showed that European countries had a lower GDP per capita than the US because

They worked less hours.

(T/F) Growth solutions for developed countries often take a long time to show their effect.

True

(T/F) Investment explains a large amount, but not all, of a country's economic growth

True

Which of the following is not multiplied together to get GDP per capita?

Workers per hour

The Industrial Revolution shifted power from __ to __ in the global economy.

land owners; capital holders

The Industrial Revolution increased economic growth by

moving workers from low productivity agricultural work to higher productivity industrial work

(T/F) Developed country growth rates and interest rates have been steadily falling for over 30 years.

true

(T/F) GDP growth across the world was almost non-existent from 0-1000 AD.

true

(T/F) Interest rates across the developed world have been falling for several decades.

true

(T/F) Over the past 30 years in the US, the growth of median income has been slower than the growth of GDP per capita.

true