Macro Ch 7 - Economic Growth

Which of the following contributors to productivity growth has become a significant driver of changes in real GDP growth only after 2008 in the U.S.? A) Physical capital B) Human capital C) Technology D) We cannot tell

A

Which of the following government policies would likely not increase economic growth? A) Decreasing the sales tax B) Decreasing the capital gains tax C) Decrease the interest rate D) Spend more of the government's budget on R&D

A

Which of the following is a way that we could increase investment without increasing real GDP? A) Increase consumption B) Increase government spending C) Increase exports D) Increase imports

D

Human capital is defined as: A) The skills and education that make workers more productive B) The knowledge of the best and most efficient ways to produce goods and services C) The total number of workers available in the economy D) The total amount of financial investment in an economy

A

If an American firm builds a factory in Thailand, this is an example of: A) Foreign direct investment B) An increase in human capital C) Productivity D) Opportunity cost

A

Suppose that a developing nation instituted policies to make it easier for international corporations to engage in foreign direct investment. Which of the following elements of productivity growth is most likely to be impacted by this change? A) The level of physical capital B) The level of human capital C) The level of technology D) We cannot tell

A

Suppose that a political uprising in a country made the governance of that country less certain than before. This would most likely ______________ real GDP and ______________ productivity A) Decrease; decrease B) Decrease; not affect C) Not affect; decrease D) Not affect; not affect

A

Suppose that productivity grew faster in country A than in country B last year. Both countries had the same growth rate of human capital, and physical capital grew faster in country B. Which of the following must be true? A) Technological growth was higher in country A. B) Technological growth was higher in country B. C) Technology grew at the same rate in both countries. D) We cannot tell.

A

Suppose that, as a policymaker, you wanted to encourage the growth of human capital. Which of these policies would you be most likely to choose? A) A tax credit for saving for college B) An increase in R&D spending C) A decrease in the interest rate D) None of the above

A

Which of the following components of productivity would be most likely to be positively impacted by an increase in the savings rate in an economy? A) The level of physical capital B) The level of human capital C) The level of technology D) All of the above

A

Suppose real GDP per capita in a country was $5000 last year, and is $5500 this year. What was the rate of growth in real GDP per capita over the year, and how long would it take for real GDP to double at this rate? A) 5%; about 7 years B) 10%; about 7 years C) 10%; about 14 years D) 5%; about 14 years

B

Suppose that the company you work for institutes a new employee training program to better prepare incoming employees for their new jobs. This could increase productivity by increasing which of the following? A) The level of physical capital B) The level of human capital C) The level of technology D) All of the above

B

Suppose the savings rate in the U.S. were to increase. What would happen to consumption today and to the stock of physical capital over time? A) Consumption would increase; physical capital would increase B) Consumption would decrease; physical capital would increase C) Consumption would increase; physical capital would not change D) We cannot tell

B

When journalists discuss economic growth, they are most often referring to ______________ the production possibilities frontier; when economists discuss economic growth, they are most often referring to ______________ the production possibilities frontier. A) A shift of; a movement towards B) A movement towards; a shift of C) A movement towards; a movement towards D) A shift of; a shift of

B

Which of the following components of productivity would be most likely to be positively impacted by incentivizing more people to save money for college? A) The level of physical capital B) The level of human capital C) The level of technology D) All of the above

B

Which of the following factors is commonly cited as a contributor for the slowdown in productivity growth in the 1970s but not in more recent slowdowns? A) Increased regulation B) Higher oil prices C) Increased competition from abroad D) A lack of technological progress

B

Which of the following is most likely to increase the rate of economic growth the most? Assume that all increases are of identical amounts. A) an increase in consumption B) an increase in investment C) an increase in government spending D) an increase in exports E) a decrease in imports

B

Which of the following is not an example of increasing one's human capital? A) Going to college to earn a bachelors degree. B) Making a new scientific discovery. C) Receiving on-the-job training. D) Attending technical school to become a licensed electrician.

B

Which of the following is the best measure of the standard of living in a country? A) Real GDP B) Real GDP per capita C) Productivity D) Productivity growth

B

Which of the following numbers best represents the average rate of growth of real GDP in the U.S. since WWII? A) 1% B) 3% C) 5% D) 7%

B

A small business has leased office space for $10,000 per year. It cannot get out of that contract. It could sublease the space to another business for $14,000 per year. Assuming no other costs, how high would revenues have to be to justify the small business continuing to use the space for itself? A) $4,000 B) $10,000 C) $14,000 D) $24,000

C

Foreign direct investment refers to: A) Buying the stocks of a foreign firm B) Lending money to a foreign government C) Building a piece of physical capital in a foreign country D) All of the above

C

If GDP grew at 6% per year, how long would it take for GDP to double? A) 6 years B) 3 years C) 12 years D) 9 years

C

Stephen lost a ticket to go to a concert this weekend that cost him $50 to purchase. Purchasing another ticket will cost him $50. Assuming his time is worth $25, what is the minimum level of benefits that would make a decision to go to the concert a rational one? A) $25 B) $50 C) $75 D) $100 E) $125

C

Suppose that immigration reform led to an increase in the workforce of the U.S. economy. This would most likely ______________ real GDP and ______________ productivity. A) Increase; increase B) Not affect; increase C) Increase; not affect D) Not affect; not affect

C

Suppose that, as a policymaker, you wanted to encourage the growth of physical capital. Which of these policies would you be most likely to choose? A) A tax credit for saving for college B) An increase in R&D spending C) A decrease in the interest rate D) None of the above

C

The primary cost of economic growth is: A) The environmental cost of growth. B) A lower rate of growth in the future. C) The opportunity cost of foregone consumption. D) None of the above.

C

Think about an economy that can produce two different categories of goods and is currently on its production possibility frontier. A decrease in the amount of resources necessary in the production of one of the goods, but not the other, will do what to the production of each of the two categories of goods produced? A) Only the production of the good with reduced necessary resources will increase. B) Only production of the other good will increase. C) Production of both goods may increase. D) It is not clear that either should change for economic efficiency.

C

What has been the single most significant factor in determining the growth rate of real GDP per capita in the U.S.? A) The labor force participation rate B) Population growth C) Productivity growth D) The unemployment rate

C

What is the primary reason that the labor force participation rate grew so much between 1960 and 1995? A) Wages were increasing, drawing in more workers B) High levels of immigration C) Increased participation of women in the workforce D) The post-war boom

C

Which of the following best describes the pattern of growth in real GDP since 1960 in the U.S.? A) The growth rate has been increasing B) The growth rate has remained constant C) The growth rate has been decreasing D) We cannot tell

C

Which of the following components of productivity would be most likely to be positively impacted by increasing the efficiency of the patent system? A) The level of physical capital B) The level of human capital C) The level of technology D) All of the above

C

Which of the following contributors to productivity growth is most responsible for changes in real GDP growth over time in the U.S.? A) Physical capital B) Human capital C) Technology D) We cannot tell

C

Which of the following does not represent an increase in the capacity of the economy to produce? A) A new factory is built. B) An invention makes a current production process cheaper. C) A previously unemployed worker returns to work. D) All of the above increase the capacity to produce.

C

Which of the following factors was most responsible for the decline in growth from the 1960-1973 period to the 1973-1995 period? A) A decline in labor force participation B) A decline in population growth C) A decline in productivity growth D) Both a and c

C

For the purposes of making a decision about introducing a new product, what is the relevant cost? $10 million has been spent to date on research and development. The results of the research and development can be sold to another company for $12 million. Additional labor and other costs necessary to complete the project equal $7 million. A) $ 7 million B) $ 9 million C) $ 17 million D) $ 19 million E) $ 31 million

D

If we are recovering from a recession, we would expect real GDP per capita to grow at a relatively ______________ rate and the economy's capacity to produce to grow at a relatively ______________ rate. A) Fast; fast B) Slow; normal C) Normal; fast D) Fast; normal

D

Productivity refers to: A) The economy's production possibility frontier B) The number of people in the workforce C) An increase from last year in how much was produced in the economy. D) The amount of output produced per hour of work

D

Suppose that productivity grew faster in country A than in country B last year. Both countries had the same growth rate of human capital, and physical capital grew faster in country A. Which of the following must be true? A) Technological growth was higher in country A. B) Technological growth was higher in country B. C) Technology grew at the same rate in both countries. D) We cannot tell.

D

Suppose that the company that you work for provides laptops to some of its employees for work purposes. The company decides to upgrade the software in its computers, and also to increase the number of employees which receive laptops. The first could impact productivity by increasing within the company while the second could impact productivity by increasing within the company. A) The level of physical capital; the level of human capital B) The level of physical capital; the level of technology C) The level of human capital; the level of technology D) The level of technology; the level of physical capital

D

Suppose that the federal government allocates more money to be spent on public colleges and universities. This could increase productivity by increasing: A) The level of physical capital B) The level of human capital C) The level of technology D) All of the above

D

Which of the following components of real GDP growth increased during the period from 1960 to 1995? A) Growth in productivity B) Population growth C) Average weekly hours D) The labor force participation rate

D

Which of the following factors was most responsible for the decline in growth from the 1995-2008 period to the 2008-2016 period? A) A decline in labor force participation B) A decline in population growth C) A decline in productivity growth D) Both a and c

D

Which of the following is most likely to result in an increase in economic growth that will enhance standards of living over time? A) an increase in consumption spending causing producers to expand production B) an increase in exports earning foreign currency C) an increase in the labor force D) a decrease in interest rates

D

Which of the following is the best measure of economic growth, as defined by economists, in a country? A) The growth rate of real GDP per capita B) Real GDP per capita C) Productivity D) The growth rate of productivity

D