Chapter 7 Graded Quiz

Which statement about the Rule of 70 is TRUE?

It is fairly accurate for small growth rates.

The historical evidence shows that:

a country's degree of freedom is related to the level of economic growth.

Protection of property rights is:

an intangible resource that is part of the infrastructure.

Malthus believed that population increased ______ and food resources increased ______.

geometrically; arithmetically

All of the following are considered sources of long-run growth EXCEPT:

increases in demand.

Developed nations tend to have:

limited labor supplies but lots of capital.

Physical capital includes:

manufactured products that are used to produce other goods and services.

The relationship between economic freedom and per capita GDP is:

positive.

infrastructure is defined as a country's:

public capital.

Economic growth is most commonly measured by:

real GDP per capita.

If technology is held constant, an increase in capital concurrent with a decrease in labor input causes output to:

rise, fall, or stay the same.

The catch-up effect tends to:

slow down over time.

A stable financial system is important for all of the following reasons EXCEPT:

tax rate stability.

Increases in ___________ often lead to economic growth.

technology

Which of the following occurrences is the key explanation for the high economic growth in the United States in the past century?

technology improvements

In the United States, real GDP is measured by:

the Bureau of Economic Analysis.

The capital-to-labor ratio measures:

the amount of economic capital per worker.

On-the-job training can lead to an increase in:

the quality of the labor force.

Which is NOT a characteristic of a stable financial system?

unanticipated high inflation

Land and natural resources include:

water and minerals that come from the earth.