Economic Growth

China is allocating less of its output toward consumption and more toward:

the production of new capital.

Knowing how fast an economy is growing relative to population tells us:

whether standards of living are rising or falling on average.

The points on the production possibilities frontier show how we are allocating our to the production of two different goods or services.

resources

A(n) amount of capital stops a country from achieving its full potential.

small

The rule of is a quick and easy way to estimate how long it will take for a number or amount to double in size given a constant rate of growth.

72

The foundation of a science that would come to be known as economics began with:

Adam Smith's book The Wealth of Nations.

The changes and improvements in people's lives that began by 1770 are detailed in a book called An inquiry into the Nature and Causes of the Wealth of Nations by

Blank 1: Adam Blank 2: Smith

is an increase in real gross domestic product or real gross domestic product per capita. (Enter one word in each blank.)

Blank 1: Economic Blank 2: growth

The more a country has, the more productive it will be.

Blank 1: capital

There are returns to capital for an economy.

Blank 1: diminishing or decreasing

In Great Britain by 1750, whole sections of the English peasantry were enjoying levels of prosperity and wealth that had previously been reserved for elites such as kings and clergy. (True or False)

True

When it comes to growth rates, small changes can have big impacts and steady growth over time can change the world. (True or False)

True

While some countries have experienced improvements in standards of living, there are a few countries that are subject to absolute poverty. (True or False)

True

When we measure economic growth, we are interested in how the economy is growing.

fast

In the 10 years after NAFTA's enactment, from 1994 to 2004, growth in the United States was than in the decade preceding it.

faster

The time it takes for something to double is approximately equal to 72 divided by the rate. (Enter one word in the blank.)

growth

Scottish philosopher Adam Smith wrote his book An Inquiry into the Nature and Causes of the Wealth of Nations:

to try to explain the changes and improvements in people's lives by 1770.

Given a constant rate of growth, the rule of 72 is a quick and easy way to estimate how long it will take for a number or amount to:

double in size.

An increase in real GDP or real GDP per capita is called:

economic growth.

The term "poor" is a(n) _____ term; we must define it in comparison with some benchmark.

relative

Starting in the late 1600s, certain economies started to grow faster than ever before and as they grew the of living of the people within them grew too. (Enter one word in the blank.)

standard

Historically, the average income in the United States is:

about 4 times greater than the world average.

The more capital a country has, the productive it will be.

more

Economic growth is defined as:

an increase in real GDP or real GDP per capita.

Economic growth results from choices we make as a society. (True or False)

True

Suppose that in year 1, real GDP per capita was $25,000 billion and in year 2, real GDP per capita rose to $28,000 billion. The growth rate of real GDP per capita was %. (Enter just the number; % sign has been provided for you.)

12

Suppose that real GDP per capita equals $25,000 and that the growth rate of real GDP per capita is 6 percent per year. It will take years for real GDP per capita to double to $50,000.

12

Suppose that the growth rate of real GDP per capita is 6 percent per year. It will take years for real GDP per capita to double.

12

Suppose the real GDP of a country is $75 billion in Year 1. If the real GDP rises to $90 billion in Year 2, the growth rate of real GDP is

Blank 1: 20, twenty, or 20%

Suppose that the growth rate of real GDP per capita is 12 percent per year. It will take years for real GDP per capita to double.

Blank 1: 6 or six

Suppose the real GDP of a country was $50 billion in Year 1. In Year 2, the real GDP rose to $54 billion. The growth rate of real GDP was %. (Enter a number in the blank.)

Blank 1: 8 or eight

growth is calculated using real GDP or real GDP per capita.

Economic

Encouraging economic growth in developing economies involves just increasing the amount of capital available to workers. (True or False)

False

Which of the following is true of the formula [(New Real GDP −- Old Real GDP)/Old Real GDP] ×× 100%?

It gives us the economic growth rate.

Which of the following is not a way in which economic growth can occur?

Prices fall.

Using a production possibilities curve, economic growth resulting from the use of previously idle resources is shown as:

a movement toward the curve.

Using a production possibilities curve, economic growth resulting from additional resources is shown as:

an outward shift of the curve.

Since 1978, has been able to sustain average growth rates of roughly 9 percent. (Name the country.)

china

An example of how existing resources can become more productive is:

coffee pickers who are younger and fitter.

Some economies started to grow faster than ever before starting in the:

late 1600s.

Compared to the United States, China has a much fraction of GDP that goes to household consumption.

lower

A graph that shows the possible combinations of two different goods or services that can be produced with fixed resources and technology is the:

production possibilities frontier.