Macro Unit 6

To graphically show economic growth at full employment we could draw

rightward shift of the LRAS curve and an outward shift of the PPC/PPF

Many USA producers believe an economy's productive capacity can be categorized by

specialization and division of labor

If an economy has real GDP of $10,000,000 and a population of 100 in Year 1 and real GDP at $10,500,000 and a population of 120 in Year 2, we would say that the economic growth as measured by real GDP per capita from Year 1 to Year 2 was

-12.5% (Final GDP pc - Inital GDP pc)/(initial GDP pc)

If an economy has real GDP of $10,000,000 in Year 1 and a population of 100 real GDP of $10,500,000 and a population of 120 in year 2, we would say that the real GDP per capita for Year 1 was

$100,000

A country will double its GDP in twenty years if its annual growth rate is

3.5 percent

Assuming a country's economy maintains an 8% rate of growth, young adults starting at age 20 would see the average standard of living in their country more than double by the time they had reached age __________.

30

In certain African countries like Niger, Tanzania, Nigeria, and Sudan, for example, GDP per capita at the start of the 2000s was still less than $___________.

300

If an economy has real GDP of $10,000,000 in Year 1 and real GDP of $10,500,000 in Year 2, we would say that the economic growth in real GDP from year 1 to year 2 was

5%

When discussing economic growth it is often useful to focus on ______ to avoid studying changes in the size of the GDP that represent only having more people in the economy and focus on those increases in GDP which represent an actual rise in the standard of living on a per person basis

GDP per capita

Which of the following is correct

Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital.

Which of the following best describes the relationship between economic growth and literacy

Increased literacy stimulates economic growth by raising labor productivity and as the economy grows, people consume more education

______ is output per hour in the business sector

Productivity

The largest increases in economic growth since 1980 have occurred in

Southeast Asia

_______________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s

The Industrial Revolution

A company's productive capacity is often graphically represented by

a vertical LRAS curve

An economy's production capacity is often graphically represented by

a vertical LRAS curve

In macroeconomics, the connection from inputs to outputs for the entire economy is called

an aggregate production function

Which of the following factors contribute to economic growth

an increase in the proportion of the population that is college educated

When society has a higher level of capital per person, it is called

capital deepening

IF AD was unchanging while the LRAS increased, the general price level would most likely

decrease

Country Able and Country Baker initially have the same real GDP per capita. Country Able experiences no economic growth, while Country Baker grows at a sustained rate of 7 percent. In 12 years, Country Baker's GDP will be approximately ___________ that of Country Able.

double

Often, the USA federal and state governments intervene in the economy in order to promote In the USA we generally use real GDP to measure

economic growth

A major goal of USA economic policy makers is to increase the economy's productive capacity at full

employment

In order to foster innovation and technological advances, governments

enforce intellectual property rights

Some recent economic research has suggested the African countries; economic growth many have been limited by

geography and climate

In the long run, the most important source of increase in a nation's standard of living is a:

high rate of economic growth

Which of the government policies below is most unlikely to encourage per capita economic growth Which of the following is most likely to contribute to economic growth as measured by GDP per capita

high taxes on companies that spend a lot on capital formation increased capital formation

If AD increased while LRAS was unchanging the general price level would most likely

increase

Tax breaks for companies investing in research and development are usually intended to Subsidies for the production of productivity-enhancing machines are usually intended to

increase AS

over the last 100 years, the USA capital has

increased faster than population

Over the last 60 years, the greatest contributors to economic growth in the USA

innovation and education

Investment in human capital

is characterized by both b) and c)

A nation can achieve higher economic growth if

it devotes more resources to research and development

A nation can achieve higher economic growth if:

it devotes more resources to research and development.

Which of the following did not result in economic growth

many citizens emigrating from Zimbabwe when a politically repressive regime took office

In general, the ultimate goal for producers is to increase productivity in order to produce

more with fewer resources

The statement: "economic growth needs to stop because it is so devastating to the environment" is an example of

normative economics

Country Alpha and Country Beta initially have the same real GDP per capita. Country Alpha experiences no economic growth, while Country Beta grows at a sustained rate of 5 percent. In 14 years, Country Alpha's GDP will be approximately _________ that of Country Beta.

one-half

Over the long run, ____________ per hour is the most important determinant of the average wage level in any economy. The value of what is produced per worker or per hour worked is called The ratio of output per unit of input

productivity

Economists typically measure economic growth by tracking

real GDP per capita

Since the late 1950s, economists have performed "growth accounting" studies in the United States. These have determined that ________________ is typically the most important contributor to U.S. economic growth.

technology

Which of the following is unlikely to affect the rate of economic growth

the level of government spending

Increased investment alone will guarantee economic growth.

this is a false statement because economic growth hinges on the quality and type of investment as well as the human capital and improvements in technology