Question 1

Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect

Accepted Answer

A)   present consumption to rise.
B)   future consumption to fall.
C)   a lower rate of growth of real GDP.
D)   labor productivity to rise.E) A) and D)
F) B) and C)

Question 2

Economies of scale refers to

Accepted Answer

A)   the idea that proprietorships are less bureaucratic and therefore more eﬃcient than corporations.
B)   public investments in highways, schools, utilities, and such.
C)   the fact that large producers may be able to use more eﬃcient technologies than smaller producers.
D)   the reallocation of labor from less-productive to more-productive uses.E) All of the above
F) B) and C)

Question 3

Year  Quantity of Labor  Productivity of Labor 12,000$20022,00021032,000210\begin{array} { | c | c | c | } \hline 	ext { Year } & 	ext { Quantity of Labor } & 	ext { Productivity of Labor } \\hline 1 & 2,000 & \$ 200 \\hline 2 & 2,000 & 210 \\hline 3 & 2,000 & 210 \\hline\end{array} Year 123​ Quantity of Labor 2,0002,0002,000​ Productivity of Labor $200210210​​  The table shows the quantity of labor (measured in hours)  and the productivity of labor (measured in real GDP per hour)  in a hypothetical economy in three different years. Between Year 2 and Year 3,
Real GDP increased by

Accepted Answer

A)   2 percent.
B)   5 percent.
C)   0 percent.
D)   15 percent. E) B) and D)
F) A) and B)

Question 4

One major economic beneﬁt of global competition is

Accepted Answer

A)   lower unemployment.
B)   increased protection of domestic ﬁrms.
C)   pressure to innovate.
D)   more leisure opportunities.E) All of the above
F) A) and D)

Question 5

Refer to the graph. An increase in an economy's labor productivity would

Accepted Answer

A)   move the economy away from point A and toward point B.
B)   move the economy away from point B and toward point A.
C)   shift curve AB to CD.
D)   shift curve CD to AB.E) A) and C)
F) A) and B)

Question 6

Which of the following statements is true about productivity growth in the United States since the Great Recession?

Accepted Answer

A)   The productivity growth rate has stagnated to about 3 percent per year.
B)   The productivity growth rate fell to 0.7 percent from 2010 to 2018.
C)   Productivity growth grew as new products, particularly Internet apps, were introduced.
D)   Firms have lacked the capacity to meet consumer demand, causing measured productivity to fall.E) None of the above
F) A) and B)

Question 7

Which of the following explanations is consistent with the decline in productivity growth that followed the Great Recession?

Accepted Answer

A)   High levels of debt incurred prior to the Great Recession have hindered ﬁrms' ability to make productivity-enhancing investments.
B)   The Federal Reserve kept interest rates too high, stiﬂing investments that would increase productivity.
C)   High levels of inﬂation following the Great Recession created too much uncertainty for ﬁrms, discouraging productivity-enhancing investments.
D)   Consumer demand following the Great Recession exceeded ﬁrms' capacity to satisfy that demand.E) All of the above
F) B) and D)

Question 8

Since the 1950s, the U.S. average annual rate of growth of real GDP was higher than the average
annual growth of real GDP per capita.

Accepted Answer

A) True 
 B)False

Question 9

The intense competition of free trade prevents the investment that generates economic growth.

Accepted Answer

A) True 
 B)False

Question 10

The "rule of 70" is a formula for determining the approximate number of

Accepted Answer

A)   years that it would take for a value (like real GDP)  to expand 70 times.
B)   years that it would take for a value (like real GDP)  to double.
C)   times a value (like real GDP)  is a multiple of 70.
D)   times one could double a certain value (like real GDP)  over 70 years.E) None of the above
F) All of the above

Question 11

Year  Alta (Real GDP)   Zorn (Real GDP)   Alta (Population)   Zorn (Population)  1$2,000$150,00020050022,100152,00020250532,200154,000210508\begin{array} { | c | c | c | c | c | } \hline 	ext { Year } & 	ext { Alta (Real GDP)  } & 	ext { Zorn (Real GDP)  } & 	ext { Alta (Population)  } & 	ext { Zorn (Population)  } \\hline 1 & \$ 2,000 & \$ 150,000 & 200 & 500 \\hline 2 & 2,100 & 152,000 & 202 & 505 \\hline 3 & 2,200 & 154,000 & 210 & 508 \\hline\end{array} Year 123​ Alta (Real GDP)  $2,0002,1002,200​ Zorn (Real GDP)  $150,000152,000154,000​ Alta (Population)  200202210​ Zorn (Population)  500505508​​  Refer to the table. Between years 1 and 2, real GDP grew by __________ percent in Alta.

Accepted Answer

A)   3
B)   4
C)   5
D)   10 E) A) and B)
F) A) and C)

Question 12

Strong property rights are important for modern economic growth because

Accepted Answer

A)   they allow governments to extract the gains from private citizens' investments.
B)   people are more likely to invest if they don't fear that others can take their returns on investment without compensation.
C)   they ensure an equitable distribution of income.
D)   business cycle ﬂuctuations will be smaller and less likely to disrupt investment patterns.E) A) and B)
F) A) and D)

Question 13

Between 1950 and 2018, U.S. real GDP per capita grew at an average annual rate of about

Accepted Answer

A)   5.5 percent.
B)   4.2 percent.
C)   3.2 percent.
D)   2.0 percent.E) A) and D)
F) B) and C)

Question 14

One major aspect of the socio-cultural-political environment of the United States which has generally been conducive to economic growth is the

Accepted Answer

A)   enforcement of contracts by the market.
B)   denial of the rights of property ownership.
C)   favorable attitude toward work and risk-taking.
D)   strict social regulation of production and progress.E) None of the above
F) B) and D)

Question 15

Refer to the graph. An increase in the economy's human capital would

Accepted Answer

A)   move the economy away from point A and toward point B.
B)   shift curve CD to AB.
C)   move the economy away from point B and toward point A.
D)   shift curve AB to CD.E) A) and B)
F) B) and C)

Question 16

(Consider This)  According to the Consider This box on patents and innovation, the cost for U.S. and European drug companies to research, patent, and safety-test a new drug is about

Accepted Answer

A)   $100 million.
B)   $750 million.
C)   $1 billion.
D)   $10 billion.E) A) and D)
F) None of the above

Question 17

Which of the following is not an argument made by proponents of economic growth?

Accepted Answer

A)   Growth is the basic means of improving living standards.
B)   It is easier to reduce poverty when the economy is growing than when it is not.
C)   There is a direct relationship between a growing real GDP and rising pollution.
D)   Growth provides an economic environment favorable to education and self-fulﬁllment.E) All of the above
F) A) and B)

Question 18

Between 1953 and 2018, rising labor productivity contributed more to U.S. economic growth than
did increases in inputs.

Accepted Answer

A) True 
 B)False

Question 19

For comparing changes in potential military strength and political preeminence, the most meaningful measure of economic growth would be changes in

Accepted Answer

A)   total nominal output.
B)   total real output.
C)   per capita output.
D)   per family output.E) A) and C)
F) A) and B)

Question 20

Modern economic growth since the 1820s has widened wealth and income disparities between
richer and poorer nations.

Accepted Answer

A) True 
 B)False

Exam 8: Economic Growth

Economies of scale refers to

Correct Answer
verified

Refer to the graph. An increase in an economy's labor productivity would

Correct Answer
verified

Since the 1950s, the U.S. average annual rate of growth of real GDP was higher than the average annual growth of real GDP per capita.

Correct Answer
verified

Modern economic growth since the 1820s has widened wealth and income disparities between richer and poorer nations.

Correct Answer
verified

Which of the following statements is true about productivity growth in the United States since the Great Recession?

Correct Answer
verified

Which of the following explanations is consistent with the decline in productivity growth that followed the Great Recession?

Correct Answer
verified

Between 1950 and 2018, U.S. real GDP per capita grew at an average annual rate of about

Correct Answer
verified

One major economic beneﬁt of global competition is

Correct Answer
verified

Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect

Correct Answer
verified

Refer to the graph. An increase in the economy's human capital would

Correct Answer
verified

(Consider This) According to the Consider This box on patents and innovation, the cost for U.S. and European drug companies to research, patent, and safety-test a new drug is about

Correct Answer
verified

Which of the following is not an argument made by proponents of economic growth?

Correct Answer
verified

The "rule of 70" is a formula for determining the approximate number of

Correct Answer
verified

For comparing changes in potential military strength and political preeminence, the most meaningful measure of economic growth would be changes in

Correct Answer
verified

The intense competition of free trade prevents the investment that generates economic growth.

Correct Answer
verified

Correct Answer
verified

Strong property rights are important for modern economic growth because

Correct Answer
verified

Correct Answer
verified

One major aspect of the socio-cultural-political environment of the United States which has generally been conducive to economic growth is the

Correct Answer
verified

Between 1953 and 2018, rising labor productivity contributed more to U.S. economic growth than did increases in inputs.

Correct Answer
verified

Exam 8: Economic Growth

Economies of scale refers to

Correct AnswerverifiedShow Answer

Refer to the graph. An increase in an economy's labor productivity would

Correct AnswerverifiedShow Answer

Since the 1950s, the U.S. average annual rate of growth of real GDP was higher than the average annual growth of real GDP per capita.

Correct AnswerverifiedShow Answer

Modern economic growth since the 1820s has widened wealth and income disparities between richer and poorer nations.

Correct AnswerverifiedShow Answer

Which of the following statements is true about productivity growth in the United States since the Great Recession?

Correct AnswerverifiedShow Answer

Which of the following explanations is consistent with the decline in productivity growth that followed the Great Recession?

Correct AnswerverifiedShow Answer

Between 1950 and 2018, U.S. real GDP per capita grew at an average annual rate of about

Correct AnswerverifiedShow Answer

One major economic beneﬁt of global competition is

Correct AnswerverifiedShow Answer

Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect

Correct AnswerverifiedShow Answer

Refer to the graph. An increase in the economy's human capital would

Correct AnswerverifiedShow Answer

(Consider This) According to the Consider This box on patents and innovation, the cost for U.S. and European drug companies to research, patent, and safety-test a new drug is about

Correct AnswerverifiedShow Answer

Which of the following is not an argument made by proponents of economic growth?

Correct AnswerverifiedShow Answer

The "rule of 70" is a formula for determining the approximate number of

Correct AnswerverifiedShow Answer

For comparing changes in potential military strength and political preeminence, the most meaningful measure of economic growth would be changes in

Correct AnswerverifiedShow Answer

The intense competition of free trade prevents the investment that generates economic growth.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Strong property rights are important for modern economic growth because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One major aspect of the socio-cultural-political environment of the United States which has generally been conducive to economic growth is the

Correct AnswerverifiedShow Answer

Between 1953 and 2018, rising labor productivity contributed more to U.S. economic growth than did increases in inputs.

Correct AnswerverifiedShow Answer

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