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Questions for chapter 25 of Macro Economics

The vast differences in worldwide living standards owes primarily to:

different starting dates for modern economic growth.

In the U.S. since 1960:

the average educational level has increased but the relative quality of education has declined.

Total real output can be determined by:

multiplying total hours of work times labor productivity.

If real GDP was $5,000 billion last year and is $5,200 billion this year, the approximate rate of economic growth over the past year is:

4%.

All of the following are reasons for the productivity acceleration of 1995-2007, except:

a higher rate of personal saving.

Among the institutional structures that promote economic growth, most economists would include:

wide-spread education, free trade, and strong property rights.

Which of the following sources of economic growth is a demand-side factor?

Higher spending on rising output

If an economy's production possibilities curve has shifted out, we can unambiguously conclude that:

potential GDP increased.

If a nation's real GDP is growing at 2% per year, its real output will double in approximately:

35 years.

Suppose an economy moves from a point inside of its production possibilities curve to a point on the curve. The most likely source of this economic growth is:

demand and efficiency factors.

Other things equal, which of the following would increase labor productivity the most?

the increase in the stock of real capital exceeds the increase in inputs of labor

Use the list below to answer the following questions:
1. Improvements in technology
2. Increases in the supply (stock) of capital goods
3. Purchases of expanding output
4. Obtaining the optimal combination of goods, each at least-cost production
5. Increases in the quantity and quality of natural resources
6. Increases in the quantity and quality of human resources

Refer to the above list. As distinct from the supply factors and efficiency factor of economic growth, the demand factor(s) of economic growth is (are):

3 only.

Real GDP per capita in the United States (as of 2007) exceeds that of France primarily because:

the United States has a higher percentage of the working-age population in the labor force and because U.S. employees average about 20 percent more hours worked per year.

Suppose that an economy's labor productivity and total worker-hours each grew by 4 percent between year 1 and year 2. We could conclude that this economy's:

production possibilities curve shifted outward.

(Last Word) Growth of real per capita income and China has largely resulted from:

increased use of technology and improved technology.

Increases in the value of a product to each user, including existing users, as the total number of users rises are called:

network effects.

Economies of scale refer to:

the fact that large producers may be able to use more efficient technologies than smaller producers.

Use the list below to answer the following questions:
1. Improvements in technology
2. Increases in the supply (stock) of capital goods
3. Purchases of expanding output
4. Obtaining the optimal combination of goods, each at least-cost production
5. Increases in the quantity and quality of natural resources
6. Increases in the quantity and quality of human resources

Refer to the above list. As distinct from the demand and efficiency factors of economic growth, the supply factors of economic growth are:

1, 2, 5, and 6 only.

Proponents of economic growth claim that growth leads to greater equality of income in an economy.

False

If the growth trend of labor productivity is 3 percent per year, the number of years that it will take for the standard of living to double will be about:

23 years.

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

True

Empirical studies suggest that:

technological advances account for about 40 percent of U.S. productivity growth.

Suppose that an economy's labor productivity and total worker-hours each grew by 3 percent between year 1 and year 2. We could conclude that this economy's:

production possibilities curve shifted outward.

Modern economic growth is defined as increases in real GDP over time.

False

Which of the following statements is correct?

Between 1953 and 2009, increases in labor productivity account for more of the growth in U.S. real GDP than do increases in the quantity of labor.

Between 1950 and 2009, U.S. real GDP grew at an average annual rate of about:

3.2 percent.

Which of the following would not be expected to increase labor productivity?

an increase in the size of the labor force

Proponents of economic growth say that pollution:

occurs, not because of growth, but because common resources are treated as free goods.

A competitive market system:

encourages growth by allowing producers to make profitable investment decisions based on market signals.

(Last Word) Over the past twenty-five years, China has averaged annual growth rates of nearly:

9 percent.

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