Chapter 18- Economic Growth

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Suppose that average labor productivity in Country C is $6,000, and that Countries C and A have the same real GDP per capita. Based on the information in the table, what must be the average labor productivity in Country A?

$5,000

Usually an abundance of natural resources ______ average labor productivity.

Increases

A government policy to build bridges and dams is an example of a policy to promote economic growth by:

Increasing physical capital.

In order to increase the capital stock, society must divert ______ that could be otherwise used to increase the supply of _____.

Resources; consumer goods

One factor that contributed to the growth in the share of population employed in the United States between 1960 and 2008 was increased:

Female labor force participation

The biggest barrier to growth for many of the poorest countries in the world is the need for:

Improved legal and political framework

Government policies that increase the long-term economic growth rate by a small amount result in ______ in average living standards.

Large increases

Over the period from 1870 to 2008, the growth of real GDP per capita tended to be more rapid between _____, particularly for _____.

1950-2008; Japan

Real GDP per person in Richland is $20,000, while real GDP per person in Poorland is $10,000. However, Richland's real GDP per person is growing at 1 percent per year, and Poorland's real GDP per person is growing at 3 percent per year. After 50 years, real GDP per person in Richland minus real GDP in Poorland is:

Negative

Each of the following increases average labor productivity EXCEPT:

More central planning

In Macroland, 500,000 of the 1 million people in the country are employed. Average labor productivity in Macroland is $20,000 per worker. Real GDP per person in Macroland totals:

$10,000

The absence of which of the following leads to constant shortages and shoddy goods under communism?

Free markets

In order to promote growth through increased quantities of physical capital, governments must promote:

High rates of saving and investing

To increase future living standards by pursuing higher current rates of investment spending, an economy must:

Reduce current rates of consumption spending.

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