Question 1

Three workers run a house painting business and always work the same number of hours together. The paint they use requires applying two coats. Each worker paints 200 square feet per hour using a roller or 80 square feet per hour using a brush. If a technological advance provides a paint that only requires one coat, their average labor productivity per hour as a team:

Accepted Answer

A)   increases.
B)   decreases.
C)   remains the same.
D)   may either increase or decrease.E) B) and D)
F) None of the above

Question 2

Arguing that economic growth will eventually stop because we will run out of natural resources:

Accepted Answer

A)   must be correct because scarcity exists.
B)   will only be correct if growth takes the form of newer, more efficient goods and services.
C)   ignores the power of markets to recognize shortages and induce changes in behavior.
D)   is supported today by the fact that richer countries have fewer natural resources.E) C) and D)
F) All of the above

Question 3

Countries with small amounts of capital per worker tend to have ______ levels of real GDP per person and ______ levels of average labor productivity.

Accepted Answer

A)   high; high
B)   high; low
C)   low; low
D)   low; averageE) C) and D)
F) A) and B)

Question 4

Sharing the results of applied research conducted under government sponsorship with the private sector, such as the development of the Global Positioning System (GPS) , is an example of a government policy to promote economic growth by:

Accepted Answer

A)   increasing human capital.
B)   increasing physical capital.
C)   improving technology.
D)   increasing the availability of natural resources.E) C) and D)
F) A) and C)

Question 5

If average labor productivity in two countries is the same, average living standards will be higher in the country with:

Accepted Answer

A)   the smaller population.
B)   the larger population.
C)   the higher share of population employed
D)   the lower share of population employed.E) A) and D)
F) B) and C)

Question 6

The rise in average living standards experienced by most industrialized countries:

Accepted Answer

A)   has been continuous over the course of human history.
B)   was more rapid before 1870 than after 1870.
C)   has been more rapid since 1950 than before 1950.
D)   has resulted primarily from an increase in population worldwide.E) All of the above
F) B) and D)

Question 7

Over the period from 1870 to 2010, the growth of real GDP per capita tended to be more rapid between _____, particularly for _____.

Accepted Answer

A)   1870-1950; Japan
B)   1870-1950; the United States
C)   1870-1950; Canada
D)   1950-2010; JapanE) A) and D)
F) None of the above

Question 8

The payment of interest not only on the original deposit, but on all previously accumulated interest is called::

Accepted Answer

A)   the nominal interest rate.
B)   simple interest.
C)   compound interest.
D)   conflict of interest.E) A) and C)
F) B) and C)

Question 9

Economic growth may face environmental limits because:

Accepted Answer

A)   economic growth can take the form of new, different, and "cleaner" goods and services.
B)   economic growth may lead to less, not more, pollution.
C)   the market mechanism mobilizes resources to deal with shortages.
D)   global environmental problems are not handled by markets or national governments.E) None of the above
F) A) and D)

Question 10

The long-run average annual growth of real GDP per person is the United States is approximately ______ percent.

Accepted Answer

A)   one
B)   two
C)   five
D)   sevenE) B) and D)
F) B) and C)

Question 11

The growth of real GDP per person in the United States between 1960 and 2013 was the result of:

Accepted Answer

A)   growth in average labor productivity only.
B)   growth in the share of population employed only.
C)   growth in both average labor productivity and the share of population employed.
D)   neither the growth in average labor productivity nor the share of population employed.E) A) and B)
F) B) and D)

Question 12

The average annual growth rates of labor productivity from 1948 to 1973 were ______ the average rates over the period from 1973 to 1995.

Accepted Answer

A)   more rapid than
B)   slower than
C)   about the same as
D)   more rapid in the U.S., but slower in other industrialized countries thanE) B) and D)
F) B) and C)

Question 13

An example of a government policy to provide a framework within which the private sector can operate productively is:

Accepted Answer

A)   the taxation of savings.
B)   the suppression of political dissent.
C)   maintaining a well-functioning legal system.
D)   government ownership of capital.E) A) and D)
F) A) and C)

Question 14

An example of a government policy to increase human capital formation is:

Accepted Answer

A)   the construction of an interstate highway system.
B)   the provision of publicly-funded education.
C)   government support for basic research.
D)   maintaining a well-functioning legal system.E) A) and C)
F) A) and D)

Question 15

Alpha has $40,000 of capital per worker, while Beta has $5,000 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will increase output ______ in Alpha compared to Beta, holding other factors constant.

Accepted Answer

A)   more
B)   less
C)   not at all
D)   by the same amountE) A) and B)
F) A) and C)

Question 16

If you left $2,500 on deposit with a bank promising to pay you a 5 percent compound annual rate of interest, then after 50 years your deposit would be worth approximately:

Accepted Answer

A)   $2,625
B)   $250,750
C)   $11,467
D)   $28,668E) A) and D)
F) A) and B)

Question 17

Average labor productivity is determined by:

Accepted Answer

A)   consumption, investment, government spending, and net exports.
B)   the number employed, unemployed, and the labor force participation rate.
C)   the quantity and quality of human capital, physical capital, technology, natural resources, entrepreneurship, and the legal and political environment.
D)   the real interest rate, the nominal interest rate, and the rate of inflation.E) B) and D)
F) B) and C)

Question 18

Compared to the level of real GDP per person in 1870, by 2010, real GDP in the U.S was ______ times larger, while real GDP per person in Japan was _______.

Accepted Answer

A)   12; smaller
B)   12; 12 times larger
C)   12; 30 times larger
D)   30; 12 times largerE) B) and D)
F) C) and D)

Question 19

A government policy of providing free public education is an example of a policy to promote economic growth by:

Accepted Answer

A)   increasing human capital.
B)   increasing physical capital.
C)   improving technology.
D)   increasing the availability of natural resources.E) C) and D)
F) None of the above

Question 20

Workers should invest in additional human capital as long as the:

Accepted Answer

A)   marginal benefit exceeds the marginal cost.
B)   marginal cost exceeds the marginal benefit.
C)   opportunity cost exceeds the marginal benefit.
D)   opportunity cost is zero.E) A) and B)
F) A) and C)

Exam 6: Economic Growth, Productivity, and Living Standards

Sharing the results of applied research conducted under government sponsorship with the private sector, such as the development of the Global Positioning System (GPS) , is an example of a government policy to promote economic growth by:

Correct Answer
verified

The long-run average annual growth of real GDP per person is the United States is approximately ______ percent.

Correct Answer
verified

Economic growth may face environmental limits because:

Correct Answer
verified

Correct Answer
verified

A government policy of providing free public education is an example of a policy to promote economic growth by:

Correct Answer
verified

Correct Answer
verified

Arguing that economic growth will eventually stop because we will run out of natural resources:

Correct Answer
verified

If average labor productivity in two countries is the same, average living standards will be higher in the country with:

Correct Answer
verified

The average annual growth rates of labor productivity from 1948 to 1973 were ______ the average rates over the period from 1973 to 1995.

Correct Answer
verified

Compared to the level of real GDP per person in 1870, by 2010, real GDP in the U.S was times larger, while real GDP per person in Japan was _.

Correct Answer
verified

Workers should invest in additional human capital as long as the:

Correct Answer
verified

Average labor productivity is determined by:

Correct Answer
verified

If you left $2,500 on deposit with a bank promising to pay you a 5 percent compound annual rate of interest, then after 50 years your deposit would be worth approximately:

Correct Answer
verified

Countries with small amounts of capital per worker tend to have levels of real GDP per person and levels of average labor productivity.

Correct Answer
verified

The rise in average living standards experienced by most industrialized countries:

Correct Answer
verified

An example of a government policy to provide a framework within which the private sector can operate productively is:

Correct Answer
verified

The growth of real GDP per person in the United States between 1960 and 2013 was the result of:

Correct Answer
verified

The payment of interest not only on the original deposit, but on all previously accumulated interest is called::

Correct Answer
verified

Over the period from 1870 to 2010, the growth of real GDP per capita tended to be more rapid between _, particularly for _.

Correct Answer
verified

An example of a government policy to increase human capital formation is:

Correct Answer
verified

Exam 6: Economic Growth, Productivity, and Living Standards

Sharing the results of applied research conducted under government sponsorship with the private sector, such as the development of the Global Positioning System (GPS) , is an example of a government policy to promote economic growth by:

Correct AnswerverifiedShow Answer

The long-run average annual growth of real GDP per person is the United States is approximately ______ percent.

Correct AnswerverifiedShow Answer

Economic growth may face environmental limits because:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A government policy of providing free public education is an example of a policy to promote economic growth by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Arguing that economic growth will eventually stop because we will run out of natural resources:

Correct AnswerverifiedShow Answer

If average labor productivity in two countries is the same, average living standards will be higher in the country with:

Correct AnswerverifiedShow Answer

The average annual growth rates of labor productivity from 1948 to 1973 were ______ the average rates over the period from 1973 to 1995.

Correct AnswerverifiedShow Answer

Compared to the level of real GDP per person in 1870, by 2010, real GDP in the U.S was ______ times larger, while real GDP per person in Japan was _______.

Correct AnswerverifiedShow Answer

Workers should invest in additional human capital as long as the:

Correct AnswerverifiedShow Answer

Average labor productivity is determined by:

Correct AnswerverifiedShow Answer

If you left $2,500 on deposit with a bank promising to pay you a 5 percent compound annual rate of interest, then after 50 years your deposit would be worth approximately:

Correct AnswerverifiedShow Answer

Countries with small amounts of capital per worker tend to have ______ levels of real GDP per person and ______ levels of average labor productivity.

Correct AnswerverifiedShow Answer

The rise in average living standards experienced by most industrialized countries:

Correct AnswerverifiedShow Answer

An example of a government policy to provide a framework within which the private sector can operate productively is:

Correct AnswerverifiedShow Answer

The growth of real GDP per person in the United States between 1960 and 2013 was the result of:

Correct AnswerverifiedShow Answer

The payment of interest not only on the original deposit, but on all previously accumulated interest is called::

Correct AnswerverifiedShow Answer

Over the period from 1870 to 2010, the growth of real GDP per capita tended to be more rapid between _____, particularly for _____.

Correct AnswerverifiedShow Answer

An example of a government policy to increase human capital formation is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Compared to the level of real GDP per person in 1870, by 2010, real GDP in the U.S was times larger, while real GDP per person in Japan was _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Countries with small amounts of capital per worker tend to have levels of real GDP per person and levels of average labor productivity.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Over the period from 1870 to 2010, the growth of real GDP per capita tended to be more rapid between _, particularly for _.

Correct Answer
verified

Correct Answer
verified