Macroeconomics Chapter 8

11 October 2022
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Real GDP per capita is found by
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Dividing real GDP by population
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Which of the following best measures improvements in the standard of living in a nation?
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Growth of real GDP per capita
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If a nation's real GDP increases from 100 billion to 106 billion & it's population jumps from 200 million to 212 million, its real GDP per capita will
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remain constant
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At an annual growth rate of 7%, real GDP will double in about:
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10 years
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If the economy's real GDP doubles in 18 years, we can:
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conclude that its average annual rate of growth is about 3.9%
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Economic growth rates in follower countries:
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tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs.
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Strong property rights are important for modern economic growth because
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people are more likely to invest if they don't fear that others can take their returns on investment without compensation.
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Which of the following institutional arrangements is most likely to promote growth?
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Unrestricted trade between nations
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A competitive market system:
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encourages growth by allowing producers to make profitable investment decisions based on market signals.
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Free trade:
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encourages growth by promoting the rapid spread of new inventions and innovations.
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Which of the following is not a supply factor in economic growth?
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Aggregate expenditures of households, businesses, & government.
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The achievement of full employment through time will:
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increase the realized rate of economic growth.
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Economic growth can be portrayed as:
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an outward shift of the production possibilites curve.
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Suppose that an economy's labor productivity & total worker-hours each grew by 4% between year 1 & year 2. We could conclude that this economy's:
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production possibilities curve shifted outward.
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Suppose that an economy's labor productivity fell by 3% & its total worker-hours remained constant between year 1 & year 2. We could conclude that this economy's:
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real GDP declined.
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Labor productivity is measured by:
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real output per worker hour.
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Labor productivity is defined as:
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total output/worker-hours
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If the number of worker-hours in an economy is 100 & its labor productivity is $5 of output per worker-hour, the economy's real GDP
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is $500.
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Suppose total output (real GDP) is $4,000 and labor productivity is $8. We can conclude that:
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the number of worker-hours must be 500.
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The largest contributor to increases in the proucitivity of American labor is:
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technological advance.
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Economies of scale refer to:
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the fact that large producers may be able to use more efficient technologies than smaller producers.
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Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect.
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labor productivity to rise.
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Human capital refers to
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the skills and knowledge that enable a worker to be productive.
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Proponents of economic growth say that pollution:
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occurs, not because of growth, but because common resources are treated as free goods.
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Critics of economic growth:
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argue that economic growth does not resolve socioeconomic problems such as an unequal distribution of income and wealth.
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Proponents of economic growth make all of the following arguments except:
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there is a direct relationship between a growing real GDP and rising population.