Question 1

Because of the recent rise in the average rate of productivity growth, the business cycle is dead.

Accepted Answer

A) True 
 B)False

Question 2

Simultaneous consumption and network effects are sources of increasing returns and economies of
scale that promote productivity growth.

Accepted Answer

A) True 
 B)False

Question 3

If 40,000 worker-hours produced a total output of $600,000 in an economy, then the labor productivity is

Accepted Answer

A)   $10/worker-hour.
B)   $15/worker-hour.
C)   $24/worker-hour.
D)   $240/worker-hour.E) None of the above
F) B) and C)

Question 4

In the modern economic growth process, it is typical to ﬁnd that

Accepted Answer

A)   leader countries continue to grow faster than follower countries.
B)   follower countries can grow faster than leader countries.
C)   large countries cannot grow faster than leader countries.
D)   the gap between the leader countries and the follower countries stays constant.E) C) and D)
F) None of the above

Question 5

One hypothesis for declining productivity growth rates since the Great Recession is that individuals
and ﬁrms have focused more on paying off debt than on making productive investments.

Accepted Answer

A) True 
 B)False

Question 6

All of the following are economic implications of the 1995-2010 rise in the average rate of productivity growth except

Accepted Answer

A)   a lower natural rate of unemployment.
B)   larger outward shifts of the economy's production possibilities curve.
C)   an end to the business cycle.
D)   a greater rate of economic growth.E) B) and D)
F) C) and D)

Question 7

(Last Word)  Factors that have contributed to the increase in women's labor-force participation rate in the U.S. include the following, except

Accepted Answer

A)   rising wage earnings brought about by rising productivity.
B)   better education and more professional training.
C)   access to a wider range of job opportunities.
D)   an increase in the number of children, requiring mothers to ﬁnd work along with fathers.E) C) and D)
F) None of the above

Question 8

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

Accepted Answer

A)   real GDP also increased by 4 percent.
B)   real GDP remained constant.
C)   production possibilities curve shifted outward.
D)   capital stock increased by 4 percent.E) A) and B)
F) A) and C)

Question 9

Which of the following is correct?

Accepted Answer

A)   Total output = labor productivity/worker-hours.
B)   Labor productivity = worker-hours/total output.
C)   Total output = worker-hours × labor productivity.
D)   Worker-hours = labor productivity × total output.E) A) and D)
F) C) and D)

Question 10

Name the six institutional structures listed in the text that promote and sustain modern economic
growth.

Accepted Answer

Strong property rights, patents and copy...

Question 11

The main cause for the vast differences in per capita GDP levels seen across the globe today is the

Accepted Answer

A)   huge differences in the natural-resource endowments of different countries.
B)   major differences in the population sizes of various societies.
C)   different starting dates of modern economic growth in different parts of the world.
D)   differences in religions that different societies around the world believe in.E) All of the above
F) A) and B)

Question 12

In 2008, living standards in the United States were nearly ______ times higher than those in Africa.

Accepted Answer

A)   3
B)   8
C)   10
D)   19E) A) and D)
F) A) and C)

Question 13

What percentage of the U.S. adult population has at least a high school education (as of 2018) ?

Accepted Answer

A)   31 percent
B)   41 percent
C)   90 percent
D)   99 percentE) C) and D)
F) A) and D)

Question 14

If an economy is currently producing on its production possibilities curve, a rightward shift of the
curve is a necessary but not suﬃcient condition for welfare-maximizing economic growth.

Accepted Answer

A) True 
 B)False

Question 15

Refer to the accompanying graph. If the production possibilities curve of an economy shifts from AB to CD, it is most likely caused by which of the following factors?

Accepted Answer

A)   a decrease in the price level
B)   allocative eﬃciency
C)   technological progress
D)   full employment of resourcesE) A) and B)
F) None of the above

Question 16

The factor accounting for the largest increase in the productivity of labor in the United States has been

Accepted Answer

A)   the education and training of workers.
B)   improved resource allocation.
C)   the quantity of capital.
D)   technological advance.E) None of the above
F) All of the above

Question 17

The percentage of the working-age population in the labor force (= employed + oﬃcially unemployed)  is called the

Accepted Answer

A)   labor force participation rate.
B)   employment-population ratio.
C)   work-activity rate.
D)   work-nonwork ratio.E) C) and D)
F) A) and B)

Question 18

What is meant by human capital and how can it be used to promote economic growth?

Accepted Answer

Human capital is the knowledge and skill...

Question 19

Sources of increasing returns that help raise productivity growth include the following, except

Accepted Answer

A)   more specialized inputs.
B)   the spreading of development costs.
C)   network effects.
D)   low unemployment.E) A) and D)
F) C) and D)

Question 20

Refer to the diagram. Realized economic growth is best represented by a

Accepted Answer

A)   move from Z to X along AB.
B)   move from X on AB to Y on CD.
C)   shift in the production possibilities curve from CD to AB.
D)   move from X to Z along AB.E) C) and D)
F) B) and C)

Exam 8: Economic Growth

Simultaneous consumption and network effects are sources of increasing returns and economies of scale that promote productivity growth.

Correct AnswerverifiedShow Answer

Because of the recent rise in the average rate of productivity growth, the business cycle is dead.

Correct AnswerverifiedShow Answer

Refer to the accompanying graph. If the production possibilities curve of an economy shifts from AB to CD, it is most likely caused by which of the following factors?

Correct AnswerverifiedShow Answer

The main cause for the vast differences in per capita GDP levels seen across the globe today is the

Correct AnswerverifiedShow Answer

Sources of increasing returns that help raise productivity growth include the following, except

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

In 2008, living standards in the United States were nearly ______ times higher than those in Africa.

Correct AnswerverifiedShow Answer

All of the following are economic implications of the 1995-2010 rise in the average rate of productivity growth except

Correct AnswerverifiedShow Answer

In the modern economic growth process, it is typical to ﬁnd that

Correct AnswerverifiedShow Answer

If an economy is currently producing on its production possibilities curve, a rightward shift of the curve is a necessary but not suﬃcient condition for welfare-maximizing economic growth.

Correct AnswerverifiedShow Answer

(Last Word) Factors that have contributed to the increase in women's labor-force participation rate in the U.S. include the following, except

Correct AnswerverifiedShow Answer

Name the six institutional structures listed in the text that promote and sustain modern economic growth.

Correct AnswerverifiedStrong property rights, patents and copy...View AnswerShow Answer

Refer to the diagram. Realized economic growth is best represented by a

Correct AnswerverifiedShow Answer

One hypothesis for declining productivity growth rates since the Great Recession is that individuals and ﬁrms have focused more on paying off debt than on making productive investments.

Correct AnswerverifiedShow Answer

The percentage of the working-age population in the labor force (= employed + oﬃcially unemployed) is called the

Correct AnswerverifiedShow Answer

If 40,000 worker-hours produced a total output of $600,000 in an economy, then the labor productivity is

Correct AnswerverifiedShow Answer

What is meant by human capital and how can it be used to promote economic growth?

Correct AnswerverifiedHuman capital is the knowledge and skill...View AnswerShow Answer

What percentage of the U.S. adult population has at least a high school education (as of 2018) ?

Correct AnswerverifiedShow Answer

The factor accounting for the largest increase in the productivity of labor in the United States has been

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Strong property rights, patents and copy...
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Human capital is the knowledge and skill...
View Answer

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