Question 1

Why is economic growth measured as the change in real per capita GDP rather than the change in nominal per capita GDP?

Accepted Answer

Because standards of living do...

Question 2

An increase in population

Accepted Answer

A)   always leads to economic growth.
B)   never leads to economic growth.
C)   can lead to economic growth.
D)   cannot lead to economic growth.E) B) and C)
F) A) and D)

Question 3

What is the definition of labor productivity?

Accepted Answer

The amount of output...

Question 4

Small changes in the rate of economic growth add up to big differences in the standard of living over time because of _________ .

Accepted Answer

The answer of Small changes in the rate of economic...

Question 5

Improvements in the quality of the labor force will enhance economic growth.

Accepted Answer

A) True 
 B)False

Question 6

Research and development provides gains for those who discover new processes or create new inventions, but not for the economy as a whole.

Accepted Answer

A) True 
 B)False

Question 7

The process of transforming an invention into something that benefits the economy is known
as _________.

Accepted Answer

The answer of The process of transforming an invention into...

Question 8

A 1% change in the annual growth rate of a country has

Accepted Answer

A)   very little impact on the economy of a country.
B)   a large impact in the future due to compounding.
C)   a small impact in the current year, and smaller impact in the future because of compounding.
D)   a large impact on the economy in the current year, but not in the future.E) A) and B)
F) B) and C)

Question 9

What is nationalization?

Accepted Answer

The confiscation of ...

Question 10

Because of compounding, a small difference in the annual growth rate will amount to a _________ difference in standards of living over time.

Accepted Answer

The answer of Because of compounding, a small difference in...

Question 11

Technological innovation proceeds at its own pace and does not respond to incentives.

Accepted Answer

A) True 
 B)False

Question 12

Which one of the following is TRUE?

Accepted Answer

A)   In the U.S., research and development is funded both by private firms and by governments.
B)   The lack of well-defined property rights in the U.S. means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace
C)   The U.S. is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth
D)   Improvements in labor productivity over the past 50 years have created chronic unemployment in the U.S.E) A) and B)
F) A) and C)

Question 13

Well-defined _________ rights can lead to economic growth because they provide an incentive to create wealth.

Accepted Answer

The answer of Well-defined _________ rights can lead to economic...

Question 14

The threat of _________ appears to discourage capital formation in developing countries as foreign-based businesses are reluctant to invest resources that might later be subject to confiscation by the domestic government.

Accepted Answer

The answer of The threat of _________ appears to discourage...

Question 15

Small differences in economic growth rates add up to big differences over time because of

Accepted Answer

A)   complacency.
B)   compacting.
C)   compromising.
D)   compounding.E) All of the above
F) B) and C)

Question 16

Economic growth arises from increases in the labor force, increases in the capital stock, or increases in the productivity of labor and capital.

Accepted Answer

A) True 
 B)False

Question 17

Saving is important for economic growth because it allows for _________ .

Accepted Answer

The answer of Saving is important for economic growth because...

Question 18

The rate of economic growth is measured as the rate of increase in real per capita GDP.

Accepted Answer

A) True 
 B)False

Question 19

Poorly defined property rights inhibit economic growth.

Accepted Answer

A) True 
 B)False

Question 20

Improvements in labor productivity allow a given number of _________ to produce a greater amount of output.

Accepted Answer

The answer of Improvements in labor productivity allow a given...

Exam 15: How Economies Grow

Improvements in labor productivity allow a given number of _________ to produce a greater amount of output.

Correct AnswerverifiedShow Answer

Technological innovation proceeds at its own pace and does not respond to incentives.

Correct AnswerverifiedShow Answer

Small changes in the rate of economic growth add up to big differences in the standard of living over time because of _________ .

Correct AnswerverifiedShow Answer

Improvements in the quality of the labor force will enhance economic growth.

Correct AnswerverifiedShow Answer

The process of transforming an invention into something that benefits the economy is known as _________.

Correct AnswerverifiedShow Answer

What is nationalization?

Correct AnswerverifiedThe confiscation of ...View AnswerShow Answer

Because of compounding, a small difference in the annual growth rate will amount to a _________ difference in standards of living over time.

Correct AnswerverifiedShow Answer

Small differences in economic growth rates add up to big differences over time because of

Correct AnswerverifiedShow Answer

What is the definition of labor productivity?

Correct AnswerverifiedThe amount of output...View AnswerShow Answer

Poorly defined property rights inhibit economic growth.

Correct AnswerverifiedShow Answer

Why is economic growth measured as the change in real per capita GDP rather than the change in nominal per capita GDP?

Correct AnswerverifiedBecause standards of living do...View AnswerShow Answer

Saving is important for economic growth because it allows for _________ .

Correct AnswerverifiedShow Answer

Economic growth arises from increases in the labor force, increases in the capital stock, or increases in the productivity of labor and capital.

Correct AnswerverifiedShow Answer

The rate of economic growth is measured as the rate of increase in real per capita GDP.

Correct AnswerverifiedShow Answer

A 1% change in the annual growth rate of a country has

Correct AnswerverifiedShow Answer

Well-defined _________ rights can lead to economic growth because they provide an incentive to create wealth.

Correct AnswerverifiedShow Answer

Which one of the following is TRUE?

Correct AnswerverifiedShow Answer

The threat of _________ appears to discourage capital formation in developing countries as foreign-based businesses are reluctant to invest resources that might later be subject to confiscation by the domestic government.

Correct AnswerverifiedShow Answer

Research and development provides gains for those who discover new processes or create new inventions, but not for the economy as a whole.

Correct AnswerverifiedShow Answer

An increase in population

Correct AnswerverifiedShow Answer

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The confiscation of ...
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The amount of output...
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Because standards of living do...
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