1. A key statistic to measure economic growth is:
B) real GDP per capita.
2. Which of the following is an important measure of economic growth over time?
B) increases in real per capita GDP
3. A key measure used to track economic growth is:
A) real GDP per capita.
4. Real GDP per capita in the United States increased almost ______ between 1900 and 2010.
C) eightfold.
5. A typical family in the United States in 1900 had a purchasing power equal to _____ of the real U.S. GDP per capita in 2010.
B) 13%
6. U.S. real GDP per capita in 2010 was _____ as much per person as in 1900.
D) 758%
7. The rule of 70 indicates that a 6% annual increase in the potential level of real GDP would lead to the potential output doubling in _______ years.
B) 12
8. The Rule of 70 applies:
C) to any growth rate.
9. Of the countries listed, the country with the lowest growth rate of real GDP per capita between 1980 and 2010 was:
D) Zimbabwe.
10. Nation A's real GDP increased from $100 billion to $106 billion between 2010 and 2011. Nation A's population grew from 50 million to 51 million between 2010 and 2011. As a result:
B) real GDP per capita increased because the real GDP increased at a faster rate than the population.
11. Which of the following changes would contribute to a nation's rapid long-run economic growth?
A) faster technological progress
12. Productivity is equal to:
A) real GDP divided by the number of workers.
13. The term human capital describes:
C) improvement in a worker's skills made possible by education, training and knowledge.
14. Human capital is:
A) the improvement in labor created by education and knowledge that is embodied in the workforce.
15. Which of the following will NOT increase the productivity of labor?
D) an increase in the size of the labor force
16. The improvement in labor created by education and knowledge that is embodied in the work force is known as:
B) human capital.
17. All of the following are factors that drive productivity growth EXCEPT:
A) growth convergence.
18. Rising high school graduation rates are an example of an increase in:
B) human capital.
19. All of the following are reasons the average worker in the United States today produces more than her or his counterpart a century ago EXCEPT that:
D) the modern worker works longer hours.
20. If technology advances, then:
A) more output can be obtained from the same inputs.
21. An example of human capital is:
B) the job skills a person has.
22. Which sector is responsible for most of the growth that took place in the United States during the 1990s?
D) the retail sector
23. Which of the following would NOT qualify as physical capital?
D) mineral deposits
24. Diminishing returns to physical capital implies that when the human capital per worker and the state of technology remain fixed, each successive increase in physical capital leads to:
A) a smaller increase in productivity.
25. An increase in the amount of physical capital per worker _________, while technological progress ________.
C) moves the economy along the aggregate production function; shifts up the aggregate production function
26. Which of the following accurately describes what is happening along a typical aggregate production function?
C) Due to diminishing returns, increasing the amount of physical capital per worker will eventually bring smaller and smaller increases in productivity.
27. An increase in capital stock would:
D) cause a movement to the right along a stationary production function.
28. Which of the following countries would NOT be characterized by abundant farmland and mineral deposits?
D) Japan
29. In 1798, the English economist Thomas Malthus predicted that:
D) rising population growth would cause productivity to fall.
30. Many economists agree that environmental damage from economic growth:
B) occurs but can be contained with market-based incentives and concerted government action.
31. One of the most important types of infrastructure that a government can provide is:
B) basic health measures such as a clean water supply and disease control.
32. Diminishing returns to physical capital suggests that:
A) at some point, increasing the amount of physical capital per worker is not worth the cost of the additional amount of capital.
33. Historically, one finds that the development of a new technology often:
B) leads to increases in productivity only once firms learn how to effectively use the new technology.