Deck 9: Growth

Question 1

The real GDP per capita is real GDP divided by the number of workers in a country.

Answer 1

False
Explanation: The real GDP per capita is real GDP divided by the number of people in a country.

Question 2

Growth on a year-to-year basis is called long-term growth.

Answer 2

False
Explanation: Growth on a year-to-year basis is called short-term growth.

Question 3

If there is moderate growth,we have a zero-sum economy.

Answer 3

False
Explanation: If there is no growth, we have a zero-sum economy.

Question 4

Economic growth generally leads to

A) inflation.
B) deflation.
C) disinflation.
D) higher living standards.

Question 5

The skill level of workers is called human production.

Question 6

A growing economy is non-zero-sum.

Question 7

The production possibility frontier represents all the combinations of different goods and services that the economy is capable of producing at a given time.

Question 8

The United States has fewer workers than China but has a bigger economy because

A) the United States has more land resources.
B) the United States has a larger labor pool.
C) the United States has a higher growth rate.
D) the United States has more productive workers on average.

Question 9

What is one negative effect of growth?

A) Falling food prices increase food consumption, leading to obesity.
B) Cleaner air.
C) More healthful foods.
D) Advances in medicine.

Question 10

An economy experiences growth if it produces more goods and services than it did the year before.

Question 11

The inputs used in the aggregate production function do not include which of the following?

A) Education and skill levels.
B) Knowledge.
C) Average price levels.
D) The number of workers in a country.

Question 12

In 2007,Google spent more than $2 billion on property and equipment.This is called

A) intermediate inputs.
B) aggregate production investment.
C) investment in physical capital.
D) aggregate investment.

Question 13

One essential force in the growth of human capital over the past several decades has been

A) The growth of Social Security.
B) The community college system.
C) The growth of Medicare.
D) The growth of Medicaid.

Question 14

The real growth rate is determined by

A) the BEA adjusting the GDP for inflation.
B) the BEA using nominal rates to reflect the GDP.
C) the BLS adjusting the GDP per capita for inflation.
D) the BLS calculating price level changes and population changes.

Question 15

Food production over the past 50 years has increased,partially due to

A) Better seeds.
B) More farm workers.
C) Lower inflation rates.
D) Lower interest rates.

Question 16

Investment in physical capital means

A) hiring more employees.
B) purchasing equipment and buildings.
C) purchasing supplies.
D) taking out loans.

Question 17

Output rises as workers become more educated and skilled.

Question 18

The aggregate production function takes inputs and turns them into the country's output,or GDP.

Question 19

Knowledge is human capital plus business know-how.

Question 20

Raw materials include which of the following?

A) Software.
B) Computer cases.
C) Oil.
D) Steel beams to build houses.

Question 21

Which does an expanding economy NOT do?

A) Free up resources for the public sector.
B) Boost living standards for the poor.
C) Create a lower real GDP.
D) Allow the middle class to enjoy more luxuries.

Question 22

The education and skills of workers are factors driving

A) economic inflation.
B) productivity functions.
C) economic growth.
D) inflationary growth.

Question 23

An increase in living standards is measured by which of the following?

A) The number of workers employed.
B) The number of televisions in a household.
C) The increase in GDP.
D) The increase in real GDP per capita.

Question 24

Long-term growth is measured by

A) looking at real GDP over at least 5 or 10 years.
B) looking at real GDP over at least one year.
C) looking at per capita GDP over at least one year.
D) looking at GDP compared to real GDP.

Question 25

The production possibility frontier represents

A) the different possible combinations of output.
B) the shifting of priorities to meet demand.
C) the ability of the GDP to grow relative to other countries' GDPs.
D) demand tempered by inflation.

Question 26

Which of the following is NOT an example of an increased standard of living?

A) Lower life expectancy.
B) Indoor plumbing.
C) Medical advances.
D) Telephones in every home.

Question 27

What would NOT be one of the reasons for a much lower real GDP in 1905,compared with 2007?

A) Productive capability in 1905 was lower than in 2007.
B) Fewer goods and services were available in 1905 than in 2007.
C) On average, there were fewer poor people in 1905 than in 2007.
D) Automobiles were rare in 1905, but common in 2007.

Question 28

GDP and real GDP are ways to measure

A) inflation.
B) disinflation.
C) economic output.
D) market equilibrium.

Question 29

Which of the following is a potential downside of economic growth?

A) People may become too happy.
B) If the economy grows too quickly, standards of living may rise too quickly for people to notice.
C) Economic growth tends to lead to more and more government corruption.
D) It is possible that economic growth can have a negative impact on the environment.

Question 30

Which of the following would cause an increase in human capital?

A) An increase in the number of college students.
B) An increase in the sale of Microsoft Windows.
C) A machine purchased to cook burgers automatically.
D) The purchase of an airplane.

Question 31

Productivity growth is usually an indicator of

A) the possibility of inflation.
B) the possibility of deflation.
C) the decline in the health and prosperity of the economy.
D) the increase in the health and prosperity of the economy.

Question 32

The GDP does not include things such as

A) economic growth.
B) productivity.
C) global warming's impact on the economy.
D) goods and services.

Question 33

Identifying real GDP growth requires

A) measuring all the items that go into the GDP, and then adjusting for inflation.
B) measuring the CPI after adjusting for inflation.
C) measuring the GDP with current-year prices.
D) estimating the GDP based on unadjusted price levels.

Question 34

In the past 50 years,the economy of the United States grew,causing

A) a higher standard of living for most citizens.
B) a higher standard of living for the employed.
C) a stagnant standard of living after adjusting for inflation.
D) a lower standard of living after adjusting for inflation.

Question 35

Using the aggregate production function,when inputs increase,

A) inflation occurs.
B) disinflation occurs.
C) the economy grows.
D) the GDP declines.

Question 36

Without economic growth,

A) we would have a zero-sum economy.
B) we would have a non-zero-sum economy.
C) standards of living would rise only as the population increased.
D) the production possibility curve would shift outward.

Question 37

A growing economy can result in

A) fewer newborn deaths.
B) less access to communication technology.
C) a higher incidence of malnutrition.
D) less government corruption.

Question 38

On the PPF,if you have two products,health care and housing,what typically would occur in a stagnant economy if health care output increased?

A) Housing would increase.
B) Housing would decrease.
C) Health care and housing would balance out.
D) Deflation would occur.

Question 39

In a growing economy,__________ enjoy a rising standard of living.

A) both rich and poor
B) only the poor
C) only the rich
D) neither the rich nor the poor

Question 40

To measure the growth of the average standard of living over time,we

A) look at the aggregate production function.
B) look at the growth in human capital.
C) look at the change in real GDP per capita.
D) measure and compare inflation rates.

Question 41

GDP growth on a year-to-year basis is called

A) nominal growth.
B) real growth.
C) short-term growth.
D) long-term growth.

Question 42

The economy is growing if and only if

A) GDP is rising.
B) The average price level is rising.
C) Real GDP is rising.
D) GDP per capita is rising.

Question 43

$$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Year } & \begin{array} { l } \text { Real GDP (in } \\\text { Billions of 2005 } \\\text { Dollars) }\end{array} & \begin{array} { l } \text { Population (in } \\\text { Millions of } \\\text { People) }\end{array} \\\hline 1999 & \$ 10,780 & 279.3 \\\hline 2000 & \$ 11,226 & 282.4 \\\hline\end{array}\\\text { Table } 9.1\end{array}$$ Refer to Table 9.1.What was the growth rate of real GDP per capita from 1999 to 2000?

A) 3.00%.
B) 2.91%.
C) 0.03%.
D) 11.56%.

Question 44

The era of rapid productivity growth known as the "Golden Age" came to an end in

A) 2010.
B) 1995.
C) 1947.
D)

Question 45

$$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Year } & \begin{array} { l } \text { Real GDP (in } \\\text { Billions of 2005 } \\\text { Dollars) }\end{array} & \begin{array} { l } \text { Population (in } \\\text { Millions of } \\\text { People) }\end{array} \\\hline 1999 & \$ 10,780 & 279.3 \\\hline 2000 & \$ 11,226 & 282.4 \\\hline\end{array}\\\text { Table } 9.1\end{array}$$ Refer to Table 9.1.What was real GDP per capita in 2000?

A) $40,193.
B) $38,173.
C) $38,596.
D) $39,752.

Question 46

$$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Year } & \begin{array} { l } \text { Real GDP (in } \\\text { Billions of 2005 } \\\text { Dollars) }\end{array} & \begin{array} { l } \text { Population (in } \\\text { Millions of } \\\text { People) }\end{array} \\\hline 1999 & \$ 10,780 & 279.3 \\\hline 2000 & \$ 11,226 & 282.4 \\\hline\end{array}\\\text { Table } 9.1\end{array}$$ Refer to Table 9.1.What was the growth rate of the population between 1999 and 2000?

A) 4.1%.
B) 1.1%.
C) 2.5%.
D) 3.1%.

Question 47

Economic growth is driven by several factors,including

A) government investment in welfare.
B) a progressive tax on income.
C) education and skill levels of workers.
D) Social Security.

Question 48

$$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Year } & \begin{array} { l } \text { Real GDP (in } \\\text { Billions of 2005 } \\\text { Dollars) }\end{array} & \begin{array} { l } \text { Population (in } \\\text { Millions of } \\\text { People) }\end{array} \\\hline 1999 & \$ 10,780 & 279.3 \\\hline 2000 & \$ 11,226 & 282.4 \\\hline\end{array}\\\text { Table } 9.1\end{array}$$ Refer to Table 9.1.What was real GDP per capita in 1999?

A) $40,193.
B) $38,173.
C) $38,596.
D) $39,752.

Question 49

Real GDP is usually measured in

A) 2005 dollars.
B) Units of output.
C) 1982-1984 dollars.
D) Tons (for goods) and hours (for services).

Question 50

Around 1995,businesses really started

A) further declines in productivity.
B) using computers to increase worker productivity.
C) a stagnant period of productivity.
D) the information age, which caused productivity slowdowns.

Question 51

$$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Year } & \begin{array} { l } \text { Real GDP (in } \\\text { Billions of 2005 } \\\text { Dollars) }\end{array} & \begin{array} { l } \text { Population (in } \\\text { Millions of } \\\text { People) }\end{array} \\\hline 1999 & \$ 10,780 & 279.3 \\\hline 2000 & \$ 11,226 & 282.4 \\\hline\end{array}\\\text { Table } 9.1\end{array}$$ Refer to Table 9.1.What was the growth rate of real GDP between 1999 and 2000?

A) 4.1%.
B) 1.1%.
C) 3.0%.
D) 2.6%.

Question 52

Standards of living are measured by

A) nominal GDP per capita.
B) real GDP per capita.
C) inflation.
D) deflation.

Question 53

The golden age of prosperity for productivity in the United States was from World War II to 1973,when productivity rose at an average rate of _____ per year.

A) 2.8%
B) 2.1%
C) 5.0%
D) 1.4%

Question 54

In 2006,the U.S.labor force was approximately

A) 133.9 million.
B) 151.4 million.
C) 299.4 million.
D) 12,976 million.

Question 55

Productivity is a key concept for measuring

A) aggregate production function.
B) the health and prosperity of an economy.
C) average inflation rates.
D) employment levels.

Question 56

GDP that is not reported as real GDP is

A) the actual GDP for that year, unadjusted for inflation.
B) the actual GDP for that year, adjusted for inflation.
C) an average of GDPs over a period of time, adjusted for inflation.
D) an average of GDPs over a period of time, unadjusted for inflation.

Question 57

How did the information revolution that kicked in during the late 1990s increase productivity?

A) Businesses learned how to use foreign suppliers to cut costs.
B) Businesses learned how to use computers to produce more output with fewer workers.
C) Businesses began using the Internet to provide online training for workers.
D) Businesses were able to sell in larger markets through their websites.

Question 58

The growth rate of GDP in 2005 was 6.5%,but the growth rate of real GDP was 3.1%.Based on these facts alone,we can conclude that

A) The government increased its spending in 2005.
B) The average price level was rising in 2005.
C) The economy experienced disinflation in 2005.
D) GDP per capita rose in 2005.

Question 59

A zero-sum economy means that there is

A) excessive growth after adjusting for inflation rates.
B) no growth of the economy.
C) moderate growth of the economy.
D) real GDP growth.

Question 60

Human capital is also known as

A) education and skill levels.
B) wages employees receive.
C) the cost of labor.
D) the cost of collective bargaining.

Question 61

What could low productivity growth in a country suggest?

Question 62

As of 2009,__________ of U.S.adults aged 25-29 had at least a bachelor's degree.

A) 8.2%
B) 13%
C) 30.6%
D) just over 50%

Question 63

What inputs are included in the aggregate production function,and what is the economic impact of those inputs?

Question 64

What is the purpose of the productivity number reported by the Bureau of Labor Statistics,and what does it not include?

Question 65

Most economists favor less interference in the marketplace by government because

A) economists ignore the positive impact of government because they focus only on GDP.
B) the government is too corrupt.
C) they believe that corporations and individuals are in a better position to know which investments are most likely to pay off.
D) economists have a lot of money invested in the stock market, and they don't want the government to spoil their investments.

Question 66

Which two things happened more or less simultaneously to bring an end to the era of low productivity growth that lasted from 1973 to 1995?

A) The information revolution and the creation of the Environmental Protection Agency.
B) The entry of the baby boom generation into the workforce and a great expansion of globalization.
C) The information revolution and a great expansion of globalization.
D) The entry of the baby boom generation into the workforce and the creation of the Environmental Protection Agency.

Question 67

What is the economic definition of productivity?

Question 68

How did a great expansion of globalization in the late 1990s increase productivity?

A) Businesses learned how to use foreign suppliers to cut costs.
B) Businesses learned how to use computers to produce more output with fewer workers.
C) Businesses began sending workers overseas for more training.
D) Businesses were able to sell in larger markets as tariffs and import quotas were reduced.

Question 69

Which of the following is NOT an example of a way that the government interferes in the economy?

A) The government requires everyone to get an elementary and high school education.
B) Local governments impose building codes on newly constructed office buildings or factories.
C) The government sets laws and rules for how mortgages are issued.
D) The government tells Intel what kind of microprocessor chips to make.

Question 70

Besides a growing workforce,how can a country boost its aggregate production?