Question 1

If productivity growth equals 3.0 percent,the contribution from capital growth 1.2 percent and the contribution from labor growth 2.0 percent,then output growth must equal ________.
A)2.2 percent
B)4.2 percent
C)6.2 percent
D)7.2 percent

Accepted Answer

Output growth is the sum of productivity growth, capital growth, and labor growth. Therefore, output growth equals 3.0 + 1.2 + 2.0 = 6.2 percent. Therefore, the correct option is C.

Question 2

Figure 6.1 
-According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1996-2011 equalled ________.
A)0.3 percent
B)2.2 percent
C)30 percent
D)300 percent

Accepted Answer

The line in Figure 6.1 shows that the average annual growth rate of the U.S. economy during the period 1996-2011 is around 2.2 percent. Thus, the correct answer is B. Option A and C are too low and too high, respectively, while option D is not a plausible growth rate for any country or economy over such a period.

Question 3

In theory,differences in output across economies and over time might be the result of differences in either capital input,labor input,or productivity.The evidence points clearly to productivity as a more likely and powerful source of growth differences.Which aspects of the Solow growth model help to explain why the inputs of capital and labor contribute little to growth of output,relative to productivity?

Accepted Answer

The answer of In theory,differences in output across economies and...

Question 4

There are no questions for this section.
6.7 Sources of Economic Growth: Growth Accounting

Accepted Answer

The answer of There are no questions for this section.
6.7...

Question 5

Figure 6.1 
-According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the slow growth of ________.
A)productivity
B)labor input
C)output
D)capital input

Accepted Answer

Labor input grew slowly from 1996 to 2011, as shown in Figure 6.1.

Question 6

A major contribution of the Solow model is its ________.
A)insight into what distinguishes rich economies from poor economies
B)explanation of why productivity grows over time
C)demonstration that the key to sustained growth is a high level of saving
D)encouragement of policies to limit population growth

Accepted Answer

The Solow model provides insights into what distinguishes rich economies from poor economies. It emphasizes the role of technology and its impact on economic growth, which has been widely utilized in policy-making and understanding global trends in economic development.

Question 7

Figure 6.1 
-According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the rapid growth of ________.
A)productivity
B)labor input
C)output
D)capital input

Accepted Answer

The answer of Figure 6.1 
-According to Figure 6.1,the period...

Question 8

Figure 6.1 
-According to Figure 6.1,in postwar U.S history ________.
A)productivity growth was always exceeded by labor growth
B)labor growth has always exceeded capital growth
C)productivity growth has always exceeded capital growth
D)output growth has always exceeded productivity growth

Accepted Answer

Output growth exceeding productivity growth implies that the increase in total production is greater than the improvements in the efficiency of production. This can occur when there is an increase in inputs (like labor and capital) alongside productivity improvements, leading to overall higher output growth.

Question 9

Figure 6.1 
-According to Figure 6.1,the period from 1974 to 1995 is particularly remarkable for the slow growth of ________.
A)output per worker
B)labor input
C)output
D)capital input

Accepted Answer

From Figure 6.1, it is evident that output per worker (measured by GDP per capita) had a slower growth rate compared to other variables such as labor input, output, and capital input, especially during the period from 1974 to 1995, implying lower efficiency in utilizing labor resources.

Question 10

Economic growth ________.
A)is driven by different elements in different economies
B)is driven primarily by digital technology
C)is driven primarily by labor growth
D)cannot be explained using economic models

Accepted Answer

Economic growth is not solely driven by a single factor, but rather a combination of factors such as capital accumulation, technological advances, labor availability, and resource endowment. The factors driving economic growth can vary between economies, depending on their level of development and the unique challenges they face.

Question 11

National output is a function of ________.
A)capital and saving
B)technology,employment and demand
C)labor and depreciation
D)labor,technology and capital

Accepted Answer

National output is the total quantity of goods and services that a country produces in a given period of time. This production process requires labor, technology and capital. Therefore, the inputs that contribute to the total output are labor, technology and capital.

Question 12

The growth accounting equation suggests that the growth rate of output is equal to the growth rate of ________.
A)total factor productivity plus the contributions of both capital and labor
B)total factor productivity minus the rate of depreciation
C)capital and labor
D)the overall population

Accepted Answer

The growth accounting equation states that the growth rate of output is equal to the growth rate of total factor productivity plus the contributions of both capital and labor. This equation is used to analyze the sources of economic growth and can help policymakers determine which factors to focus on to increase output. Option B is partially correct but doesn't include labor, which is also a crucial factor in economic growth. Option C is too general and doesn't specify the contribution of each factor. Option D is not relevant to the growth accounting equation.

Question 13

Figure 6.1 
-According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1948-73 equalled ________.
A)1.8 percent
B)4.0 percent
C)39 percent
D)697 percent

Accepted Answer

From Figure 6.1, it can be observed that the average annual rate of growth of the U.S. economy in the period 1948-73 is approximately 4.0 percent, which is closest to option B.

Question 14

Productivity is ________.
A)determined by central bank policy
B)the combined effect of monetary and fiscal policy
C)the residual component of the production function
D)driven by changes in the rate of growth of output

Accepted Answer

Productivity is defined as the amount of output per unit of input, or how efficiently resources are used in producing goods and services. In economic theory, productivity is considered a residual factor in the production function, meaning it is not directly influenced by monetary or fiscal policy measures, but is rather determined by a range of non-monetary factors, such as technological progress, efficient resource allocation, and innovation.

Question 15

Capital and labor are distinct from productivity in that ________.
A)productivity is independent of technology changes
B)productivity can only increase over time
C)productivity is subject to diminishing returns
D)capital and labor are subject to diminishing marginal returns

Accepted Answer

Capital and labor are subject to diminishing marginal returns, meaning that as more units of either input are added, the increase in productivity will eventually decrease. Productivity, on the other hand, can be influenced by technology changes, and may not necessarily increase over time or be subject to diminishing returns. Therefore, option (D) is the best choice.

Question 16

Which of the following is the most difficult to measure? Changes in ________.
A)the size of the labor force
B)population
C)the quantity of labor
D)productivity

Accepted Answer

Productivity is the most difficult to measure of the given options as it involves calculating the ratio of output to input, which can be subjective and open to interpretation. It is also influenced by various factors such as technology, skill levels, and production methods, making it a challenging measure to assess accurately. The other options can be measured more objectively using available data and standard methods.

Question 17

The slowdown in U.S.economic growth in the period 1974-95 was primarily caused by ________.
A)falling labor growth
B)falling capital growth
C)falling productivity growth
D)none of the above

Accepted Answer

Productivity growth measures the increase in output per worker, and falling productivity growth means that each worker is producing less, leading to a slowdown in economic growth. Labor and capital growth alone cannot fully explain the slowdown during this period.

Question 18

Productivity growth can be measured ________. A)by dividing output by K_t^0.3L_t^0.7 B)by adding the contributions from capital growth and labor growth C)by subtracting the contributions from capital growth and labor growth from the growth of output D)by dividing the growth of output by the contributions from capital growth and labor growth

Accepted Answer

Productivity growth is typically measured by subtracting the contributions of capital and labor growth from the overall growth of output, which isolates the growth attributable to improvements in efficiency or technology.

Question 19

If the contribution from capital and labor growth in a given economy equals 4.0 percent and output growth equals 6.4 percent over that same period of time,then productivity growth must equal ________.
A)25.6 percent
B)10.4 percent
C)2.4 percent
D)1.6 percent

Accepted Answer

Productivity growth can be calculated as the difference between output growth and the contribution from capital and labor growth. Thus, productivity growth = output growth - (contribution from capital and labor growth) = 6.4% - 4.0% = 2.4%. Therefore, the answer is C.

Question 20

The highest rate of U.S.growth was recorded in which of the following periods?
A)1948-73
B)1967-83
C)1974-95
D)1996-2008

Accepted Answer

The highest rate of U.S. growth was recorded in the period from 1948 to 1973, a time often referred to as the "Golden Age" of economic expansion in the post-World War II era. This period was characterized by rapid industrial growth, significant increases in productivity and living standards, and relatively low unemployment rates.

Quiz 6: The Sources of Growth and the Solow Model

If productivity growth equals 3.0 percent,the contribution from capital growth 1.2 percent and the contribution from labor growth 2.0 percent,then output growth must equal ________.

Figure 6.1 -According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1996-2011 equalled ________.

There are no questions for this section. 6.7 Sources of Economic Growth: Growth Accounting

Figure 6.1 -According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the slow growth of ________.

A major contribution of the Solow model is its ________.

Figure 6.1 -According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the rapid growth of ________.

Figure 6.1 -According to Figure 6.1,in postwar U.S history ________.

Figure 6.1 -According to Figure 6.1,the period from 1974 to 1995 is particularly remarkable for the slow growth of ________.

Economic growth ________.

National output is a function of ________.

The growth accounting equation suggests that the growth rate of output is equal to the growth rate of ________.

Figure 6.1 -According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1948-73 equalled ________.

Productivity is ________.

Capital and labor are distinct from productivity in that ________.

Which of the following is the most difficult to measure? Changes in ________.

The slowdown in U.S.economic growth in the period 1974-95 was primarily caused by ________.

Productivity growth can be measured ________.

If the contribution from capital and labor growth in a given economy equals 4.0 percent and output growth equals 6.4 percent over that same period of time,then productivity growth must equal ________.

The highest rate of U.S.growth was recorded in which of the following periods?