Question 1

Labor productivity is NOT a major determinant of:

Accepted Answer

Labor productivity is not a major determinant of the money supply. The money supply is determined by monetary policy decisions made by central banks. Labor productivity, on the other hand, refers to the amount of output that can be produced per unit of input (such as labor). It is an important factor in determining economic growth, per capita GDP, and living standards.

Question 2

Total factor productivity would not change if:

Accepted Answer

A major new source of oil being discovered increases the availability of a natural resource, which affects the input factors but does not directly change the efficiency with which inputs are used, hence not affecting total factor productivity.

Question 3

Government funding of Los Alamos National Labs is an example of government acting in its role to promote economic growth by:

Accepted Answer

Los Alamos National Labs is a government-funded institution aimed at promoting economic growth by enhancing physical and human capital. The lab conducts research in various fields, including nuclear science, energy, and materials science, which in turn creates new technologies, products, and processes that can benefit society and the economy. By providing funding to the labs, the government is investing in research and development that can spur innovation, deepen scientific and engineering knowledge, and improve the skills and capabilities of workers, all of which can contribute to long-term economic growth.

Question 4

The single largest consumer of goods and services in the United States is:

Accepted Answer

The answer of The single largest consumer of goods and...

Question 5

The U.S.Patent Office grants Rene a patent for a new method of waterproofing outdoor gear.It is acting in its role to promote economic growth by:

Accepted Answer

The U.S. Patent Office, by granting patents, ensures a stable legal system where inventors are protected and incentivized through exclusive rights to their inventions, thereby promoting economic growth by encouraging innovation and investment in new technologies.

Question 6

According to Malthus,what part of the economy might increase at a rate such that the data would show an increase from 1,000 to 2,000 to 4,000 to 16,000?

Accepted Answer

The answer of According to Malthus,what part of the economy...

Question 7

Which of the following statements about the role of social media in promoting economic growth is FALSE?

Accepted Answer

The statement that the advent of social media raised costs for firms, which now must invest in web pages and information gathering technology to stay competitive, is false. While social media may require firms to invest in building an online presence, they also provide cost-effective ways to reach a large audience and engage customers. Overall, social media have been shown to promote economic growth by increasing efficiency, expanding markets, and creating new opportunities for businesses.

Question 8

The government decides to subsidize the development of a new communications network.It is acting in its role to promote economic growth by:

Accepted Answer

By subsidizing the development of a new communications network, the government is enhancing physical and human capital, which is one of the ways to promote economic growth. Physical capital refers to the tools, equipment, and infrastructure necessary for economic activity, while human capital refers to the knowledge, skills, and abilities of people necessary to carry out economic activities. The new communications network will provide people with improved access to information and enhance their ability to communicate, ultimately leading to increased productivity and economic growth.

Question 9

Because of the work of _____ during the late 18th and early 19th centuries,economics became known as the dismal science.

Accepted Answer

Thomas Malthus's theory of population growth and its negative impact on economic development led to the term "dismal science" being used to describe economics.

Question 10

Malthus believed that population increased ______ and food resources increased ______.

Accepted Answer

Malthus believed that population increased at a geometric rate (exponentially) while food resources increased at an arithmetic rate (linearly), which would eventually lead to a population crisis due to insufficient resources to sustain the growing population.

Question 11

When the government funds Head Start,it is acting in its role to promote economic growth by:

Accepted Answer

Head Start provides early childhood education and health services to low-income children and their families, which enhances their human capital. This prepares them for future success in education and careers, ultimately contributing to the overall economic growth of the country.

Question 12

In his essay on population,Malthus argued that any improvement in the standard of living would lead to:

Accepted Answer

Malthus believed that a population would always increase to the point where it was limited by available food supply, and any improvements in the standard of living would only lead to an increase in population size that would then outstrip the growth in food supply. This is known as the "Malthusian trap."

Question 13

Over the past century,when worker productivity rose:

Accepted Answer

When worker productivity rises, it means that they are producing more output in the same amount of time, which leads to an increase in the overall level of economic output. As a result, wages tend to rise as firms are able to pay workers more due to their increased productivity. This increase in real wages allows workers to purchase more goods and services, leading to economic growth and prosperity. Therefore, the best answer is A.

Question 14

According to Malthus,a fixed quantity of land and a growing human population will eventually produce:

Accepted Answer

According to Malthus, a fixed quantity of land and a growing human population will eventually lead to a stationary state in which growth will cease. This is because the limited resources of land would not be able to support the increasing population indefinitely, leading to a plateau in economic growth.

Question 15

As a rule,the more capital employed with workers,the ________ their productivity and the ________ their earnings.

Accepted Answer

When more capital is employed with workers, their productivity generally increases as they have access to more tools and machinery that can help them work more efficiently. This increased productivity can lead to higher earnings as workers are able to produce more in the same amount of time. Therefore, the correct option is C, higher productivity and higher earnings.

Question 16

The catch-up effect tends to:

Accepted Answer

The catch-up effect refers to the tendency for less developed countries to experience more rapid economic growth compared to developed countries. This is largely due to their ability to adopt and adapt already developed technologies, allowing them to catch up to developed countries. However, as these countries become more developed and the technological gap between developed and less developed countries narrows, the catch-up effect slows down over time. This is because the remaining technological advancements become harder and more expensive to develop, making it more difficult for less developed countries to keep up.

Question 17

Use of tax receipts to modernize the air traffic control system promotes economic growth by:

Accepted Answer

Modernizing the air traffic control system would require investments in physical and human capital, which will lead to increased productivity and efficiency in the aviation industry. This, in turn, will promote economic growth through improved connectivity, lower transportation costs, and increased business activity.

Question 18

Labor productivity is a major determinant of:

Accepted Answer

Labor productivity refers to the amount of output that can be produced by a given amount of labor in a certain period of time. Higher labor productivity leads to higher output per worker, which ultimately leads to higher living standards for the population. Therefore, labor productivity is a major determinant of living standards. Choices A and B are incorrect because labor productivity is not directly related to the size or skill level of the labor force. Choice C is incorrect because labor productivity is not related to the money supply.

Question 19

The government decides to give tax-exempt status to a new organization whose mission is to award college scholarships to members of the armed forces.In doing so,the government is acting in its role to promote economic growth by:

Accepted Answer

By awarding college scholarships to members of the armed forces, the government is enhancing human capital, which can lead to increased productivity and economic growth.

Question 20

Developing countries can achieve higher productivity per unit of capital because they can use technologies developed by other countries.This is known as the:

Accepted Answer

The catch-up effect refers to the ability of developing countries to achieve higher productivity per unit of capital because they can adopt or imitate the technologies developed by other countries. This allows them to close the gap between their productivity levels and those of developed countries. The increasing returns to capital effect refers to the idea that as capital accumulates, the return on that capital increases, and the copycat effect is not a widely recognized economic concept. Therefore, the best choice is C - the catch-up effect.

Quiz 7: Economic Growth