Question 1

Once a country's borders are set, the quality of land available as inputs cannot change.

Accepted Answer

The quality of land available as inputs can change due to factors such as climate change, soil degradation, and human intervention such as land reclamation and soil improvement techniques.

Question 2

If Canada has an annual average growth rate of 2 percent, and China has an annual growth rate of 5 percent, it will take Canada 21 more years than China to double real GDP per person.

Accepted Answer

Using the Rule of 70, which estimates the doubling time of an investment or GDP, Canada would take 35 years (70/2) to double its GDP, while China would take 14 years (70/5). The difference is 21 years.

Question 3

If real GDP per person increases over a year from $50,000 to $60,000, the economic growth rate is 20 percent.

Accepted Answer

The economic growth rate is calculated by taking the change in GDP per person ($60,000 - $50,000 = $10,000), dividing by the original GDP per person ($50,000), and then multiplying by 100 to get a percentage. ($10,000 / $50,000) * 100 = 20%.

Question 4

The quality of labour inputs increases with increases in the labour force participation rate.

Accepted Answer

The quality of labor inputs is determined by factors such as education, skills, and experience, not just by the number of people participating in the labor force. An increase in the labor force participation rate could include individuals with varying levels of skill and productivity, which does not necessarily improve the overall quality of labor inputs.

Question 5

On-the-job training increases human capital.

Accepted Answer

On-the-job training involves learning new skills and knowledge while working, which enhances and increases the human capital of the employee.

Question 6

Even after a country's borders are set, the quality of land available as inputs can change.

Accepted Answer

The quality of land can be affected by various factors such as climate change, soil erosion, and natural disasters, which can change the inputs available for production even after a country's borders are set.

Question 7

On-the-job training decreases human capital.

Accepted Answer

On-the-job training is an investment in human capital. It increases an employee's knowledge, skills, and experience, making them more valuable to their employer and increasing their earning potential.

Question 8

Over long periods of time, a growth rate of 3 percent per year is considered to be very good.

Accepted Answer

A growth rate of 3 percent per year is generally considered to be a healthy and sustainable rate for an economy, as it allows for steady expansion without excessive inflation or other negative effects.

Question 9

In Olliestan the economic growth of real GDP per person averages 5 percent per year. The Rule of 70 suggests that real GDP per person will double in 5 years.

Accepted Answer

The Rule of 70 states that to estimate the number of years it takes for a variable to double, divide 70 by the annual growth rate. Therefore, in Olliestan, it would take approximately 14 years (70/5) for real GDP per person to double, not 5 years.

Question 10

Once a country's borders are set, the quantity of land available as inputs does not change.

Accepted Answer

Countries can change their borders through various means such as annexation, ceding territory, or through international agreements, which can alter the quantity of land available as inputs. Additionally, land reclamation projects can increase the amount of usable land.

Question 11

It took far more hours of work to buy a movie ticket in the 1920s than it does today.

Accepted Answer

In the 1920s, movie tickets were relatively inexpensive compared to today, and the average wage allowed people to buy tickets with fewer hours of work than it might take today, considering inflation and wage changes.

Question 12

The quantity of land available as inputs can increase by bringing land not connected to markets into the circular flow.

Accepted Answer

Bringing previously unused land into the circular flow can increase the quantity of land available as inputs.

Question 13

The quantity of labour inputs increases through training and education.

Accepted Answer

The answer of The quantity of labour inputs increases through...

Question 14

If real GDP per person increases over a year from $50,000 to $60,000, the economic growth rate is 10 percent.

Accepted Answer

The economic growth rate is calculated as the percentage increase in real GDP per person. In this case, it would be $\frac{60,000 - 50,000}{50,000} \times 100 = 20\%.$

Question 15

In Olliestan the economic growth of real GDP per person averages 5 percent per year. The Rule of 70 suggests that real GDP per person will double in 14 years.

Accepted Answer

Using the Rule of 70, we can calculate that it will take approximately 14 years for real GDP per person to double at a growth rate of 5 percent per year. Therefore, the statement is true.

Question 16

Even after a country's borders are set, the quantity of land available as inputs can change.

Accepted Answer

The quantity of land available as inputs can change due to natural disasters, climate change, land reclamation, and other factors.

Question 17

The quantity of labour inputs increases with increases in the labour force participation rate.

Accepted Answer

The labour force participation rate refers to the proportion of the population that is either employed or actively seeking employment. As more people participate in the labour force, there is a greater quantity of labour inputs available for production, which can increase output and economic growth. Therefore, the statement is true.

Question 18

Constructing more factories increases capital inputs.

Accepted Answer

Constructing more factories requires investment in capital goods such as machinery, equipment, and buildings, which increases capital inputs in the economy.

Question 19

The quality of labour inputs increases through training and education.

Accepted Answer

Training and education are effective ways to increase the skills, knowledge and productivity of workers, thus improving the quality of labour inputs.

Question 20

The population of West Moreland is 200,000 persons. There are 180,000 persons in the labour force. The labour force participation rate is 90 percent.

Accepted Answer

The labour force participation rate is calculated by dividing the labour force (180,000) by the total population (200,000), which equals 0.9 or 90%.

Quiz 6: Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles