Deck 8: B: Economic Growth

Question 1

Real GDP per capita is found by:

A)adding real GDP and population.
B)subtracting population from real GDP.
C)dividing real GDP by population.
D)dividing population by real GDP.

Answer 1

C

Question 2

Economic growth is best defined as an increase in:

A)either real GDP or real GDP per capita.
B)nominal GDP.
C)total consumption expenditures.
D)wealth in the economy.

Answer 2

A

Question 3

Defenders of growth say that it is the primary path to raising living standards.

Answer 3

True

Question 4

The rise in productivity seen in the last decade is believed to be due to a significant new wave of technological advance coupled with global competition.

Question 5

In Canada, real GDP per capita has increased more rapidly than real GDP.

Question 6

An outward shift in the production possibilities curve is the direct result of improvements in the efficiency factor for economic growth.

Question 7

Real GDP = worker-hours * labour productivity.

Question 8

The rate of economic growth is best defined as the:

A)increase in investment as a percentage of GDP over time.
B)percentage increase in nominal GDP over time.
C)percentage increase in real GDP over time.
D)percentage increase in the quantity and quality of capital, human, and natural resources which occurs over time.

Question 9

About two-thirds of Canada's growth rate in the last half century has been due to rising productivity and about one-third has been due to the use of more inputs.

Question 10

Economic growth can be shown as a movement from a point on one production possibility curve to a point on a curve located farther from the origin.

Question 11

An increase in the quantity and quality of natural resources is a demand factor for economic growth.

Question 12

Improvements in education and training explain nearly 80 percent of the historical growth of Canadian labour productivity.

Question 13

If an economy's real GDP is growing by 5 percent per year, its real domestic output will double in approximately fourteen years.

Question 14

Economic growth lessens the burden of scarcity and provides increases in domestic output which can be used to alleviate national economic problems.

Question 15

Poorer follower countries can grow much faster than leader countries because they can simply adopt existing technologies from richer leader countries.

Question 16

Critics of economic growth say that it will deplete economic resources.

Question 17

A rightward shift of a nation's production possibilities curve is a necessary but not sufficient condition for economic growth.

Question 18

Simultaneous consumption is a source of increasing returns and economies of scale.

Question 19

Productivity growth is a minor source of improvements in real wage rates and the standard of living.

Question 20

Economies of scale are increases in per-unit cost that result in a decrease in the size of markets and firms.

Question 21

If a nation's real GDP is growing by 3 percent per year, its real domestic output will double in approximately:

A)21 years.
B)23 years.
C)29 years.
D)42 years.

Question 22

Real GDP was $4,719 billion in Year 1 and $4,848 billion in Year 2.In contrast, real GDP per capita in Year 1 was $19,261, but in Year 2 it was only $19,162.Why did one measure increase while the other measure decreased?

A)Real GDP indicates the level of industrial production and provides a measure of the economic strength of the nation; it is the only valid measure of economic growth.
B)Inflation occurred during this period; therefore the two measures are not comparable.
C)Population increased during this time period so real GDP per capita data reflect this change.
D)Real GDP per capita measures changes in labour productivity that are not captured by a simple measure like real GDP.

Question 23

Nominal GDP was $9,500 billion in Year 1 and $10,000 billion in Year 2.The GDP price index was 170 in Year 1 and 175 in Year 2.Between Years 1 and 2, the rate of growth in real GDP was approximately:

A)1.6 percent.
B)2.3 percent.
C)4.4 percent.
D)5.3 percent.

Question 24

Which would be the best economic measure to compare standards of living among nations over time?

A)changes in labour productivity
B)changes in real domestic output
C)changes in real GDP per capita
D)changes in nominal income per capita

Question 25

Growth is advantageous to a nation because it:

A)promotes faster population growth.
B)lessens the burden of scarcity.
C)eliminates the economizing problem.
D)slows the growth of wants.

Question 26

If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately:

A)22 years.
B)20 years.
C)14 years.
D)8 years.

Question 27

Refer to the above table, between years 2 and 3:

A)Italy's real GDP grew more rapidly than China's real GDP.
B)real GDP fell in China.
C)population growth reduced Italy's real GDP growth to zero.
D)population fell in Italy's.

Question 28

Real GDP was $9,950 billion in Year 1 and $10,270 billion in Year 2.What was the approximate rate of economic growth from Year 1 to Year 2?

A)1.6 percent
B)2.4 percent
C)3.2 percent
D)4.3 percent

Question 29

Other things being equal, all of the following would cause a rise in a country's real per capita GDP, except a(n):

A)increase in the general price level.
B)decrease in the population size.
C)increase in labour productivity.
D)decrease in imports.

Question 30

Suppose the nominal GDP of an economy was $100 billion in 2016 and $260 billion in 2017.The general price index was 100 in 2016 and 180 in 2017.During 2016-2017, the economy's real GDP rose by:

A)160 percent.
B)44 percent.
C)37 percent.
D)12 percent.

Question 31

Refer to the above table.Between years 1 and 2, real GDP grew by _______ percent in Italy:

A)3
B)4
C)5
D)10

Question 32

Over a year, a nation's GDP at current prices rose by 15 percent while the price index increased from 100 to 110.GDP at constant prices rose by about:

A)3 percent.
B)5 percent.
C)7 percent.
D)9 percent.

Question 33

If an economy's real GDP doubles in fourteen years, then the average annual rate of growth in real GDP is about:

A)3 percent.
B)4 percent.
C)5 percent.
D)6 percent.

Question 34

Assume that the nominal GDP of an economy was $350 billion in 2016 and $375 billion in 2017.On the basis of this information, we:

A)cannot make a meaningful comparison of the economy's performance in 2017 relative to 2016.
B)can conclude that the economy achieved real economic growth in 2017.
C)can conclude that the real GDP was higher in 2016 than in 2017.
D)can conclude that the real GDP was lower in 2016 than in 2017.

Question 35

Real GDP was $9,950 billion in Year 1 and $10,270 billion in Year 2.The population rose from 270 million in Year 1 to 275 million in Year 2.What was the approximate increase in real GDP per capita rate from Year 1 to Year 2?

A)1.3 percent
B)2.1 percent
C)3.3 percent
D)4.2 percent

Question 36

Which of the following statements is correct?

A)During 1961-2017, Canadian real GDP has grown at about 3.2 percent per year and real GDP per capita has grown at about 2.1 percent per year.
B)During 1961-2017, Canadian real GDP has grown at about 2.1 percent per year and real GDP per capita has grown at about 3.3 percent per year.
C)between 1960 to 2010, Canadian real GDP and real GDP per capita have both grown at about 4 percent per year.
D)between 1960 to 2010, Canadian real GDP and real GDP per capita have both grown at about 2 percent per year.

Question 37

The best measure of economic growth adjusted for the population of a nation is the increase in:

A)aggregate demand over time.
B)real GDP per worker over time.
C)real GDP per capita over time.
D)real GDP per dollar of capital stock over time.

Question 38

If the economy's real GDP doubles in 18 years, we can:

A)not say anything about the average annual rate of growth.
B)conclude that its average annual rate of growth is about 5.5 percent.
C)conclude that its average annual rate of growth is about 2 percent.
D)conclude that its average annual rate of growth is about 4 percent.

Question 39

Refer to the above table, per capita GDP was about:

A)$105 in year 3 in Italy.
B)$303 in year 3 in China.
C)$200 in year 1 in China
D)$5 in year 2 in Italy.

Question 40

Refer to the above table.Between years 1 and 2, real GDP per capita grew by _____ percent in Italy:

A)3
B)4
C)5
D)10

Question 41

Which is best considered an efficiency factor in economic growth?

A)the quantity of human resources
B)the quality of human resources
C)the quantity of natural resources
D)the full employment of resources

Question 42

Which of the following countries had the highest average annual rate of growth of real GDP from 1960 to 2010?

A)United Kingdom
B)South Korea
C)Canada
D)United States

Question 43

Economic well-being in Canada is understated by growth rates because they:

A)account for pollution expenditures.
B)don't account for improvement in products.
C)account for illegal activity.
D)don't account for the slowdown in productivity.

Question 44

Refer to the above diagram.If the production possibilities curve of an economy shifts from AB to EF, it is most likely the result of what factor affecting economic growth?

A)a supply factor
B)a demand factor
C)an efficiency factor
D)an allocation factor

Question 45

A supply factor in economic growth would be:

A)a fall in the efficient use of resources.
B)a rise in the rate of resource depletion.
C)an increase in the quantity of labour.
D)an increase in consumption spending.

Question 46

Which is an efficiency factor in economic growth?

A)an efficient allocation of resources
B)natural resources
C)the quantity and quality of labour
D)technological knowledge

Question 47

There are several institutional structures that promote and sustain economic growth.These factors include:

A)efficient financial institutions, education, free trade, patent and copyrights, property rights and competitive market system.
B)restricted trade, property rights and, monopoly power.
C)monopoly power, education and strong market incentives.
D)both efficient financial institutions, education, free trade, patent and copyrights, property rights and competitive market system and restricted trade, property rights and, monopoly power.

Question 48

Economic well-being in Canada is overstated by growth rates because they don't account for:

A)increases in services.
B)increase in leisure time.
C)improvements in product quality.
D)adverse effects on the environment.

Question 49

Compared to the leader countries, the follower countries can grow at a faster rate because:

A)follower countries have a hard time adopting a technology.
B)leader countries cannot grow anymore.
C)follower countries can skip past many stages of technology that the leader countries had to pass through.
D)leader countries can skip past many stages of technology that the follower countries had to pass through.

Question 50

Refer to the above diagram.If the production possibilities curve of an economy shifts from AB to CD, it is most likely the result of what factor affecting economic growth?

A)a supply factor
B)a demand factor
C)an efficiency factor
D)an allocation factor

Question 51

Refer to the above diagram.If the production possibilities curve for an economy is at AB but the economy is operating at point 4, the reasons are most likely to be because of:

A)supply and environmental factors.
B)demand and efficiency factors.
C)labour inputs and labour productivity.
D)technological progress.

Question 52

Which of the following is not a supply factor in economic growth?

A)the stock of capital
B)technological advance
C)the size and quality of the labour force
D)full employment

Question 53

Which is best considered a supply factor for long-run economic growth?

A)government spending
B)the stock of capital goods
C)full employment of resources
D)personal consumption expenditures

Question 54

Refer to the above diagram.If there is a movement away from the full employment of resources in an economy with production possibilities curve AB, this can be shown by:

A)a shift of the curve from AB to CD.
B)a movement from point 3 to point 1.
C)a movement from point 2 to point 4.
D)point 5 in the diagram.

Question 55

Refer to the above diagram.Assume a nation's current production possibilities are represented by the curve AB.Positive economic growth would best be indicated by a:

A)shift in the curve from AB to CD.
B)shift in the curve from AB to EF.
C)movement from point 1 to point 2.
D)movement from point 3 to point 4.

Question 56

Economic well-being in Canada is understated by growth rates because they:

A)account for pollution expenditures.
B)account for improvement in products.
C)account for illegal activity.
D)don't account for the added leisure of labour.

Question 57

The different starting dates for modern economic growth in different parts of the world are the main cause of:

A)today's small differences in per capita GDP levels around the world.
B)today's large differences in per capita GDP levels around the world.
C)today's small differences in nominal GDP levels around the world.
D)today's large differences in population levels around the world.

Question 58

The countries which have begun modern economic growth later than the others can catch up because:

A)for them, it is quicker to adopt technology rather than inventing one.
B)for them, it is harder to adopt technology rather than inventing one.
C)for them, it is as hard to adopt technology as it is to invent one.
D)for them, it is very easy to invent a new technology with lower cost.

Question 59

Which is a demand factor in economic growth?

A)more human and natural resources
B)technological progress and innovation
C)an increase in the economy's stock of capital goods
D)an increase in total spending in the economy

Question 60

The average living standards in Canada compared to Africa are much higher because:

A)the economic growth has occurred for nearly two centuries in Africa compared to a few decades in Canada.
B)the economic growth has occurred for nearly two centuries in Canada compared to more than two centuries in Africa.
C)the economic growth differences have no relationship to the differences in the average standards of living.
D)the economic growth has occurred for nearly two centuries in Canada compared to a few decades in Africa.

Question 61

Labour productivity may best be defined as:

A)total output/worker-hours.
B)nominal GDP minus real GDP.
C)the ratio of real capital to worker-hours.
D)the annual increase in nominal GDP per worker.

Question 62

Refer to the above graph.If the production possibilities curve of an economy shifts from AB to CD, it is most likely caused by:

A)a decrease in the price level.
B)allocative efficiency.
C)technological progress.
D)full employment of resources.

Question 63

Real GDP or total output in any year is equal to:

A)labour inputs divided by resource outputs.
B)labour productivity multiplied by real output.
C)worker-hours multiplied by labour productivity.
D)worker-hours divided by labour productivity.

Question 64

If the number of worker-hours in an economy is 100 and its labour productivity is 5 units of output per worker-hour, the economy's real GDP:

A)is $20.
B)is $500.
C)is $5000.
D)cannot be calculated.

Question 65

Refer to the above diagram.The most likely cause of a shift from AB to CD would be a(n):

A)increase in productivity.
B)increase in the price level.
C)decrease in the size of the labour force.
D)recession.

Question 66

Refer to the above diagram.Realized economic growth is best represented by a:

A)shift in the production possibilities curve from y on AB to X on CD.
B)move from X on AB to y on CD.
C)shift in the production possibilities curve from CD to AB.
D)move from X to z along AB.

Question 67

Assume that an economy has 1500 workers, each working 2000 hours per year.If the average real output per worker-hour is $20, then total output or real GDP will be:

A)$3 million.
B)$30 million.
C)$45 million.
D)$60 million.

Question 68

Real GDP in any year is equal to:

A)the quantity of labour divided by resource outputs.
B)labour productivity multiplied by the quality of labour.
C)worker-hours divided by labour productivity.
D)worker-hours multiplied by labour productivity.

Question 69

Refer to the above graph.If the production possibilities curve for an economy is at CD but the economy is operating at point X, the reasons are most likely to be:

A)technological progress and industrial change.
B)increases in the quantity and the quality of resources.
C)improvement in labour productivity and the number of worker-hours.
D)lack of full employment and inefficient allocation of resources.

Question 70

Which of the following would not be expected to increase labour productivity?

A)technological advance
B)the acquisition of more education and training by the labour force
C)an increase in the size of the labour force
D)the realization of economies of scale

Question 71

The historical reallocation of labour from agriculture to manufacturing in Canada has:

A)been inflationary.
B)had no effect upon the average productivity of labour.
C)increased the average productivity of labour.
D)reduced the average productivity of labour.

Question 72

Refer to the diagram below.A shift in the production possibilities curve from AB to CD is most likely due to:

A)the use of the economy's resources in an efficient way.
B)an increase in the spending of business and consumers.
C)an increase in government purchase of the economy's output.
D)an increase in the quantity and quality of labour resources.

Question 73

Suppose total output (real GDP) is $4000 and labour productivity is 8.We can conclude that:

A)real GDP per capita must be $500.
B)the price-level index must be greater than 100.
C)nominal GDP must be $500.
D)the number of worker-hours must be 500.

Question 74

Suppose total output (real GDP) is $10,000 and worker-hours are 20,000.We can conclude that:

A)real GDP per capita must be $200,000.
B)the price-level index must be less than 100.
C)labour productivity must be 0.5.
D)nominal GDP must be between $10,000 and $20,000.

Question 75

Which of the following is correct?

A)total output = labour productivity/worker-hours
B)labour productivity = worker-hours/total output
C)total output = worker-hours * labour productivity
D)worker-hours = labour productivity * total output

Question 76

Economic growth can best be portrayed as a:

A)leftward shift of the production possibilities curve.
B)movement from a point inside to a point outside of the production possibilities curve.
C)movement from a point near the vertical axis to a point near the horizontal axis on the production possibilities curve.
D)rightward shift of the production possibilities curve.

Question 77

Economic growth can be portrayed as a(n):

A)outward shift of the production possibilities curve.
B)inward shift of the production possibilities curve.
C)movement from a point on to a point inside a production possibilities curve.
D)movement from one point to another point on a production possibilities curve.

Question 78

The achievement of full employment through time will:

A)diminish labour productivity.
B)reduce the level of investment as a percentage of GDP.
C)increase the rate of growth of real GDP.
D)have no impact on the rate of growth of real GDP.

Question 79

An outward shift of a nation's production possibilities curve:

A)ensures the nation of an increase in real GDP per capita.
B)could increase the nation's real GDP, but not the real- GDP per capita.
C)could reduce the nation's real GDP.
D)corresponds to a leftward shift of the nation's long-run aggregate supply curve.

Question 80

Labour productivity is measured by:

A)the ratio of capital to labour.
B)real output per worker hour.
C)real output per capital.
D)the ratio of worker hours to nominal GDP.