Deck 5: The Reality of Economic Growth: History and Prospect

Question 1

Prior to 1500, there were no sustained increases in the material prosperity of human labor because of a combination of

A) resource scarcity and lack of money.
B) resource scarcity and expanding populations.
C) resource scarcity and no technological progress.
D) no technological progress and expending populations.

Answer 1

resource scarcity and expanding populations.

Question 2

One of the oldest ideas in economics is that _________ in technological capability induce _________ in human fertility that will inevitably run into natural resource scarcity.

A) increases; increases
B) increases; decreases
C) decreases; increases
D) increases; no change

Answer 2

increases; increases

Question 3

Thomas R. Malthus saw a world in which inventions and higher living standards led to _______ in the rate of population growth.

A) decreases
B) no change
C) increases
D) decreases and then increases

Answer 3

increases

Question 4

According to Thomas R. Malthus, faster rates of population growth _______ natural resource scarcity and
_______ productivity.

A) decreased; increased
B) decreased; decreased
C) increased; increased
D) increased; decreased

Question 5

We no longer live in a Malthusian age because for, at least two hundred years, improvements in the_______ of labor made possible by new _______ and better ________ have not been neutralized by natural resource scarcity.

A) type; capital; technology
B) efficiency; technology; organizations
C) employment; organizations; capital
D) institution; technology; organizations

Question 6

The demographic transition sees, first, a ______ in birth and a sharp ______ in death rates as material standards of living increase above "subsistence" levels and then birth rates start to _______ rapidly too.

A) rise; fall; decrease
B) fall; rise; decrease
C) fall; rise; increase
D) rise; fall; increase

Question 7

Demographers believe that the world population has at most _______________ to undergo before the demographic transition will have taken hold throughout the world.

A) one more tripling
B) two more doublings
C) one more doubling
D) one more squaring

Question 8

Each of the following are inventions which occurred after 1750 (and were thus part of the industrial revolution) except

A) the steam engine.
B) the printing press.
C) the spinning jenny.
D) the power loom.

Question 9

Each of the following are inventions which occurred after 1750 (and were thus part of the industrial revolution) except

A) the hydraulic press.
B) the spinning jenny.
C) the printing press.
D) the sewing machine.

Question 10

Each of the following are inventions which occurred after 1750 (and were thus part of the industrial revolution) except

A) the hydraulic press.
B) the electric motor.
C) the water turbine.
D) the abacus.

Question 11

Each of the following are inventions which occurred after 1750 (and were thus part of the industrial revolution) except

A) the railroad locomotive.
B) the hydraulic press.
C) the steam engine.
D) the printing press.

Question 12

Standard explanations for why the Industrial Revolution took place in Britain include

A) secure property rights for commercial and manufacturing property.
B) secure voting rights for all citizens.
C) secure sources of oil.
D) a well-developed legal system with a written constitution.

Question 13

Standard explanations for why the Industrial Revolution took place in Britain include

A) limited property rights.
B) freedom of contact.
C) modern science and technology.
D) a written constitution.

Question 14

The measured growth rate of output per worker in the United States rose from about ______ percent per year from 1800 to 1870 to about ______ percent per year from

A) 5; 15
B) .5; 1.5
C) .05; .15
D) 1.5; 2.5

Question 15

The measured growth rate of output per worker in the United States rose from about ______ percent per year from 1929 to 1950 to about ______ percent per year from 1950 to 1973.

A) 1.4; 2.1
B) .14; .21
C) 14; 21
D) .014; .021

Question 16

Those of us living in the United States today have a level of productivity and material standard of living somewhere between ______ and ______ times that of our counterparts back in the late nineteenth century.

A) 4 and 15
B) 1.4 and 2.5
C) 10 and 19
D) 14 and 25

Question 17

As the level of productivity ________, the time it takes an average worker to earn the purchase of goods and services ________.

A) increases; increases
B) decreases; decreases
C) increases; decreases
D) increases; stays the same

Question 18

In addition to increases in productivity and the material standard of living, modern economic growth also results in enormous __________ ___________; i.e., a shift in the kinds of things we do at work and in the way we live.

A) structural change
B) cyclical change
C) standard change
D) reciprocal change

Question 19

Immediately after the Civil War, about ______ of all Americans were farmers whereas today less than _______ of American workers are farmers and farm laborers.

A) 75 percent; 25 percent
B) 50 percent; 2 percent
C) 25 percent; 10 percent
D) 35 percent; 5 percent

Question 20

Modern economic growth is the large-scale shift of employment from

A) agriculture to services to manufacturing.
B) services to agriculture to manufacturing.
C) agriculture to manufacturing to services.
D) manufacturing to services to agriculture.

Question 21

Each of the following is a factor in explanations of America's place at the world economy's leading edge in its level of technology throughout the twentieth century except

A) the United States had an exceptional commitment to egalitarianism.
B) the United States had an exceptional commitment to education.
C) the United States was of extraordinarily large size.
D) the United States was extraordinarily rich in natural resources.

Question 22

Each of the following is a factor in explanations of America's place at the world economy's leading edge in its level of technology throughout the twentieth century except

A) the United States had an exceptional commitment to education.
B) the United States had a vast colonial empire.
C) the United States was of extraordinarily large size.
D) the United States was extraordinarily rich in natural resources.

Question 23

Each of the following is a factor in explanations of America's place at the world economy's leading edge in its level of technology throughout the twentieth century except

A) the United States had an exceptional commitment to education.
B) the United States was extraordinarily rich in natural resources.
C) the United States was of extraordinarily large size.
D) the United States had a very intelligent aristocracy.

Question 24

Each of the following is a factor in explanations of America's place at the world economy's leading edge in its level of technology throughout the twentieth century except

A) the United States had an exceptional commitment to education.
B) the United States was of extraordinarily large size.
C) the United States developed with low tariffs and very little foreign capital.
D) the United States was extraordinarily rich in natural resources.

Question 25

Measured productivity in the United States between 1973 and 1995 ________ from 2.1% during 1950-1973 to _______.

A) increased ; 3.0%
B) decreased; 1.5%
C) increased; 3.5%
D) decreased; 0.6%

Question 26

Each of the following may have been a factor in the productivity slowdown except

A) decreased aggregate demand.
B) oil price increases.
C) the baby boom.
D) increased problems of economic measurement.

Question 27

Each of the following may have been a factor in the productivity slowdown except

A) environmental protection expenditures.
B) oil price decreases.
C) the baby boom.
D) increased problems of economic measurement.

Question 28

Each of the following may have been a factor in the productivity slowdown except

A) environmental protection expenditures.
B) oil price increases.
C) the baby boom.
D) decreased problems of economic measurement.

Question 29

Each of the following may have been a factor in the productivity slowdown except

A) environmental protection expenditures.
B) oil price increases.
C) the baby bust.
D) increased problems of economic measurement.

Question 30

Each of the following may have been a factor in the productivity slowdown except

A) environmental protection expenditures.
B) oil price increases.
C) the baby boom.
D) increased aggregate demand and the resulting inflation.

Question 31

The argument that oil prices are one of the factors in the productivity slowdown

A) has a problem because real oil prices are higher today than they were before 1973.
B) has a problem because energy costs are not a very large share of the representative business's costs.
C) is correct because real oil prices are lower now than they were before 1973.
D) is correct because energy costs are a very large share of the representative business's costs.

Question 32

The argument that oil prices are one of the factors in the productivity slowdown

A) has a problem because real oil prices are lower today than they were before 1973.
B) has a problem because energy costs are a very large share of the representative business's costs.
C) is correct because real oil prices are higher now than they were before 1973.
D) is correct because energy costs are not a very large share of the representative business's costs.

Question 33

Effects of the productivity slowdown include

A) a lengthening of the time it takes for output per worker to double.
B) less willingness of American voters to invest in social welfare programs.
C) making Americans feel less well off than they had expected they would be.
D) All of the above

Question 34

Since 1992, the United States economy has benefitted from a stunning __________ boom and ________In productivity since 1995.

A) investment; a decrease
B) investment; an increase
C) government spending; an increase
D) government spending; a decrease

Question 35

Between 1992 and 1998, the share of _________in GDP _________.

A) business fixed investment; decreased
B) business fixed investment; remained about the same
C) business fixed investment; increased
D) business variable investment; increased

Question 36

One of the leading cause of the 1990s productivity expansion has been business expenditures

A) in the stock market.
B) on computers and related equipment.
C) on corporate jets.
D) on buying other companies.

Question 37

A rapidly _______ price of capital goods has the same effect on total investment expenditures as a rapidly

A) increasing; increasing saving rate.
B) decreasing; increasing rate of growth in the efficiency of labor.
C) decreasing; decreasing saving rate.
D) decreasing; increasing saving rate.

Question 38

In terms of relative incomes and productivity levels, the world today is more _______ than ever before.

A) convergent
B) diverse
C) divergent
D) converse

Question 39

!997 purchasing-power-parity GDP per capita in the United States was approximately

A) $28,000.
B) $10,000.
C) $70,000.
D) $50,000.

Question 40

The most successful countries in terms of economic growth were showing 1997 PPP GDP per capita of more than

A) $50,000.
B) $65,000.
C) $25,000.
D) $10,000.

Question 41

The most unsuccessful countries in terms of economic growth were showing 1997 PPP GDP per capita of less than

A) $20,000.
B) $15,000.
C) $1,000.
D) $9,000.

Question 42

In the first half of the nineteenth century the average inhabitant of an average country had about _______Of the material standard of living of a citizen of the world's most advanced industrial economy; whereas today the level would be only ______.

A) one-third; one-fourth
B) one-half; one-fourth
C) one-half; one-sixth
D) one-sixth; one-half

Question 43

Purchasing-power-parity calculations attempt to translate one currency into another at a rate

A) that preserves average purchasing power.
B) that increases average purchasing power.
C) that decreases average purchasing power.
D) that preserves average exchange rates.

Question 44

On an average-exchange-rate basis GDP per worker in the United States compared to India tends to be higher relative to the purchasing-power-parity basis (70 versus 13) because

A) international arbitrage doesn't work.
B) international arbitrage only works to equalize prices for the service sector.
C) international arbitrage is unable to equalize prices for the service sector.
D) people don't respond to price signals.

Question 45

International arbitrage is unable to equalize prices in the service sector

A) because of restrictions on financial capital flows between countries.
B) because of restrictions on labor flows between countries.
C) because people don't seek to move to countries that have high wages in the service sector.
D) because people don't act rationally when consuming services.

Question 46

In terms of relative incomes and productivity levels, a number of economies at different levels of industrialization, development, and material productivity a century ago have now _______.

A) converged
B) diverged
C) moved apart
D) gone their own ways

Question 47

Each of the following is included in the set of economies that have converged with the United States in terms of levels of productivity, economic structures, and standards of living except

A) Canada.
B) Mexico.
C) Japan.
D) France.

Question 48

Each of the following is included in the set of economies that have converged with the United States in terms of levels of productivity, economic structures, and standards of living except

A) Spain.
B) Italy.
C) Japan.
D) France.

Question 49

Each of the following is included in the set of economies that have converged with the United States in terms of levels of productivity, economic structures, and standards of living except

A) Canada.
B) Britain.
C) Japan.
D) Greece.

Question 50

Each of the following is included in the set of economies that have converged with the United States in terms of levels of productivity, economic structures, and standards of living except

A) Germany.
B) Argentina.
C) Italy.
D) Japan.

Question 51

Each of the following is included in the set of economic policies adopted by the OECD economies that have converged with the United States in terms of levels of productivity, economic structures, and standards of living except

A) large private sectors freed of government regulation of prices.
B) investment with its direction determined by profit-seeking businesses.
C) small social insurance systems to redistribute income.
D) governments committed to avoiding mass unemployment.

Question 52

Each of the following is included in the set of economic policies adopted by the OECD economies that have converged with the United States in terms of levels of productivity, economic structures, and standards of living except

A) industrial policy.
B) investment with its direction determined by profit-seeking businesses.
C) large social insurance systems to redistribute income.
D) governments committed to avoiding mass unemployment.

Question 53

Each of the following is included in the set of economic policies adopted by the OECD economies that have converged with the United States in terms of levels of productivity, economic structures, and standards of living except

A) large private sectors freed of government regulation of prices.
B) investment with its direction determined by profit-seeking businesses.
C) large social insurance systems to redistribute income.
D) governments uncommitted to avoiding mass unemployment.

Question 54

Each of the following is included in the set of economic policies adopted by the OECD economies that have converged with the United States in terms of levels of productivity, economic structures, and standards of living except

A) large private sectors freed of government regulation of prices.
B) investment with its direction determined by central planners.
C) large social insurance systems to redistribute income.
D) governments committed to avoiding mass unemployment.

Question 55

Each of the following is included in the set of economic policies adopted by the East Asian economies that are converging with the United States in terms of levels of productivity, economic structures, and standards of living except

A) small private sectors with government regulation of prices.
B) subsidizing corporations that are thought to be strategic for economic development.
C) less reliance on social insurance systems to redistribute income.
D) governments committed to avoiding mass unemployment.

Question 56

Each of the following is included in the set of economic policies adopted by the East Asian economies that are converging with the United States in terms of levels of productivity, economic structures, and standards of living except

A) large private sectors freed of government regulation of prices.
B) subsidizing corporations that are thought to be strategic for economic development.
C) less reliance on social insurance systems to redistribute income.
D) government policies to encourage low savings and investment rates.

Question 57

Each of the following is included in the set of economic policies adopted by the East Asian economies that are converging with the United States in terms of levels of productivity, economic structures, and standards of living except

A) large private sectors freed of government regulation of prices.
B) subsidizing corporations that are thought to be strategic for economic development.
C) resource allocation mainly determined by central planners.
D) government policies to encourage high savings and investment rates.

Question 58

Each of the following is included in the set of economic policies adopted by the East Asian economies that are converging with the United States in terms of levels of productivity, economic structures, and standards of living except

A) resource allocation mostly left to the market.
B) government policies to discourage entrepreneurship and enterprise.
C) less reliance on social insurance systems to redistribute income.
D) subsidizing corporations that are thought to be strategic for economic development.

Question 59

In comparison with similar countries, those that used to lie within the Iron Curtain have _________ and__________ for the poorer half of the population.

A) higher levels of GDP per capita; more inadequate social programs
B) lower levels of GDP per capita; more inadequate social programs
C) lower levels of GDP per capita; better social programs
D) higher levels of GDP per capita; better social programs

Question 60

The principal cause of the extraordinary variation in output per worker between countries today are

A) differences in their respective net export levels.
B) differences in their respective equilibrium capital-output ratios.
C) differences in their respective government debt-GDP ratios.
D) differences in their respective interest rate levels.

Question 61

Two secondary causes of the extraordinary variation in output per worker between countries today are

A) openness to creating and adapting technologies that enhance the efficiency of labor and the level of education today.
B) openness to free trade and the level of education today.
C) openness to democratic institutions and to creating and adapting technologies that enhance the
Efficiency of labor.
D )openness to creating and adapting technologies that enhance the efficiency of labor and reducing the role of government in the economy.

Question 62

A higher share of ________ in national product is powerfully correlated with relative levels of output per worker.

A) exports
B) imports
C) investment
D) consumption

Question 63

A higher share of ________ in national product is powerfully correlated with relative levels of output per worker.

A) exports
B) government
C) investment
D) consumption

Question 64

A higher share of ________ in national product is powerfully correlated with relative levels of output per worker.

A) exports
B) investment
C) money
D) consumption

Question 65

A high level of labor force growth is correlated with a ____ level of output per worker.

A) high
B) medium
C) very high
D) low

Question 66

The efficiency of labor is high where educational levels are ______ and where economic contact with the industrial core is _______.

A) high; low
B) low; high
C) high; high
D) low; low

Question 67

________ is the variable that has the strongest correlation with output per worker.

A) Schooling
B) Consumption
C) Exports
D) Labor force

Question 68

The indicators of a country's exposure to, and ability to adopt and adapt, the technologies invented in the industrial core that amplify the efficiency of labor include

A) trade and foreign investment.
B) geographical and climatic factors.
C) institutions of governance and their effect on entrepreneurship.
D) all of the above.

Question 69

Government policies that could be implemented to enhance economic growth include each of the following except

A) policies to boost national savings.
B) policies to boost stock market prices.
C) policies to improve the ability to translate savings into investment.
D) policies to accelerate the demographic transition.

Question 70

Policies that will tend to reduce savings include each of the following except

A) systems of economic governance in which profits are diverted into the hands of the political powerful through restrictions on entrepreneurship.
B) economic policies that divert the real returns from savings to financiers or the government through inflation.
C) persistent government deficits.
D) attempting to ensure that savers get reasonable rates of return.

Question 71

A policy that has the potential to boost investment for a given amount of savings would be

A) government subsidies to fund investment by business that are able to compete on the world market.
B) government subsidies to fund investment in any business that desires it.
C) imposing heavy tariffs on imported capital goods.
D) requiring scarce import licenses in order to purchase foreign-made capital goods.

Question 72

A policy that has the potential to boost investment for a given amount of savings would be

A) imposing heavy tariffs on imported capital goods.
B) government subsidies to fund investment in any business that desires it.
C) free-trade policies that allow businesses to freely earn and spend the foreign exchange needed to . purchase new generations of machinery and equipment.
D) requiring scarce import licenses in order to purchase foreign-made capital goods.

Question 73

A policy that has the potential to boost investment for a given amount of savings would be

A) imposing heavy tariffs on imported capital goods.
B) welcoming foreign investors' money.
C) government subsidies to fund investment in any business that desires it.
D) requiring scarce import licenses in order to purchase foreign-made capital goods.

Question 74

Without better technology, increases in capital stock produced by investment soon runs into

A) increasing returns.
B) obsolescence.
C) diminishing returns.
D) no returns.

Question 75

Productivity stagnates without improvements in the "technologies"of each of the following except

A) organization.
B) government.
C) education.
D) lifestyle.

Question 76

One of the main reasons that research and development is more complicated than other types of investment is that

A) research and development is a private good.
B) research and development is a private bad.
C) research and development is a public good.
D) research and development is a public bad.

Question 77

Technological progress has two components:

A) science and research and development that leads to successful innovation.
B) science and increases in the price of stock.
C) research and development and increasing the value of the financial sector.
D) successful innovation and new products.

Question 78

To say that a commodity is rival means

A) that it competes against other commodities.
B) that if one firm is using it, another firm cannot be using it.
C) that if one firm is using it, other firms may also use it.
D) all may use it simultaneously.

Question 79

To say that a commodity is excludible means that the owner of the commodity

A) can easily monitor who is using it and easily keep those whom he or she does not authorize from using it.
B) is excluded from using it.
C) is unable to exclude others from using it.
D) using seeks to exclude others from using it.

Question 80

Most physical commodities are (or with the assistance of the legal system can easily be made)

A) not rival and excludible.
B) rival but not excludible.
C) both rival and excludible.
D) excludible but not rival.