Question 1

All of the following are sources of economic growth except

Accepted Answer

An increase in consumption spending does not directly stimulate production and is not considered a source of economic growth. Rather, it may lead to short-term increases in demand and production but can also lead to inflation and other long-term negative effects on the economy. Increases in human capital (A), an increase in the savings rate (B), and increases in physical capital (D) are all recognized sources of economic growth.

Question 2

Which of the following will not increase the productivity of labor?

Accepted Answer

An increase in the size of the labor force may actually decrease productivity as there may not be enough resources for each worker and coordination may become more difficult. Technological improvements, an increase in the capital stock, and improvements in education all have the potential to increase productivity.

Question 3

Investment in human capital

Accepted Answer

Investment in human capital, such as education and training, increases the productivity and efficiency of workers, which leads to an upward shift in the aggregate production function. This means that the economy can produce more goods and services with the same amount of inputs, including labor, resulting in economic growth and increased demand for labor.

Question 4

Which of the following events would be most likely to increase an economy's potential output?

Accepted Answer

An improvement in technology can increase the efficiency and productivity of an economy, leading to an increase in potential output. The other choices listed would not directly impact potential output in the same way.

Question 5

Which of the following will not increase labor's productivity?

Accepted Answer

Growth in output may not necessarily increase labor's productivity. It may only indicate an increase in the quantity of output, not necessarily an improvement in efficiency or effectiveness in the use of labor. Choices A, B, and C can all contribute to increasing labor's productivity by improving their skills, providing better tools or machinery, and enhancing the production process.

Question 6

Which of the following factors contribute to economic growth?

Accepted Answer

The answer of Which of the following factors contribute to...

Question 7

A factor critical to economic growth is

Accepted Answer

Technological change that increases labor productivity is critical to economic growth as it allows for increased efficiency in production and thus increased output. This can lead to higher profits for businesses and higher wages for workers, which in turn can stimulate consumption and further economic growth. Increased saving rates and reduced dependence on imports can also contribute to economic growth, but they are not as essential as technological change in driving long-term economic growth. Increased human consumption, on the other hand, can actually be detrimental to economic growth if it leads to overconsumption and a depletion of resources.

Question 8

What is the opportunity cost of allocating more and more resources to the production of capital goods?

Accepted Answer

Allocating more resources to the production of capital goods means less resources available for the production of consumption goods. Therefore, the opportunity cost is the amount of consumption goods that could have been produced.

Question 9

During the industrial revolution, the United States saw increases in the demand for labor and increases in the supply of labor.The increase in real wages rose during this period is consistent with which of the following statements?

Accepted Answer

An increase in real wages during a period of increased demand for labor and increased supply of labor indicates that the rightward shift in the labor demand curve was greater than the rightward shift in the labor supply curve. The higher demand for labor would result in an increase in the equilibrium wage rate and quantity of labor, whereas the increase in labor supply would have a dampening effect on the wage rate but would still result in an overall increase in employment.

Question 10

Economic growth can be modeled as
I.an outward shift of the economy's production possibilities curve.
II.a rightward shift of the economy's long-run aggregate supply curve.
III.a rightward shift of the labor demand and the labor supply curves.
IV.a downward shift of the economy's aggregate production function.

Accepted Answer

Option I is correct because economic growth leads to an increase in the economy's potential output, which shifts the PPC curve outward. Option II is correct because economic growth increases the economy's capacity to produce goods and services in the long run, leading to a rightward shift in the LAS curve. Option III is correct because economic growth creates more jobs, so both labor demand and labor supply curves shift rightward. However, option IV is incorrect because economic growth leads to an upward shift, not a downward shift, in the aggregate production function.

Question 11

The determinants of economic growth include all of the following except

Accepted Answer

Growth in money supply may lead to inflation but is not a determinant of long-term economic growth. The other options, technological improvement, growth in physical capital, and growth in human capital, are all key factors in promoting economic growth.

Question 12

Shifts to the right in the long-run aggregate supply curve are the result of

Accepted Answer

Shifts to the right in the long-run aggregate supply curve are the result of upward shifts in the production function, which means that firms are able to produce more output with the same amount of inputs, or they can produce the same amount of output with fewer inputs. This may be due to technological advancements, improvements in education and training, or other factors that increase productivity. Increases in aggregate demand, decreases in the supply of labor, and reductions in the demand for labor may affect short-run aggregate supply, but they do not cause long-run shifts in the aggregate supply curve.

Question 13

Which of the following occurred during the industrial revolution in the United States?
I.More and more firms shifted toward mass production and automation.
II.More and more firms substituted capital investment and technology for labor, leading to a decrease in the demand for labor.
III.Technological change and capital investment displaced workers in some industries, although for the economy as a whole, the demand for labor increased.

Accepted Answer

During the industrial revolution in the United States, more and more firms shifted toward mass production and automation, and technological change and capital investment displaced workers in some industries. However, for the economy as a whole, the demand for labor increased as new industries emerged and production expanded. This is reflected in options I and III, making choice C the correct answer. Option II is incorrect, as it implies a decrease in overall demand for labor, which is not true.

Question 14

During the industrial revolution, technological changes, capital investment, and the number of workers employed all increased.What must be true about capital and labor?

Accepted Answer

The fact that capital investment and the number of workers employed both increased suggests that they are complementary inputs in production. This means that they are used together to produce goods and services, with each input enhancing the productivity of the other.

Question 15

Which of the following is a cost of economic growth?

Accepted Answer

Economic growth often requires investment, which can mean sacrificing current consumption to save and invest for future growth.

Question 16

Economic growth occurs when

Accepted Answer

Economic growth occurs when a nation's capacity to produce increases through technological advancements and/or increases in factors of production (capital, labor, and natural resources). B and D could be outcomes of economic growth, but they do not necessarily indicate growth in and of themselves. A is incorrect because nominal GDP can increase due to inflation, which does not necessarily indicate economic growth.

Question 17

The determinants of economic growth include all of the following except

Accepted Answer

A stable price level is not a determinant of economic growth. The other choices, namely technological improvement, improvements in the quality of factors of production, and increases in the quantity of factors of production, are all factors that contribute to economic growth.

Question 18

During the industrial revolution (the period between the Civil War and World War I)
, the United States had a massive influx of working age immigrants.What happens in the labor market?

Accepted Answer

With a massive influx of working age immigrants, the supply of labor curve will shift to the right. This means that there are more workers available in the labor market, which typically leads to downward pressure on wages and potentially higher unemployment rates. The demand for labor curve may or may not shift, depending on factors such as economic growth and technological advancements during this time period.

Question 19

Economic growth can be achieved through

Accepted Answer

Economic growth can be achieved through an increase in the production of capital goods, which are goods used to produce other goods and services. When there are more capital goods available, more goods and services can be produced, leading to economic growth. Decreasing the supply of labor or labor force participation rate would decrease production and hinder economic growth. A reduction in expenditures on research and development would limit opportunities for innovation and technological advancement, which can also hinder economic growth.

Question 20

For a given level of technology, a higher rate of economic growth can probably be achieved only if a country's citizens are prepared to

Accepted Answer

Economic growth requires investment in capital goods such as factories, equipment, and technology, which allow for greater production in the future. This typically requires sacrificing some present consumption to invest in these capital goods. Thus, a higher rate of economic growth can probably be achieved only if a country's citizens are prepared to sacrifice some present consumption.

Quiz 8: Economic Growth

All of the following are sources of economic growth except

Which of the following will not increase the productivity of labor?

Investment in human capital

Which of the following events would be most likely to increase an economy's potential output?

Which of the following will not increase labor's productivity?

Which of the following factors contribute to economic growth?

A factor critical to economic growth is

What is the opportunity cost of allocating more and more resources to the production of capital goods?

During the industrial revolution, the United States saw increases in the demand for labor and increases in the supply of labor.The increase in real wages rose during this period is consistent with which of the following statements?

The determinants of economic growth include all of the following except

Shifts to the right in the long-run aggregate supply curve are the result of

During the industrial revolution, technological changes, capital investment, and the number of workers employed all increased.What must be true about capital and labor?

Which of the following is a cost of economic growth?

Economic growth occurs when

The determinants of economic growth include all of the following except

During the industrial revolution (the period between the Civil War and World War I) , the United States had a massive influx of working age immigrants.What happens in the labor market?

Economic growth can be achieved through

For a given level of technology, a higher rate of economic growth can probably be achieved only if a country's citizens are prepared to