Question 1

Canada's population is 31 million and Japan's population is 126 million.Labor productivity in the two nations is the same.Hence, real GDP per person is ________ and real GDP is ________.

Accepted Answer

Since labor productivity is the same in both countries, real GDP per person would be the same. However, since Japan's population is much larger, their real GDP (total output) would be larger. Therefore, the answer is that real GDP per person is the same in Japan and Canada, but real GDP is larger in Japan.

Question 2

In recent years, Taiwan has experienced increases in savings and investment.As a result of the higher investment and saving, we expect i) increases in physical capital
Ii) increases in the inflation rate
Iii) advances in technology

Accepted Answer

Higher savings and investment lead to increases in physical capital as well as advances in technology. They do not necessarily lead to an increase in the inflation rate. Therefore, options i and iii are correct, and option ii is incorrect. The only option that includes both i and iii is option A.

Question 3

Workers in the United States are ________ productive than workers in China because ________.

Accepted Answer

Workers in the United States are more productive than workers in China because workers in the U.S. have more capital per worker. This means that workers in the U.S. have access to more equipment, tools, and technology, which increases their productivity.

Question 4

Which of the following are required for economic growth?
i. more goods and services produced per hour of work
ii. an increase in the average hours of labor per person
iii. an increase in prices

Accepted Answer

Economic growth is achieved when there is an increase in the production of goods and services per hour of work, as indicated by i. Also, an increase in the average hours of labor per person, indicated by ii, can boost economic growth. On the other hand, an increase in prices, indicated by iii, might not necessarily result in economic growth as it could also lead to inflation.

Question 5

A reason for an increase in labor productivity growth is

Accepted Answer

An increase in people's human capital, such as through education and training, can lead to them being able to produce more output in a given amount of time, thus increasing labor productivity growth. None of the other options listed would necessarily lead to an increase in labor productivity growth.

Question 6

Human capital is defined as the

Accepted Answer

Human capital is the accumulated skill and knowledge of human beings. It refers to the education, experience, and training of individuals that make them productive in the workforce. It is different from physical capital, which refers to physical assets such as machinery and factories. Therefore, option C is the best choice.

Question 7

If the stock of physical capital (that is machinery, equipment, etc.) and human capital remain the same and the population increases, then

Accepted Answer

If the stock of physical and human capital remains same and population increases then labor productivity will decrease. This could be due to the dilution of human capital, increased competition for jobs and reduction in investment per worker. As a result, the standard of living could also decrease. Real GDP could either increase or decrease, depending on the extent to which the increase in population is offset by changes in labor productivity.

Question 8

Labor productivity growth depends on i. saving and investment.
Ii) increases in human capital.
Iii) technological growth.

Accepted Answer

Labor productivity growth depends on all three factors: saving and investment, increases in human capital, and technological growth. Saving and investment allow for the acquisition of capital goods that can increase productivity, while increases in human capital through education and training can also lead to more skilled and productive workers. Technological growth, such as the development of new machinery or software, can also greatly enhance productivity. All of these factors work together to drive increases in labor productivity over time.

Question 9

Sustained increases in real GDP per person depend on

Accepted Answer

Sustained increases in real GDP per person depend on increases in labor productivity, meaning the amount of output produced per hour of work. Increasing the quantity of labor (A) or population (B) can temporarily boost output, but not in the long run without corresponding increases in productivity. Increasing average hours (C) can increase output in the short term, but is not sustainable or desirable in the long run. Decreases in labor productivity (E) would lead to a decrease in real GDP per person.

Question 10

An increase in labor productivity

Accepted Answer

An increase in labor productivity means that workers are able to produce more output per hour of work. This usually leads to increased profits for firms, which can then be passed on to workers in the form of higher wages or to consumers in the form of lower prices. As a result, the standard of living for both workers and consumers can increase.

Question 11

Real GDP is $700 billion, average hours worked per week is 42 and aggregate hours 150 billion hours.What is the economy's labor productivity?

Accepted Answer

The answer of Real GDP is $700 billion, average hours...

Question 12

The quantity of real GDP produced by one hour of labor is defined as

Accepted Answer

The quantity of real GDP produced by one hour of labor is defined as labor productivity.

Question 13

If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is 170 billion hours, labor productivity is

Accepted Answer

Labor productivity is calculated as real GDP/aggregate hours. 
Therefore, Labor productivity = $6,460 billion/ 170 billion hours = $38.00 an hour.

Question 14

If labor productivity is $30 per hour and there are 300 billion hours worked in a year's time, what is real GDP?

Accepted Answer

Real GDP is calculated by multiplying labor productivity by the total number of hours worked in a year. In this case, real GDP = $30 per hour × 300 billion hours = $9,000 billion. Therefore, the correct answer is B.

Question 15

Human capital refers to the

Accepted Answer

Human capital refers to the knowledge, skills, and abilities that individuals possess and can use to create economic value. This includes education, training, experience, and expertise. It does not refer to physical equipment, money, or financial capital.

Question 16

Increases in human capital can come

Accepted Answer

Increases in human capital can come from both formal education, such as attending school or training programs, and on-the-job learning, such as gaining experience and skills through work. Employing more machinery (choice B) may increase productivity but does not necessarily increase human capital. Choice A and E are too extreme and do not account for the potential of individuals to develop and improve their skills and knowledge. Choice C is also too limiting, as human capital can be gained through a variety of methods, not just on-the-job experience.

Question 17

Labor productivity is calculated as

Accepted Answer

Labor productivity is calculated by dividing real GDP (output) by aggregate hours worked (input). It shows how much output is produced per unit of input (labor).

Question 18

The widespread adoption of computers in the workplace has likely lead to

Accepted Answer

Computers are a form of capital goods that can be used to increase the efficiency and productivity of workers. With the aid of computers, workers can perform tasks faster, more accurately, and with greater precision. Therefore, the widespread adoption of computers in the workplace has led to an increase in labor productivity.

Question 19

Last year, in a nation far to the South, real GDP was $90 million and 900,000 workers were employed.This year real GDP is $100 million, 950,000 workers are employed, and the number of hours each worker works per year did not change.Hence, labor productivity

Accepted Answer

Labor productivity is measured as real GDP per worker. Since real GDP increased while the number of workers remained roughly the same, labor productivity must have increased.

Question 20

Labor force productivity has increased from $30 per hour to $32 per hour over the past year. This could result from

Accepted Answer

Labor force productivity can increase due to an increase in real GDP with no change in the aggregate hours worked or a decrease in aggregate hours worked with no change in real GDP. For example, if technological advancements or an increase in capital investment leads to workers being able to produce more output in the same amount of time, labor productivity can increase without an increase in the number of hours worked. Similarly, if there are layoffs or workers voluntarily reduce their hours or take a leave of absence, labor productivity can increase without an increase in real GDP.

Quiz 9: Economic Growth

Canada's population is 31 million and Japan's population is 126 million.Labor productivity in the two nations is the same.Hence, real GDP per person is and real GDP is .

In recent years, Taiwan has experienced increases in savings and investment.As a result of the higher investment and saving, we expect i) increases in physical capital Ii) increases in the inflation rate Iii) advances in technology

Workers in the United States are productive than workers in China because .

Which of the following are required for economic growth? i. more goods and services produced per hour of work ii. an increase in the average hours of labor per person iii. an increase in prices