Question 1

The per capita GDP for Hungary in 2011 was $12,000 and in 2012 was $12,360. How much did the economy grow in 2012?
A) 97 percent
B) 3 percent
C) 2 percent
D) 1 percent

Accepted Answer

The growth rate is calculated as ((12,360 - 12,000) / 12,000) * 100 = 3 percent.

Question 2

Suppose a country experiences an increase in output per worker. Such a development represents which of the following?
A) a decrease in economic growth
B) an increase in labor productivity
C) a reduction in the saving rate
D) an increase in population growth

Accepted Answer

An increase in output per worker signifies an increase in labor productivity, which is a key factor in economic growth. A decrease in economic growth, reduction in saving rate, or increase in population growth does not necessarily correlate with an increase in output per worker.

Question 3

Labor productivity increases when
A) the average number of hours people work goes up.
B) the unemployment rate decreases.
C) the average output produced per worker during a specified time period increases.
D) the average output produced per worker during a specified time period decreases.

Accepted Answer

Labor productivity is a measure of the amount of output produced per unit of labor input. Therefore, labor productivity increases when the average output produced per worker during a specified time period increases.

Question 4

The majority of evidence points to the fact that, in the last decade in the United States, labor productivity has
A) decreased.
B) increased.
C) stayed the same.
D) decreased in the manufacturing sector but increased in the service sector.

Accepted Answer

According to the Bureau of Labor Statistics, labor productivity in the United States has increased in the last decade. From 2009 to 2019, labor productivity increased at an average annual rate of 1.3%, which is slightly higher than the long-term average of 1.2%. This is due to various factors, such as advancements in technology, increased capital investment, and improvements in management practices.

Question 5

A constant rate of U.S. economic growth over a given period of years would involve
A) adding the same amount of nominal dollars to real GDP per capita each year.
B) adding the same amount of real dollars to real GDP per capita each year.
C) compounding the percentage increase in real GDP per capita over the years.
D) None of the above are correct.

Accepted Answer

A constant rate of economic growth involves compounding the percentage increase in real GDP per capita over the years. Option A and B suggest a fixed amount of nominal or real dollars added each year, which does not necessarily guarantee constant growth rate.

Question 6

Labor productivity rises when
A) average worker output falls.
B) business investment falls.
C) average worker output rises.
D) nominal wages fall.

Accepted Answer

Labor productivity is the amount of output produced per unit of labor input. When average worker output rises, it means that more output is being produced per unit of labor input, resulting in an increase in labor productivity. The other options would not lead to an increase in labor productivity.

Question 7

Productivity relates to
A) working harder over time.
B) working longer over time.
C) producing the same output with fewer labor hours.
D) producing the same output with more labor hours.

Accepted Answer

Productivity is the measure of how efficiently a firm converts inputs (such as labor hours, capital, and materials) into outputs (such as goods or services). Improving productivity means producing the same output with fewer resources or producing more output with the same resources. Therefore, option C is the best choice as it shows that the firm is producing the same output with fewer labor hours, which implies an increase in productivity.

Question 8

Which of the following will cause an increase in economic growth?
A) an increase in human capital
B) a reduction in the stock of physical capital
C) a reduction in the unemployment rate
D) a reduction in labor force participation

Accepted Answer

The answer of Which of the following will cause an...

Question 9

If population growth is greater than the growth of real output,
A) real per capita Gross Domestic Product (GDP) growth will be less than the growth of real Gross Domestic Product (GDP).
B) the production possibilities curve is shifting to the left.
C) real per capita Gross Domestic Product (GDP) growth will be greater than the growth of real Gross Domestic Product (GDP).
D) real per capita Gross Domestic Product (GDP) and real Gross Domestic Product (GDP) will be growing at the same rate.

Accepted Answer

When the population growth is greater than the growth of real output, the resources available per person decrease, leading to a decrease in real per capita Gross Domestic Product (GDP) growth. As a result, real per capita GDP growth will be less than the growth of real Gross Domestic Product (GDP).

Question 10

Labor productivity can best be calculated as
A) real Gross Domestic Product (GDP) / Gross Domestic Product (GDP) price index.
B) real Gross Domestic Product (GDP) / number of workers.
C) number of workers / hours of work.
D) real wages / hours of work.

Accepted Answer

Labor productivity is calculated by dividing the real Gross Domestic Product (GDP) by the number of workers. This gives us a measure of output per worker, which helps us understand the efficiency of the labor force in generating economic output. Choice A is the calculation for the GDP price deflator, which is a measure of inflation. Choice C is the calculation for labor intensity, which is a measure of the amount of labor required to produce a given level of output. Choice D is the calculation for real hourly wages, which is a measure of the purchasing power of workers' wages.

Question 11

Economic growth can be defined as
A) the rate of growth in the productivity of labor.
B) the rate of growth in the productivity of capital.
C) the rate of growth of labor plus the rate of depreciation of capital.
D) the rate of growth of labor plus the rate of growth of capital plus the rate of growth in the productivity of labor and capital.

Accepted Answer

Economic growth can be defined as the increase in the production of goods and services in an economy. This is achieved through a combination of factors, including growth in the labor force, growth in capital stock, increases in productivity of labor and capital, and technological advancements. Therefore, the rate of growth of labor plus the rate of growth of capital plus the rate of growth in the productivity of labor and capital is the most comprehensive definition of economic growth.

Question 12

What is economic growth and why are growth rates so important?

Accepted Answer

The answer of What is economic growth and why are...

Question 13

The most important thing about higher labor productivity is that it means
A) we are doing better than anyone else is.
B) we can compete well with other nations.
C) we can achieve a happier population.
D) we can have a higher standard of living.

Accepted Answer

Higher labor productivity means that we are able to produce more goods and services with the same amount of resources, which leads to higher profits and higher wages. This, in turn, leads to a higher standard of living for individuals and can improve the overall economy.

Question 14

What are the shortcomings of using changes in per capita real GDP to measure economic growth?

Accepted Answer

The answer of What are the shortcomings of using changes...

Question 15

"There is a direct relationship between economic growth rates and the wealth of a nation." Do you agree or disagree? Why?

Accepted Answer

The answer of "There is a direct relationship between economic...

Question 16

Labor productivity is
A) the average amount produced times the number of workers.
B) the average amount produced times the number of people in the labor force.
C) the average amount produced per worker.
D) the rate of change in the total amount produced per worker.

Accepted Answer

Labor productivity is calculated as the average amount produced per worker. This is because it measures how efficient each worker is at producing goods or services, rather than just counting the number of workers or total amount produced.

Question 17

Which of the following variables can be used to measure labor productivity?
A) real GDP
B) number of workers
C) number of labor hours
D) all of the above

Accepted Answer

Labor productivity is measured by the output per labor input, which can include real GDP (output) per worker or per labor hour. Thus, all the options provided (real GDP, number of workers, and number of labor hours) are variables that can be used to measure labor productivity.

Question 18

Which resource is the main contributor to economic growth in the United States, Latin America, and South Asia?
A) growth in physical capital
B) growth in human capital (education)
C) growth in labor
D) growth in land

Accepted Answer

The answer of Which resource is the main contributor to...

Question 19

Labor productivity is computed as
A) per capita real GDP divided by the number of workers.
B) real GDP divided by population.
C) per capita real GDP divided by population.
D) real GDP divided by the number of workers.

Accepted Answer

Labor productivity is measured by the amount of output (real GDP) produced per unit of labor (number of workers). Therefore, the correct formula for labor productivity is real GDP divided by the number of workers. Option D displays this calculation.

Question 20

When economic growth is compared between countries, the best measure to use is
A) nominal GDP.
B) real GDP.
C) chain-weighted GDP.
D) real GDP per capita.

Accepted Answer

Real GDP per capita is the best measure to use when comparing economic growth between countries because it takes into account the size of the population. Nominal GDP does not adjust for inflation and does not account for changes in population size. Real GDP adjusts for inflation but still does not account for changes in population size. Chain-weighted GDP adjusts for changes in the composition of an economy but does not take into account population size.

Quiz 9: Global Economic Growth and Development

The per capita GDP for Hungary in 2011 was $12,000 and in 2012 was $12,360. How much did the economy grow in 2012?

Suppose a country experiences an increase in output per worker. Such a development represents which of the following?

Labor productivity increases when

The majority of evidence points to the fact that, in the last decade in the United States, labor productivity has

A constant rate of U.S. economic growth over a given period of years would involve

Labor productivity rises when

Productivity relates to

Which of the following will cause an increase in economic growth?

If population growth is greater than the growth of real output,

Labor productivity can best be calculated as

Economic growth can be defined as

What is economic growth and why are growth rates so important?

The most important thing about higher labor productivity is that it means

What are the shortcomings of using changes in per capita real GDP to measure economic growth?

"There is a direct relationship between economic growth rates and the wealth of a nation." Do you agree or disagree? Why?

Labor productivity is

Which of the following variables can be used to measure labor productivity?

Which resource is the main contributor to economic growth in the United States, Latin America, and South Asia?

Labor productivity is computed as

When economic growth is compared between countries, the best measure to use is