Question 1

The rise in average living standards experienced by most industrialized countries:

Accepted Answer

A)  has been continuous over the course of human history. 
B)  was more rapid before 1870 than after 1870. 
C)  has been more rapid since 1950 than before 1950. 
D)  has resulted primarily from an increase in population worldwide. 
A)  has been continuous over the course of human history. 
B)  was more rapid before 1870 than after 1870. 
C)  has been more rapid since 1950 than before 1950. 
D)  has resulted primarily from an increase in population worldwide. C

Question 2

Entrepreneurs are people who:

Accepted Answer

A)  engage exclusively in business travel. 
B)  entertain the workers. 
C)  run businesses on a day-to-day basis. 
D)  create new economic enterprises. 
A)  engage exclusively in business travel. 
B)  entertain the workers. 
C)  run businesses on a day-to-day basis. 
D)  create new economic enterprises. D

Question 3

Suppose when you are 21 years old, you deposit $1,000 into a bank account that pays annual compound interest, and you do not withdraw from the account until your retirement at the age of 65, 44 years later. How much more will be in your account if the interest rate is 6 percent rather than 4 percent?

Accepted Answer

A)  $880 
B)  $2,390 
C)  $5,617 
D)  $7,368 
A)  $880 
B)  $2,390 
C)  $5,617 
D)  $7,368 D

Question 4

Managers contribute to increased average labor productivity in each of the following ways EXCEPT by:

Accepted Answer

A)  developing new products. 
B)  obtaining financing. 
C)  assigning workers to jobs. 
D)  dealing with suppliers. 
A)  developing new products. 
B)  obtaining financing. 
C)  assigning workers to jobs. 
D)  dealing with suppliers.

Question 5

If you left $2,500 on deposit with a bank promising to pay you a 6 percent compound annual rate of interest, then after 50 years your deposit would be worth approximately:

Accepted Answer

A)  $2,800 
B)  $18,420 
C)  $46,050 
D)  $250,750 
A)  $2,800 
B)  $18,420 
C)  $46,050 
D)  $250,750

Question 6

The growth of real GDP per person in the United States between 1960 and 2008 was the result of:

Accepted Answer

A)  growth in average labor productivity only. 
B)  growth in the share of population employed only. 
C)  growth in both average labor productivity and the share of population employed. 
D)  neither the growth in average labor productivity nor the share of population employed. 
A)  growth in average labor productivity only. 
B)  growth in the share of population employed only. 
C)  growth in both average labor productivity and the share of population employed. 
D)  neither the growth in average labor productivity nor the share of population employed.

Question 7

At the time it collapsed in 1991, the Soviet Union possessed all of the factors that promote increases in economic growth EXCEPT:

Accepted Answer

A)  a highly educated worker force. 
B)  a large stock of capital. 
C)  abundant natural resources. 
D)  a political and legal environment that promoted economic productivity. 
A)  a highly educated worker force. 
B)  a large stock of capital. 
C)  abundant natural resources. 
D)  a political and legal environment that promoted economic productivity.

Question 8

Developing new products and services as well as introducing new production methods are among the ways that ______ increases average labor productivity.

Accepted Answer

A)  human capital 
B)  physical capital 
C)  an entrepreneur 
D)  a manager 
A)  human capital 
B)  physical capital 
C)  an entrepreneur 
D)  a manager

Question 9

If real GDP per person in a country equals $40,000 and 60 percent of the population is employed, then average labor productivity equals:

Accepted Answer

A)  $24,000. 
B)  $40,000. 
C)  $60,000. 
D)  $66,667. 
A)  $24,000. 
B)  $40,000. 
C)  $60,000. 
D)  $66,667.

Question 10

Real GDP per person in both Alpha and Omega is equal to $2,000. Over the next 100 years, real GDP per person grows at a 1 percent annual rate in Alpha and at a 2 percent annual rate in Omega. After 100 years, real GDP per person in Alpha is ______ smaller than real GDP per person in Omega.

Accepted Answer

A)  $2,000 
B)  $5,410 
C)  $9,080 
D)  $11,080 
A)  $2,000 
B)  $5,410 
C)  $9,080 
D)  $11,080

Question 11

More economic growth is not necessarily better unless the benefits of growth:

Accepted Answer

A)  exceed the costs of growth. 
B)  increase average labor productivity. 
C)  increase real GDP per capita. 
D)  increase human capital. 
A)  exceed the costs of growth. 
B)  increase average labor productivity. 
C)  increase real GDP per capita. 
D)  increase human capital.

Question 12

To increase future living standards by pursuing higher current rates of investment spending, an economy must:

Accepted Answer

A)  allow higher rates of current consumption. 
B)  reduce current rates of consumption spending. 
C)  reduce the current capital stock. 
D)  decrease the amount of future research and development spending. 
A)  allow higher rates of current consumption. 
B)  reduce current rates of consumption spending. 
C)  reduce the current capital stock. 
D)  decrease the amount of future research and development spending.

Question 13

Bank C promises to pay a compound annual interest rate of 6 percent, while Bank S pays an 8 percent simple annual interest rate on deposits. If you deposit $1,000 in each bank, after 10 years, your deposit in Bank C equals _____, while your deposit in Bank S equals ______.

Accepted Answer

A)  $1,060; $1,800 
B)  $1,600; $1,800 
C)  $1,600; $2,159 
D)  $1,791; $1,800 
A)  $1,060; $1,800 
B)  $1,600; $1,800 
C)  $1,600; $2,159 
D)  $1,791; $1,800

Question 14

Real GDP per person can increase:

Accepted Answer

A)  only if the share of the population employed increases. 
B)  only if the share of the population employed decreases. 
C)  only if average labor productivity increases. 
D)  if the share of population employed and/or average labor productivity increases. 
A)  only if the share of the population employed increases. 
B)  only if the share of the population employed decreases. 
C)  only if average labor productivity increases. 
D)  if the share of population employed and/or average labor productivity increases.

Question 15

Entrepreneurs contribute to increased average labor productivity in each of the following ways EXCEPT by:

Accepted Answer

A)  introducing new production methods. 
B)  implementing new technological processes. 
C)  developing new products. 
D)  assigning workers to jobs. 
A)  introducing new production methods. 
B)  implementing new technological processes. 
C)  developing new products. 
D)  assigning workers to jobs.

Question 16

The key indicator of a country's living standard and economic well-being is:

Accepted Answer

A)  the interest rate. 
B)  nominal GDP per person. 
C)  real GDP. 
D)  real GDP per person. 
A)  the interest rate. 
B)  nominal GDP per person. 
C)  real GDP. 
D)  real GDP per person.

Question 17

Which of the following is an example of an investment in physical capital?

Accepted Answer

A)  A firm trains workers to operate new machinery. 
B)  A firm pays for workers to take college classes. 
C)  A chemical firm employs chemists to develop new chemicals. 
D)  A firm purchases new equipment for a manufacturing process. 
A)  A firm trains workers to operate new machinery. 
B)  A firm pays for workers to take college classes. 
C)  A chemical firm employs chemists to develop new chemicals. 
D)  A firm purchases new equipment for a manufacturing process.

Question 18

When new technologies are applied to the production and distribution of goods and services:

Accepted Answer

A)  scarcity is eliminated. 
B)  diminishing returns to capital no longer hold. 
C)  diminishing returns to capital still hold. 
D)  average labor productivity decreases. 
A)  scarcity is eliminated. 
B)  diminishing returns to capital no longer hold. 
C)  diminishing returns to capital still hold. 
D)  average labor productivity decreases.

Question 19

Mike and Tom debone chicken breasts for Ted's Chicken Co. Mike is new and can only debone 60 chicken breasts per hour by hand, while Tom's experience allows him to debone 120 chicken breasts per hour by hand. Ted buys one new machine that can debone 100 chicken breasts per hour. Both Mike and Tom work the same 40 hours per week, but one of them is assigned to operate the machine instead of deboning the chicken breasts by hand. To obtain maximum average hourly productivity, ______ is assigned to use the machine and their combined average hourly productivity as a team is ______ chicken breasts.

Accepted Answer

A)  Mike; 80 
B)  Mike; 110 
C)  Tom; 80 
D)  Tom; 110 
A)  Mike; 80 
B)  Mike; 110 
C)  Tom; 80 
D)  Tom; 110

Question 20

If the share of population employed in two countries is the same, average living standards will be higher in the country with:

Accepted Answer

A)  the smaller population. 
B)  the larger population. 
C)  higher average labor productivity. 
D)  lower average labor productivity. 
A)  the smaller population. 
B)  the larger population. 
C)  higher average labor productivity. 
D)  lower average labor productivity.

The rise in average living standards experienced by most industrialized countries:

Entrepreneurs are people who:

Managers contribute to increased average labor productivity in each of the following ways EXCEPT by:

If you left $2,500 on deposit with a bank promising to pay you a 6 percent compound annual rate of interest, then after 50 years your deposit would be worth approximately:

The growth of real GDP per person in the United States between 1960 and 2008 was the result of:

At the time it collapsed in 1991, the Soviet Union possessed all of the factors that promote increases in economic growth EXCEPT:

Developing new products and services as well as introducing new production methods are among the ways that ______ increases average labor productivity.

If real GDP per person in a country equals $40,000 and 60 percent of the population is employed, then average labor productivity equals:

Real GDP per person in both Alpha and Omega is equal to $2,000. Over the next 100 years, real GDP per person grows at a 1 percent annual rate in Alpha and at a 2 percent annual rate in Omega. After 100 years, real GDP per person in Alpha is ______ smaller than real GDP per person in Omega.

More economic growth is not necessarily better unless the benefits of growth:

To increase future living standards by pursuing higher current rates of investment spending, an economy must:

Bank C promises to pay a compound annual interest rate of 6 percent, while Bank S pays an 8 percent simple annual interest rate on deposits. If you deposit $1,000 in each bank, after 10 years, your deposit in Bank C equals _, while your deposit in Bank S equals __.

Real GDP per person can increase:

Entrepreneurs contribute to increased average labor productivity in each of the following ways EXCEPT by:

The key indicator of a country's living standard and economic well-being is:

Which of the following is an example of an investment in physical capital?

When new technologies are applied to the production and distribution of goods and services:

If the share of population employed in two countries is the same, average living standards will be higher in the country with:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Macroeconomics: the Birds-Eye View of the Economy

Measuring Economic Activity: Gdp and Unemployment

Measuring the Price Level and Inflation

Workers, Wages, and Unemployment

Saving and Capital Formation

Money, Prices, and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economics Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: the Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Filters

Exam 7: Economic Growth, Productivity, and Living Standards

The rise in average living standards experienced by most industrialized countries:

Entrepreneurs are people who:

Managers contribute to increased average labor productivity in each of the following ways EXCEPT by:

If you left $2,500 on deposit with a bank promising to pay you a 6 percent compound annual rate of interest, then after 50 years your deposit would be worth approximately:

The growth of real GDP per person in the United States between 1960 and 2008 was the result of:

At the time it collapsed in 1991, the Soviet Union possessed all of the factors that promote increases in economic growth EXCEPT:

Developing new products and services as well as introducing new production methods are among the ways that ______ increases average labor productivity.

If real GDP per person in a country equals $40,000 and 60 percent of the population is employed, then average labor productivity equals:

Real GDP per person in both Alpha and Omega is equal to $2,000. Over the next 100 years, real GDP per person grows at a 1 percent annual rate in Alpha and at a 2 percent annual rate in Omega. After 100 years, real GDP per person in Alpha is ______ smaller than real GDP per person in Omega.

More economic growth is not necessarily better unless the benefits of growth:

To increase future living standards by pursuing higher current rates of investment spending, an economy must:

Bank C promises to pay a compound annual interest rate of 6 percent, while Bank S pays an 8 percent simple annual interest rate on deposits. If you deposit $1,000 in each bank, after 10 years, your deposit in Bank C equals _____, while your deposit in Bank S equals ______.

Real GDP per person can increase:

Entrepreneurs contribute to increased average labor productivity in each of the following ways EXCEPT by:

The key indicator of a country's living standard and economic well-being is:

Which of the following is an example of an investment in physical capital?

When new technologies are applied to the production and distribution of goods and services:

If the share of population employed in two countries is the same, average living standards will be higher in the country with:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Macroeconomics: the Birds-Eye View of the Economy

Measuring Economic Activity: Gdp and Unemployment

Measuring the Price Level and Inflation

Workers, Wages, and Unemployment

Saving and Capital Formation

Money, Prices, and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economics Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: the Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Filters

Bank C promises to pay a compound annual interest rate of 6 percent, while Bank S pays an 8 percent simple annual interest rate on deposits. If you deposit $1,000 in each bank, after 10 years, your deposit in Bank C equals _, while your deposit in Bank S equals __.