Question 1

"The most important factor in determining a nation's standard of living in the long run is the productivity of its resources."

Accepted Answer

A) True 
 B)False

Question 2

A possible downside of industrial policy is that

Accepted Answer

A) the government cannot be trusted to identify emerging technologies 
B) markets allocate scarce resources better than governments do 
C) it could evolve into a government giveaway program 
D) money and competitive advantages could go to the politically connected 
E) All of the answers are correct 
A) the government cannot be trusted to identify emerging technologies 
B) markets allocate scarce resources better than governments do 
C) it could evolve into a government giveaway program 
D) money and competitive advantages could go to the politically connected 
E) All of the answers are correct

Question 3

Exhibit 8-1  
-In Exhibit 8-1,Tasmania is currently operating at point A on the per-worker production function.A war that destroys half of Tasmania's capital stock without diminishing the workforce will result in a movement from A to

Accepted Answer

A) B 
B) D 
C) E 
D) F 
E) G 
A) B 
B) D 
C) E 
D) F 
E) G

Question 4

The difference between basic and applied research is that

Accepted Answer

A) basic research does not promote resource productivity while applied research does 
B) applied research does not promote resource productivity while basic research does 
C) basic research has less immediate payoff to society than applied research typically does 
D) basic research occurs in science while applied research occurs in industry 
E) only the government promotes basic research 
A) basic research does not promote resource productivity while applied research does 
B) applied research does not promote resource productivity while basic research does 
C) basic research has less immediate payoff to society than applied research typically does 
D) basic research occurs in science while applied research occurs in industry 
E) only the government promotes basic research

Question 5

Declining growth in productivity means that the standard of living has been falling over time.

Accepted Answer

A) True 
 B)False

Question 6

Basic research has less immediate payoff to society but is likely to be more important than applied research in fostering long-term growth.

Accepted Answer

A) True 
 B)False

Question 7

The productivity growth slowdown of the late 1970s and early 1980s may have been due,in part,to the environmental and workplace safety legislation.

Accepted Answer

A) True 
 B)False

Question 8

"The most important factor in determining a nation's standard of living in the long run is the size of its labor force."

Accepted Answer

A) True 
 B)False

Question 9

People prefer to make more income than others even if that means making a lower real income.

Accepted Answer

A) True 
 B)False

Question 10

The difference between human capital and physical capital is that

Accepted Answer

A) human capital is used by humans whereas physical capital is not 
B) only human capital increases labor productivity 
C) human capital is not physical; an example of human capital is education 
D) physical capital requires investment,whereas human capital does not 
E) only physical capital increases labor productivity 
A) human capital is used by humans whereas physical capital is not 
B) only human capital increases labor productivity 
C) human capital is not physical; an example of human capital is education 
D) physical capital requires investment,whereas human capital does not 
E) only physical capital increases labor productivity

Question 11

The major industrialized country with the highest level of per capita real output in 2003 was

Accepted Answer

A) Canada 
B) the United States 
C) Italy 
D) France 
E) Germany 
A) Canada 
B) the United States 
C) Italy 
D) France 
E) Germany

Question 12

Which of the following is most likely to increase productivity growth,as measured using GDP statistics?

Accepted Answer

A) reduced capital formation 
B) decreased human capital 
C) increased research and development 
D) increased government regulation 
E) higher prices for raw materials 
A) reduced capital formation 
B) decreased human capital 
C) increased research and development 
D) increased government regulation 
E) higher prices for raw materials

Question 13

Which of the following is an example of basic research?

Accepted Answer

A) An animal test is used to determine if a product contains irritants. 
B) Soft-drink bottlers test consumer reactions to their advertisements. 
C) A statistician calculates the odds of winning a promotional sweepstakes that a company is running. 
D) A catalog-sales company times its operators to see how many calls each is handling per day. 
E) A chemist builds a mathematical model of the atmosphere of Jupiter. 
A) An animal test is used to determine if a product contains irritants. 
B) Soft-drink bottlers test consumer reactions to their advertisements. 
C) A statistician calculates the odds of winning a promotional sweepstakes that a company is running. 
D) A catalog-sales company times its operators to see how many calls each is handling per day. 
E) A chemist builds a mathematical model of the atmosphere of Jupiter.

Question 14

Which of the following is not likely to cause a decrease in labor productivity?

Accepted Answer

A) a decline in student achievement scores 
B) a service sector that is growing as a percentage of GDP 
C) decreased spending on research and development 
D) increases in capital formation 
E) high federal budget deficits 
A) a decline in student achievement scores 
B) a service sector that is growing as a percentage of GDP 
C) decreased spending on research and development 
D) increases in capital formation 
E) high federal budget deficits

Question 15

If population increases,which of the following must be true?

Accepted Answer

A) GDP will increase. 
B) GDP per capita will fall. 
C) GDP must increase if the same standard of living is to be maintained. 
D) The labor force must increase if the same standard of living is to be maintained. 
E) Overall demand increases,but per capita aggregate demand remains constant. 
A) GDP will increase. 
B) GDP per capita will fall. 
C) GDP must increase if the same standard of living is to be maintained. 
D) The labor force must increase if the same standard of living is to be maintained. 
E) Overall demand increases,but per capita aggregate demand remains constant.

Question 16

Suppose the growth rate of employment is positive but labor productivity remains unchanged.What will happen to real GDP?

Accepted Answer

A) it will either decrease or remain constant 
B) it will decrease 
C) it will remain constant 
D) it will either increase or remain constant 
E) it will increase 
A) it will either decrease or remain constant 
B) it will decrease 
C) it will remain constant 
D) it will either increase or remain constant 
E) it will increase

Question 17

According to Simon Kuznets,

Accepted Answer

A) the main force behind economic growth is increases in the quantity of labor 
B) the main force behind economic growth is increases in the quantity of capital 
C) the main force behind economic growth is increases in the quality of inputs 
D) government regulations increase labor productivity 
E) government regulations decrease labor productivity 
A) the main force behind economic growth is increases in the quantity of labor 
B) the main force behind economic growth is increases in the quantity of capital 
C) the main force behind economic growth is increases in the quality of inputs 
D) government regulations increase labor productivity 
E) government regulations decrease labor productivity

Question 18

Which of the following does not contribute to an improved standard of living?

Accepted Answer

A) increases in the amount and quality of available resources 
B) better technology 
C) lower prices for the necessities of life 
D) improvements in the "rules of the game" 
E) increases in the quality of labor 
A) increases in the amount and quality of available resources 
B) better technology 
C) lower prices for the necessities of life 
D) improvements in the "rules of the game" 
E) increases in the quality of labor

Question 19

Exhibit 8-1  
-In Exhibit 8-1,Tasmania is currently operating at point A on the per-worker production function.The takeover of Tasmania by a military dictator that destabilizes the political and economic system would produce a movement from A to

Accepted Answer

A) B 
B) D 
C) E 
D) F 
E) G 
A) B 
B) D 
C) E 
D) F 
E) G

Question 20

The slope of the per-worker production function diminishes as the amount of capital per worker increases.This is a reflection of the law of

Accepted Answer

A) increasing marginal returns 
B) diminishing marginal returns 
C) constant marginal returns 
D) first diminishing then increasing marginal returns 
E) demand 
A) increasing marginal returns 
B) diminishing marginal returns 
C) constant marginal returns 
D) first diminishing then increasing marginal returns 
E) demand

Exam 8: Productivity and Growth

"The most important factor in determining a nation's standard of living in the long run is the productivity of its resources."

A possible downside of industrial policy is that

Exhibit 8-1 -In Exhibit 8-1,Tasmania is currently operating at point A on the per-worker production function.A war that destroys half of Tasmania's capital stock without diminishing the workforce will result in a movement from A to

The difference between basic and applied research is that

Declining growth in productivity means that the standard of living has been falling over time.

Basic research has less immediate payoff to society but is likely to be more important than applied research in fostering long-term growth.

The productivity growth slowdown of the late 1970s and early 1980s may have been due,in part,to the environmental and workplace safety legislation.

"The most important factor in determining a nation's standard of living in the long run is the size of its labor force."

People prefer to make more income than others even if that means making a lower real income.

The difference between human capital and physical capital is that

The major industrialized country with the highest level of per capita real output in 2003 was

Which of the following is most likely to increase productivity growth,as measured using GDP statistics?

Which of the following is an example of basic research?

Which of the following is not likely to cause a decrease in labor productivity?

If population increases,which of the following must be true?

Suppose the growth rate of employment is positive but labor productivity remains unchanged.What will happen to real GDP?

According to Simon Kuznets,

Which of the following does not contribute to an improved standard of living?

Exhibit 8-1 -In Exhibit 8-1,Tasmania is currently operating at point A on the per-worker production function.The takeover of Tasmania by a military dictator that destabilizes the political and economic system would produce a movement from A to

The slope of the per-worker production function diminishes as the amount of capital per worker increases.This is a reflection of the law of

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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