Deck 9: Economic Growth

Question 1

To measure the change in the standard of living, it is best to use the growth rate

A) from the Rule of 70.
B) of real GDP.
C) of the population.
D) of real GDP per person.
E) of the price level.

Answer 1

D

Question 2

Suppose France's real GDP grew from $750 billion in 2008 to $821 billion in 2009.What was the growth rate of France's real GDP?

A) 10 percent
B) 9.5 percent
C) 9.1 percent
D) 8.6 percent
E) $71 billion

Answer 2

B

Question 3

If real GDP in year 1 is $72 million and real GDP in year 2 is $87 million, then the growth rate of real GDP is

A) 15 percent.
B) $15 million.
C) 20.8 percent.
D) 17 percent.
E) 83 percent.

Answer 3

C

Question 4

A country will likely experience an increase in poverty if

A) its population decreases over time.
B) its real GDP growth rate decreases or slows over time.
C) its inflation rate decreases or slows over time.
D) its real GDP per person growth rate increases over time.
E) it does not receive foreign aid.

Question 5

In 2008, real GDP in the United States was $13,312 billion.In 2009, real GDP in the United States was $13,112 billion.What was the U.S.economic growth rate from 2008 to 2009?

A) -1.5 percent
B) 1.5 percent
C) 0.98 percent
D) 0.12 percent
E) $200 million

Question 6

If real GDP was $14 trillion last year and is $16 trillion this year, what is the growth rate?

A) 12.5 percent
B) -12.5 percent
C) 14 percent
D) $2 trillion
E) 47 percent

Question 7

Using the data in the table above, the growth rate of real GDP has

A) increased from year to year.
B) increased more rapidly from year to year.
C) remained constant from year to year.
D) slowed from year to year.
E) probably changed, but more information is needed about the price level to determine by how much it has changed.

Question 8

Economic growth is a sustained expansion of production possibilities, as measured by the increase in ________ over time.

A) real GDP
B) population
C) inflation
D) the price level
E) employment

Question 9

Which of the following variables is used to determine a country's economic growth?
I) real GDP
Ii) wages
Iii) inflation

A) i and ii only.
B) i, ii and iii.
C) ii and iii.
D) i only.
E) i and iii.

Question 10

A measure of growth in the standard of living is the growth in

A) real GDP.
B) population.
C) real GDP minus the growth in population.
D) population minus the growth in real GDP.
E) employment.

Question 11

Economic growth is defined as

A) a decrease in the rate of inflation.
B) an increase in employment.
C) a sustained expansion of production possibilities.
D) an increase in the wage rate.
E) an increase in the nation's population.

Question 12

In growth theory, the change in a country's standard of living is measured by the change in

A) real GDP per person.
B) real GDP.
C) the nation's capital stock.
D) wages per person.
E) employment.

Question 13

Suppose India wants to measure how much the standard of living has changed over the last decade. Which piece of data should India use?

A) population.
B) real GDP per person.
C) real GDP.
D) wages.
E) inflation.

Question 14

$$\begin{array} { c c c } \hline \text { Year } & \begin{array} { c } \text { Real GDP } \\\text { (trillions of 2005 dollars) }\end{array} & \begin{array} { c } \text { Population } \\\text { (millions of people) }\end{array} \\\hline 2007 & 7.00 & 100.0 \\2008 & 7.50 & 105.0 \\2009 & 8.25 & 110.0 \\\hline\end{array}$$

-Using the data in the table above, the growth rate of real GDP for 2008 is equal to

A) 9.09 percent.
B) 7.00 percent.
C) 5.00 percent.
D) 4.76 percent.
E) 10.0 percent.

Question 15

Growth in the standard of living is measured by the increase in

A) real GDP.
B) the Rule of 70.
C) employment.
D) real GDP per person.
E) consumption.

Question 16

If U.S.real GDP in 2007 was $13.25 trillion and U.S.real GDP in 2008 was $13.31 trillion, what was the economic growth rate of the United States during this period?

A) 18 percent
B) -1.36 percent
C) 1.36 percent
D) 6.9 percent
E) $1.8 trillion

Question 17

The growth rate of real GDP is measured by the following formula:

A) real GDP in the current year minus real GDP in the previous year.
B) real GDP in the previous year minus real GDP in the current year.
C) $\left( \frac { \text { real GDP in the current year - real GDP in the previous year } } { \text { real GDP in the previous year } } \right)$ × 100.
D) (real GDP in the current year + real GDP in the previous year) ÷ 2.
E) (real GDP in the current year minus real GDP in the previous year) × 100.

Question 18

The growth rate of real GDP equals

A) [(employment in the current year - employment in previous year)/employment in previous year] × 100.
B) [(real GDP in current year - real GDP in previous year) ÷ real GDP in previous year] × 100.
C) [(real GDP in previous year - real GDP in current year) ÷ real GDP in previous year] × 100.
D) [(real GDP in current year - real GDP in previous year) ÷ real GDP in current year] × 100.
E) (real GDP in current year - real GDP in previous year) × 100.

Question 19

Economic growth is defined as equal to the increase in

A) employment.
B) population.
C) real GDP.
D) the price level.
E) the inflation rate.

Question 20

Using the data in the table above, real GDP per person in 2007 is

A) $70,000.
B) $71,429.
C) $75,000.
D) $70 trillion.
E) 7 percent.

Question 21

The population in the current year is 31.5 million and the real GDP is $814 million.The previous year's statistics were a population of 31 million and a real GDP of $800 million.The change in the standard of living, measured by growth in real GDP per person, is

A) 1.6 percent.
B) 7.75 percent.
C) 4.3 percent.
D) 6 percent.
E) 0 percent.

Question 22

Belgium's real GDP per person is $33,000 and Austria's is $34,700.The population growth rate in Belgium is 0.13 percent and the growth rate of real GDP is 3.0 percent.The population growth rate in Austria is 0.08 percent and the growth rate of real GDP is 3.3 percent.If these growth rates continue, how many years will it take for Belgium's real GDP per person to equal Austria's real GDP per person?

A) Belgium's standard of living will never equal Austria's.
B) Just over 23 years
C) Just over 24 years
D) Just over 21 years
E) Over 230 years

Question 23

If a country experiences a real GDP growth rate of 1 percent and population growth of 2 percent, then the growth rate of real GDP per person is

A) 3 percent.
B) 2 percent.
C) 1 percent.
D) -1 percent.
E) 0 percent.

Question 24

Assume the population growth rate is 2 percent and the real GDP growth rate is 5 percent.The change in standard of living, as measured by the growth rate in real GDP per person, is

A) 7 percent.
B) 2.5 percent.
C) 5 percent.
D) 3 percent.
E) -3 percent.

Question 25

The rule of ________ can be used to calculate the number of years that it takes for the level of a variable to ________.

A) 20; double
B) 70; triple
C) 70; double
D) 20; triple
E) thumb; double

Question 26

In 2009, U.S.real GDP decreased by 3 percent and the population grew by 1 percent.Thus, real GDP per person

A) increased 2 percent.
B) decreased 2 percent.
C) increased 4 percent.
D) decreased 4 percent.
E) decreased 3 percent.

Question 27

In India last year, the growth rate of real GDP was 3.5 percent and the population grew from 1,000 million people to 1,100 million.Real GDP per person

A) increased by 13.5 percent.
B) decreased by 6.5 percent.
C) increased by 6.5 percent.
D) decreased by 13.5 percent.
E) increased by 3.5 percent.

Question 28

Real GDP in the country of Oz is growing at 5 percent and its population is growing at 2 percent.In the country of Lilliput, real GDP is growing at 4 percent and its population is growing at 0.5 percent.Thus,

A) real GDP per person in Oz is growing at a faster rate than in Lilliput.
B) real GDP per person in Lilliput is growing at a faster rate than in Oz.
C) real GDP per person in Lilliput is growing at the same rate as in Oz.
D) real GDP per person in Lilliput is growing at a rate that is not comparable to that in Oz.
E) we need more information to determine if real GDP per person in Lilliput is growing faster or slower than real GDP per person in Oz.

Question 29

$$\begin{array} { l c c } & \begin{array} { c } \text { Real GDP } \\\text { Year }\end{array} & \begin{array} { c } \text { Population } \\\text { (millions of 2005 dollars) } \\\text { (millions of people) }\end{array} \\\hline \text { Year 1 } & 500 & 10 \\\text { Year 2 } & 550 & 11 \\\hline\end{array}$$

-According to the data in the table above,

A) the standard of living improved between year 1 and year 2.
B) the standard of living worsened between year 1 and year 2.
C) as measured by real GDP per person, the standard of living remained the same between year 1 and year 2.
D) real GDP grew more rapidly than population between year 1 and year 2.
E) real GDP grew more slowly than population between year 1 and year 2.

Question 30

$$\begin{array} { l c c } & \begin{array} { c } \text { Real GDP } \\\text { Year }\end{array} & \begin{array} { c } \text { Population } \\\text { (millions of 2005 dollars) } \\\text { (millions of people) }\end{array} \\\hline \text { Year 1 } & 500 & 10 \\\text { Year 2 } & 550 & 11 \\\hline\end{array}$$

-According to the data in the table above, real GDP per person grew at a rate of ________ between year 1 and year 2.

A) 10 percent
B) 0 percent
C) 1 percent
D) 5 percent
E) 50 percent

Question 31

During 2008, Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth rate per person of -1.3 percent.These rates indicate that in Swaziland

A) there was an error when calculating the growth rates because the growth rate of real GDP per person cannot be negative.
B) the population growth rate was negative.
C) the population grew at a faster rate than real GDP.
D) poverty levels are declining.
E) real GDP grew more rapidly than did the population.

Question 32

If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of

A) 4 percent.
B) 2 percent.
C) 0.5 percent.
D) -3 percent.
E) 8 percent.

Question 33

The growth rate of real GDP per person equals the

A) population growth rate plus the growth rate of real GDP.
B) change in the economic growth rate divided by the change in the population growth rate.
C) the economic growth rate per person divided by the change in the population growth rate.
D) growth rate of real GDP minus the growth rate of the population.
E) population growth rate plus the growth rate of real GDP then divided by the initial level of real GDP.

Question 34

If Country A's real GDP is growing at 6 percent per year and Country B's real GDP is growing at 6 percent per year, then the standard of living is

A) growing more rapidly in Country A.
B) higher in Country B.
C) changing at the same rate in Country A and Country B.
D) growing more slowly in Country A.
E) changing at the same rate in Country A and Country B only if the rate of population growth is the same in both countries.

Question 35

If the U.S.population grew at a 0.9 percent during 2006 and real GDP grew at a 4.4 percent during the same period, what was the growth rate of real GDP per person?

A) 3.5 percent
B) 5.3 percent
C) 4.0 percent
D) -3.5 percent
E) 4.4 percent

Question 36

If Country A's real GDP per person is growing at 6 percent and Country B's real GDP per person is growing at 3 percent, then

A) the standard of living is higher in Country A.
B) the standard of living is higher in Country B.
C) the standard of living is growing more rapidly in Country A.
D) we cannot say whose standard of living is growing more rapidly without knowing the population growth rate.
E) we cannot say whose standard of living is growing more rapidly without knowing the growth rate of real GDP.

Question 37

If real GDP grows at a faster rate than does population, then the standard of living, as measured by real GDP per person,

A) improves.
B) worsens.
C) remains the same.
D) cannot be measured.
E) either improves, worsens, or stays the same, depending on the size of the population and the actual level of real GDP.

Question 38

If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year, the growth rate of real GDP per person is

A) 3 + 2.5 = 5.5 percent per year.
B) [(3 - 2.5) ÷ 2.5] × 100 = 20 percent per year.
C) [(2.5 - 3) ÷ 3] × 100 = 16.6 percent per year.
D) 3 - 2.5 = 0.5 percent per year.
E) 2.5 - 3 = -0.5 percent per year.

Question 39

Iceland's real GDP grows at a rate of 2.6 percent and population grows at a rate of 0.8 percent.Iceland's real GDP per person grows at a rate of

A) 1.8 percent.
B) 2.6 percent.
C) 3.4 percent.
D) 3.0 percent.
E) 3.2 percent.

Question 40

$$\begin{array} { l c c } & \begin{array} { c } \text { Real GDP } \\\text { Year }\end{array} & \begin{array} { c } \text { Population } \\\text { (millions of 2005 dollars) } \\\text { (millions of people) }\end{array} \\\hline \text { Year 1 } & 500 & 10 \\\text { Year 2 } & 550 & 11 \\\hline\end{array}$$

-According to the data in the table above, real GDP grew at a rate of ________ between year 1 and year 2.

A) 10 percent
B) 1 percent
C) 50 percent
D) 5 percent
E) 55 percent

Question 41

The Rule of 70, as applied to real GDP growth, can be used to find the

A) real GDP growth rate necessary to double growth.
B) number of years it takes for the level of real GDP to double.
C) growth rate of real GDP.
D) number of years it takes for the growth rate of real GDP to double.
E) population growth rate necessary to double the GDP growth rate.

Question 42

If a country experiences a real GDP growth rate of 6 percent, real GDP will double in

A) 10 years.
B) 11.67 years.
C) 14 years.
D) 17.5 years.
E) 16.67 years.

Question 43

The economic growth rate is measured as the

A) annual percentage change of real GDP.
B) annual percentage change of employment.
C) amount of real GDP.
D) annual percentage change of the population.
E) amount of population.

Question 44

Using the rule of 70, a sustained 3 percent per year real GDP growth rate will

A) last for 70 years.
B) double the current level of real GDP in about 23 years.
C) double the current level of real GDP in about 210 years.
D) double the current level of real GDP in about 70 years.
E) double the current level of real GDP in about 40 years.

Question 45

The economic growth rate is expressed as the ________.

A) annual percentage change of real GDP per person
B) growth rate of real GDP minus the growth rate of population
C) the standard of living
D) annual percentage change of real GDP
E) growth rate of the population

Question 46

If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it take for Country A's real GDP to double?

A) 10
B) 7
C) 5
D) 30
E) 14

Question 47

The Rule of 70 can be used to calculate the

A) economic growth rate per month.
B) population growth rate per year.
C) number of years it would take for the level of any variable to double.
D) 70 percent level of the economic growth rate.
E) economic growth rate per year.

Question 48

This year Iceland has a real GDP per person that is approximately 8 times greater than that of Cape Verde.Cape Verde's growth rate of real GDP per person was 5.2 percent.If Cape Verde maintains this current growth rate, approximately how many years will it take for Cape Verde's real GDP per person to reach the same level that Iceland has this year?

A) 13.5 years
B) 20 years
C) 27 years
D) 40 years
E) 54 years

Question 49

Economic growth is a sustained expansion of production possibilities measured as the increase in ________ over a given period.

A) real GDP
B) real GDP per person
C) the standard of living
D) capital per person
E) population

Question 50

Suppose Mexico's real GDP per person in 2008 is $6,000 and the U.S.real GDP per person is $24,000.Mexico has annual growth in real GDP per person of 5 percent.Approximately how many years will it take Mexico to equal $24,000 of real GDP per person?

A) 14 years
B) 18 years
C) 28 years
D) 36 years
E) 40 years

Question 51

The annual growth rate of an economy is 10 percent.The economy's GDP will double in about ________ years.

A) 7
B) 10
C) 12
D) 14
E) 20

Question 52

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

A) 63 years
B) 77.7 years
C) 70 years
D) 109 years
E) 100 years.

Question 53

For the world, what period of time experienced the fastest growth rate of real GDP per person?

A) around 500 B.C.
B) around 400 A.D.
C) between 1000 A.D.and 1500 A.D.
D) after about 1850 A.D.
E) between 1500 A.D.and 1850 A.D.

Question 54

A nation's annual growth rate of real GDP per person is 2 percent.Its standard of living will

A) double in 35 years.
B) not change because its population is growing.
C) fall because of its population growth.
D) double in 10 years.
E) double in 50 years.

Question 55

If it took 20 years for real GDP to double, what was the growth rate of real GDP?

A) 4.5 percent
B) 3.0 percent
C) 3.5 percent
D) 4 percent
E) 5 percent

Question 56

The Rule of 70 states that the level of a variable will double in

A) 70 years.
B) the number of years equal to the variable's annual rate of growth divided by 70.
C) the number of years equal to 70 divided by the variable's annual growth rate.
D) the number of years equal to the variable's annual growth rate minus 70.
E) the number of years equal to 70 multiplied by the variable's annual growth rate expressed as a decimal.

Question 57

This year, real GDP per person in Country A is eight times real GDP per person in Country B.If Country B's real GDP per person grows at a rate of 5 percent, about how many years will it take for Country B to reach the level of real GDP per person in Country A in this year?

A) 14 years
B) 28 years
C) 56 years
D) 42 years
E) It will never reach Country A's level of GDP per person

Question 58

In this year, Country A has a real GDP per person that is 4 times greater than that of Country B.Country B's growth rate of real GDP per person is 3.5 percent per year.How many years will it take for Country B's real GDP per person to reach the same level that Country A had in this year?

A) 10 years
B) 20 years
C) 40 years
D) 60 years
E) 56 years

Question 59

Over the past 100 years, real GDP per person in the United States has grown at an average rate of about ________ per year.

A) 1 percent
B) 2 percent
C) 5 percent
D) 10 percent
E) 7.5 percent

Question 60

According to the Rule of 70, if a country grows at 2.0 percent per year instead of 1.5 percent per year, how many fewer years will it take to double its level of real GDP?

A) It will take 11.6 years fewer.
B) It will take 35 years fewer.
C) It will take 58.3 years fewer.
D) It will take 20 years fewer.
E) It will take 17.9 years fewer.

Question 61

Aggregate hours show a sustained increase only as a result of

A) individuals working more hours.
B) a greater percentage of the population entering the workforce.
C) an increase in the population.
D) increases in overtime work.
E) sustained increases in the labor force participation rate.

Question 62

$$\begin{array} { c c c } & \begin{array} { c } \text { Employment } \\\text { Year }\end{array} & \begin{array} { c } \text { Real GDP } \\\text { (millions of people) (billions of 2005 francs) }\end{array} \\\hline 1998 & 58.85 & 8,243.9 \\1997 & 58.61 & 7,992.2 \\\hline\end{array}$$

-If a country experiences a real GDP growth rate of 4 percent, real GDP will double in

A) 14 years.
B) 17.5 years.
C) 23.3 years.
D) 35 years.
E) 25 years.

Question 63

Labor productivity is equal to the quantity of

A) real GDP produced by one hour of labor.
B) workers employed during one hour.
C) real GDP consumed by the total population in one hour.
D) real GDP.
E) workers who are gainfully employed.

Question 64

$$\begin{array} { c c c } & \begin{array} { c } \text { Employment } \\\text { Year }\end{array} & \begin{array} { c } \text { Real GDP } \\\text { (millions of people) (billions of 2005 francs) }\end{array} \\\hline 1998 & 58.85 & 8,243.9 \\1997 & 58.61 & 7,992.2 \\\hline\end{array}$$

-The table above gives information about the economy of France.The growth rate of real GDP per person in 1998 is ________ percent.

A) 3.1
B) 0.4
C) 2.7
D) 4.0
E) 1.9

Question 65

Population growth directly brings growth in ________ because the quantity of labor increases.

A) real GDP
B) labor productivity
C) real GDP per person
D) capital per hour of work
E) average hours per worker

Question 66

$$\begin{array}{l}\text { Real GDP }\\\begin{array} { c c } \text { Year } & \text { (trillions of 2005 yen) } \\\hline 1997 & 484 \\1996 & 480 \\\hline\end{array}\end{array}$$

-The table gives information about the economy of Japan.The economic growth rate in 1997 is ________ percent.

A) 8.0
B) 0.8
C) 0.08
D) 0.008
E) 4

Question 67

$$\begin{array} { c c c } & \begin{array} { c } \text { Employment } \\\text { Year }\end{array} & \begin{array} { c } \text { Real GDP } \\\text { (millions of people) (billions of 2005 francs) }\end{array} \\\hline 1998 & 58.85 & 8,243.9 \\1997 & 58.61 & 7,992.2 \\\hline\end{array}$$

-Suppose that in the future, real GDP per person grows 2 percent a year in the United States and 4 percent a year in China.It will take real GDP per person approximately ________ years to double in the United States and approximately ________ years to double in China.

A) 70; 35
B) 35; 17.5
C) 35; 8.75
D) 50; 25
E) 20; 10

Question 68

In a small western nation, labor productivity last year was $20 per hour and total labor hours were 400 hours.Hence, real GDP

A) was $80,000.
B) was $8,000.
C) was $20.
D) grew by 5%.
E) 00$416,000 over 52 weeks.

Question 69

$$\begin{array}{l}\text { Real GDP }\\\begin{array} { c c } \text { Year } & \text { (trillions of 2005 yen) } \\\hline 1997 & 484 \\1996 & 480 \\\hline\end{array}\end{array}$$

-The standard of living is measured by

A) real GDP.
B) employment.
C) employment per person.
D) real GDP per person.
E) the population.

Question 70

In the United States, there has been ________ in the quantity of labor and, as a benefit of economic growth, ________ in average hours per worker.

A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease
E) an increase; no change

Question 71

Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year.The economic growth rate between these years has been

A) 10.31 percent.
B) 4.65 percent.
C) 5.67 percent.
D) 7.67 percent.
E) $0.4 trillion.

Question 72

Labor productivity is defined as

A) total real GDP.
B) real GDP per person.
C) total output multiplied by total hours of labor.
D) real GDP per hour of labor.
E) hours of work per person.

Question 73

As the U.S.economy has grown over time, a benefit of the economic growth has been the fact that

A) average hours have increased.
B) average hours have decreased.
C) labor productivity has decreased.
D) real GDP per person has decreased.
E) aggregate hours have decreased.

Question 74

$$\begin{array} { c c c } & \begin{array} { c } \text { Employment } \\\text { Year }\end{array} & \begin{array} { c } \text { Real GDP } \\\text { (millions of people) (billions of 2005 francs) }\end{array} \\\hline 1998 & 58.85 & 8,243.9 \\1997 & 58.61 & 7,992.2 \\\hline\end{array}$$

-If real GDP increases by 6 percent and at the same time the population increases by 2 percent, then real GDP per person grows by

A) 6 percent.
B) 4 percent.
C) 2 percent.
D) 8 percent.
E) 3 percent.

Question 75

$$\begin{array} { c c c } & \begin{array} { c } \text { Employment } \\\text { Year }\end{array} & \begin{array} { c } \text { Real GDP } \\\text { (millions of people) (billions of 2005 francs) }\end{array} \\\hline 1998 & 58.85 & 8,243.9 \\1997 & 58.61 & 7,992.2 \\\hline\end{array}$$

-If real GDP grew 5 percent last year and the population grew 2 percent, then real GDP per person grew by ________ percent.

A) 10
B) 5
C) 3
D) 2
E) 7

Question 76

The data show that in the long run, sustained growth in the quantity of labor will come from

A) continual increases in average hours.
B) constant increases in the labor force participation rate.
C) constant decreases in the unemployment rate.
D) increases in the population.
E) increases in labor productivity.

Question 77

$$\begin{array}{l}\text { Real GDP }\\\begin{array} { c c } \text { Year } & \text { (trillions of 2005 yen) } \\\hline 1997 & 484 \\1996 & 480 \\\hline\end{array}\end{array}$$

-If the growth rate of population is greater than a nation's growth rate of real GDP, then its real GDP per person

A) falls.
B) rises.
C) does not change.
D) might rise, fall, or not change.
E) cannot be measured.

Question 78

Labor productivity equals

A) real GDP.
B) real GDP per hour of labor.
C) the total production of labor.
D) the quantity of labor hours divided by real GDP.
E) real GDP divided by the amount of human capital.

Question 79

$$\begin{array}{l}\text { Real GDP }\\\begin{array} { c c } \text { Year } & \text { (billions of 2005 pesetas) } \\\hline 1998 & 45,901 \\1997 & 44,224\end{array}\end{array}$$

-The table above gives information about the economy of Spain.If the growth rate in 1998 is maintained, real GDP will double in ________ years.

A) 4
B) 19
C) 10
D) 18
E) 25

Question 80

In the long run, most of the growth in aggregate hours comes from

A) population growth.
B) advances in technology.
C) increases in the labor force participation rate.
D) increases in labor productivity.
E) None of the above answers is correct because the premise of the question is wrong since aggregate hours will not grow in the long run.