 |
| 1 | |
Increasing the capital available to the workforce, holding other factors constant, tends to _____ total output and to _____ average labor productivity. |
| | A) | increase; decrease |
| | B) | increase; increase |
| | C) | increase; keep unchanged |
| | D) | decrease; increase |
| | E) | decrease; decrease |
|
|
|
| 2 | |
Each of the following statements describes how the political and legal environment encourages productivity EXCEPT: |
| | A) | Well-defined property rights encourage production and saving. |
| | B) | Political stability promotes economic growth. |
| | C) | The free and open exchange of ideas spreads the development of new technologies. |
| | D) | Price changes in markets provide suppliers incentives to supply goods to markets. |
| | E) | Pay rates determined by a governmental planning agency provide workers with the incentive to work hard. |
|
|
|
| 3 | |
Compared to the 1950s and 1960s average productivity growth _____ in the 1970s and _____ in the 1980s and 1990s. |
| | A) | slowed; slowed even more |
| | B) | slowed; remained at low rates |
| | C) | slowed; remained at low rates until 1995 and then improved somewhat |
| | D) | speeded up; slowed |
| | E) | speeded up; increased even more |
|
|
|
| 4 | |
An important economic cost of growth is: |
| | A) | higher interest rates. |
| | B) | higher inflation rates. |
| | C) | higher unemployment rates. |
| | D) | consumption sacrificed for capital formation. |
| | E) | investment in stocks and bonds. |
|
|
|
| 5 | |
A government policy that allows retirement savings to accumulate tax free is an example of a policy to promote economic growth by: |
| | A) | increasing human capital. |
| | B) | increasing physical capital. |
| | C) | improving technology. |
| | D) | improving the social and legal environment. |
| | E) | increasing the availability of natural resources. |
|
|
|
| 6 | |
Arguments that economic growth is limited by environmental problems and limited natural resources ignore all of the following EXCEPT that: |
| | A) | economic growth can take the form of new, different, and "cleaner" goods and services. |
| | B) | economic growth may lead to less, not more, pollution. |
| | C) | the market mechanism mobilizes resources to deal with shortages. |
| | D) | public policy can supplement market adjustments in the face of resource shortages. |
| | E) | global environmental problems are not handled by markets or national governments. |
|
|
|
| 7 | |
Real GDP per person in Westland is $15,000, while real GDP in Eastland is $20,000, However, Westland's real GDP per person is growing at 2.5 % per year and Eastland's is growing at 1.5% per year. If these growth rates persist indefinitely, then: |
| | A) | Westland's real GDP per person will increase until it equals, but does not exceed, Eastland's. |
| | B) | Westland's real GDP per person will eventually be greater than Eastland's. |
| | C) | Eastland's real GDP per person will always be greater than Westland's. |
| | D) | Eastland's real GDP per person will decline until it equals Westland's. |
| | E) | Eastland's real GDP per person will decline, but never be less than Westland's. |
|
|
|
| 8 | |
In Macroland 400,000 of the 1 million people in the country are employed. Average labor productivity in Macroland is $30,000 per worker. Real GDP per person in Macroland totals: |
| | A) | $1,000 |
| | B) | $12,000 |
| | C) | $15,000 |
| | D) | $30,000 |
| | E) | $42,000 |
|
|
|
| 9 | |
The main source of growth in real GDP per person has been growth in: |
| | A) | average labor productivity. |
| | B) | the rate of discoveries of land and natural resource. |
| | C) | the price level. |
| | D) | proportion of the population employed. |
| | E) | population. |
|
|
|
| 10 | |
An example of a government policy to promote economic growth by supporting research and development is the: |
| | A) | provision of tax-free retirement savings accounts. |
| | B) | public job training programs. |
| | C) | building of roads, bridges, and other infrastructure. |
| | D) | provision of grants through the National Science Foundation. |
| | E) | development of secure property rights. |
|
|
.