61) 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
Skill: Level 1: Deinition
Section: Checkpoint 9.1
Status: Old
AACSB: Relective thinking
62) 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) standard of living.
D) annual percentage change of real GDP.
E) growth rate of the population.
Skill: Level 1: Deinition
Section: Checkpoint 9.1
Status: Old
AACSB: Relective thinking
63) 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.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Old
AACSB: Analytical thinking
21
64) 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
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Old
AACSB: Analytical thinking
65) The standard of living is measured by
A) real GDP.
B) employment.
C) employment per person.
D) real GDP per person.
E) the population.
Skill: Level 1: Deinition
Section: Checkpoint 9.1
Status: Old
AACSB: Relective thinking
66) 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.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Old
AACSB: Relective thinking
67) 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) 3.6
22
D) 4.0
E) 1.9
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Revised
AACSB: Analytical thinking
68) 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.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Old
AACSB: Analytical thinking
69) 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
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Old
AACSB: Analytical thinking
23
70) 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.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Old
AACSB: Analytical thinking
71) 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
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Old
AACSB: Analytical thinking
72) 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
Skill: Level 2: Using deinitions
Section: Checkpoint 9.1
Status: Old
AACSB: Analytical thinking
24
9.2 Labor Productivity Growth
1) Labor productivity is deined 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.
Skill: Level 1: Deinition
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
2) 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.
Skill: Level 1: Deinition
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
3) 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.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
25
4) The quantity of real GDP produced by one hour of labor is deined as
A) real GDP per person.
B) the advance in technology.
C) the growth rate of technology.
D) labor productivity.
E) economic growth.
Skill: Level 1: Deinition
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
5) Labor productivity is calculated as
A) (real GDP ÷ aggregate hours).
B) (real GDP ÷ aggregate hours × number of workers).
C) (real GDP ÷ number of workers × ratio of capital per worker).
D) (real GDP ÷ technology level).
E) (real GDP ÷ aggregate hours × number of workers) × 100.
Skill: Level 1: Deinition
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
6) Sustained increases in the standard of living depend on
A) increases in the quantity of labor.
B) increases in the population.
C) increases in aggregate hours.
D) increases in labor productivity.
E) decreases in labor productivity.
Skill: Level 1: Deinition
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
26
7) An increase in labor productivity
A) increases the standard of living.
B) decreases the standard of living.
C) might be the result of an increase in the quantity of labor.
D) generally occurs when physical capital decreases because irms must then hire more
workers.
E) cannot occur without a corresponding increase in employment.
Skill: Level 1: Deinition
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
8) Last year, in a nation far to the South, real GDP was $90 million and 900,000 workers
were employed. This year real GDP is $100 million, 950,000 workers are employed, and the
number of hours each worker works per year did not change. Hence, labor productivity
A) has increased.
B) has decreased.
C) has remained constant.
D) cannot be compared between the two years because both real GDP and the number of
workers increased.
E) might have changed, but more information is needed to determine if it changed.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: Old
AACSB: Analytical thinking
9) If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours
is 170 billion hours, labor productivity is
A) $2.63 an hour.
B) $2.86 an hour.
C) $35,000.
D) $38.00 an hour.
E) 920 hours.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: Old
AACSB: Analytical thinking
27
10) Real GDP is $700 billion, average hours worked per week is 42 and aggregate hours is
150 billion hours. What is the economy’s labor productivity?
A) $1.80 per hour
B) $3.75 per hour
C) $16.67 per hour
D) $4.67 per hour
E) $4.50 per hour
Skill: Level 3: Using models
Section: Checkpoint 9.2
Status: Revised
AACSB: Analytical thinking
11) Labor productivity growth depends on
i. saving and investment.
ii. increases in human capital.
iii. technological growth.
A) i only
B) ii only
C) iii only
D) Both ii and iii
E) i, ii, and iii
Skill: Level 1: Deinition
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
12) Labor force productivity has increased from $30 per hour to $32 per hour over the past
year. This could result from
A) only an increase in real GDP.
B) an increase in real GDP with no change in the aggregate hours or a decrease in
aggregate hours with no change in real GDP.
C) only a decrease in aggregate hours.
D) an increase in the labor force participation rate.
E) an increase in population.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
28
13) In recent years, Taiwan has experienced increases in savings and investment. As a
result of the higher investment and saving, we expect
i. increases in physical capital.
ii. increases in the inlation rate.
iii. advances in technology.
A) i and iii
B) i and ii
C) ii only
D) ii and iii
E) i, ii and iii
Skill: Level 3: Using models
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
14) If the stock of physical capital (that is machinery, equipment, etc.) and human capital
remains the same and the population increases, then
A) labor productivity will increase.
B) labor productivity will decrease.
C) the standard of living will increase.
D) the new labor will be more productive.
E) real GDP decreases.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
15) The widespread adoption of computers in the workplace has likely led to
A) no change in the quantity of labor hours.
B) an increase in labor productivity because computers are a capital good.
C) a decrease in labor productivity because computers are a capital good.
D) a decrease in human capital because computers are physical capital.
E) an increase in the supply of labor because people are needed to operate the computers.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
29
16) An increase in capital brings a large increase in output at a ________ quantity of capital
and a small increase in output at a ________ quantity of capital because of ________.
A) small; large; increasing returns along the productivity curve
B) small; large; diminishing returns along the productivity curve
C) large; small; diminishing returns along the productivity curve
D) large; small; increasing returns along the productivity curve
E) large; small; the greater the quantity of capital the greater the output
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: New
AACSB: Relective thinking
17) Which of the following are required for economic growth?
i. more goods and services produced per hour of work
ii. an increase in the average hours of labor per person
iii. an increase in prices
A) i and iii
B) i and ii
C) ii and iii
D) i only
E) ii only
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
18) A reason for an increase in labor productivity growth is
A) an increase in people’s human capital.
B) a decrease in the capital stock so that irms must hire more workers.
C) growth in the supply of labor.
D) an increase in the population so that irms hire more workers.
E) an increase in the quantity of labor.
Skill: Level 2: Using deinitions
Section: Checkpoint 9.2
Status: Old
AACSB: Relective thinking
30