26–61
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 26-02 Discuss why sustained increases in living standards are a
historically recent phenomenon.
Test Bank: II
Topic: The Miracle of Modern Economic Growth
142.
For many decades prior to the Industrial Revolution, the standards of living in England and
China
143.
In earlier centuries, the Roman and Chinese economies
144.
Suppose that real GDP increases by 5 percent while the population of a country increases
by 7 percent. In this situation,
26–62
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D.
there is not enough information to determine what happens to output per person.
145.
Modern economic growth
146.
Under modern economic growth, the annual average increase in output per person is
147.
Before the late 1700s, living standards in the richest part of the world were
148.
Which of the following is not an adjustment made when comparing standards of living
across countries?
149.
Purchasing power parity refers to
26–64
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
historically recent phenomenon.
Test Bank: II
Topic: The Miracle of Modern Economic Growth
150.
In 2014, output (GDP) per person in the U.S. was about
151.
Which among the following countries had the highest GDP per person in 2014?
152.
Which among the following countries had the highest GDP per person in 2014?
26–65
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Understand
D i f f i c u l t y : 02 Medium
Learning Objective: 26-02 Discuss why sustained increases in living standards are a
historically recent phenomenon.
Test Bank: II
Topic: The Miracle of Modern Economic Growth
153.
At the core of understanding economic growth is the idea that to raise living standards over
time, an economy must
154.
Investment happens when
155.
Saving in the economy
26–66
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B.
is generally not a determinant of future output.
C.
and investment are essentially the same concept.
D.
occurs when current consumption is more than current output.
156.
There is a trade-off between
157.
A higher rate of investment now will generate
158.
The amount of investment is ultimately limited by the amount of
160.
Which of the following is the best example of financial investment?
26–68
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Di f f i c u l t y : 01 Easy
Learning Objective: 26-03 Identify why saving and investment are key factors in
promoting rising living standards.
Test Bank: II
Topic: Saving, Investment, and Choosing between Present and Future Consumption
161.
Which of the following is the best example of economic investment?
162.
Which of the following is the best example of investment as defined by economists?
163.
Which of the following best represents the effect of an increase in investment?
164.
One principle of economic growth is the notion that, to raise living standards over time, an
economy must
165.
Which of the following groups is the principal source of savings in an economy?
26–71
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Remember
Di f f i c u l t y : 01 Easy
Learning Objective: 26-03 Identify why saving and investment are key factors in
promoting rising living standards.
Test Bank: II
Topic: Saving, Investment, and Choosing between Present and Future Consumption
166.
Who are the main economic investors in a market economy?
167.
Savings are transferred from savers to borrowers through the following intermediaries,
except
168.
Financial institutions reward savers with the following, except
26–72
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B. wages.
C.
dividends.
D.
capital gains.
169.
Decisions about saving and investment are
170.
Increased optimism about the future will lead to
171.
Situations in which firms expect one thing to happen but then something else happens are
called
172.
In economics, the word “shocks” refers to
173.
Sharply rising oil prices are most likely to lead to a
26–74
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D i f f i c u l t y : 02 Medium
Learning Objective: 26-04 Describe why economists believe that shocks and sticky prices
are responsible for short-run fluctuations in output and employment.
Test Bank: II
Topic: Uncertainty, Expectations, and Shocks
174.
If consumers become pessimistic, the economy is likely to experience a
175.
An increase in worker productivity will lead to a
176.
The term “shock”
177.
What impact will a negative demand shock have on the main measures of economic
performance?
178.
What effect will a negative supply shock have on the main measures of economic
performance?
179.
Economists believe that most short-run fluctuations
180.
If prices are “sticky” in the short run, then
181.
If prices are inflexible, then a negative demand shock will lead to
26–77
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D i f f i c u l t y : 02 Medium
Learning Objective: 26-04 Describe why economists believe that shocks and sticky prices
are responsible for short-run fluctuations in output and employment.
Test Bank: II
Topic: Uncertainty, Expectations, and Shocks
182.
Because prices are sticky, a positive demand shock will lead to
183.
Refer to the graphs. Which of the following best represents a positive demand shock when
prices are flexible?
184.
Refer to the graphs. Which of the following best represents a negative demand shock when
prices are inflexible?
26–79
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D i f f i c u l t y : 02 Medium
Learning Objective: 26-04 Describe why economists believe that shocks and sticky prices
are responsible for short-run fluctuations in output and employment.
Test Bank: II
Topic: Uncertainty, Expectations, and Shocks
Type: Graph
185.
Refer to the graphs. Suppose a firm is currently producing 500 computers per week and charging
a price of $1,000. How will the firm respond to a positive demand shock if prices are inflexible?
186.
Refer to the graphs. Suppose a firm is currently producing 500 computers per week and charging
a price of $1,000. How will the firm respond to a negative demand shock if prices are flexible?