978-1259723223 Test Bank TBChap028 Part 3

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AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 02 Medium

Learning Objective: 28-05 Explain how the average rate of U.S. productivity growth has

fluctuated since 1973.

Test Bank: I

Topic: The Rise in the Average Rate of Productivity Growth

91.

The fundamental invention underpinning the 1995–2010 rise in the average rate of

productivity growth is the

92.

All of the following are economic implications of the 1995–2010 rise in the average rate

of productivity growth except

93.

Which of the following explanations is consistent with the decline in productivity

growth that followed the Great Recession?

94.

Measured productivity growth for the United States declined following the Great

Recession. Which of the following explanations for that phenomenon suggests that measured

productivity has failed to account for actual gains?

95.

In the period following the Great Recession, the creation of new Internet apps has

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surplus.

D. led firms in these markets to expand capacity beyond what consumers demand.

96.

Which of the following statements is true about productivity growth in the United States

since the Great Recession?

97.

Which of the following is a true statement?

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Difficulty: 02 Medium

Learning Objective: 28-06 Discuss differing perspectives as to whether growth is desirable

and sustainable.

Test Bank: I

Topic: Is Growth Desirable and Sustainable?

98.

Proponents of economic growth say that pollution

99.

Critics of economic growth

100.

Which of the following is not an argument made by proponents of economic growth?

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D. Growth provides an economic environment favorable to education and self-fulfillment.

101.

(Consider This) The main point of the Consider This box about hypothetical countries

Slogo, Sumgo, and Speedo is that over several decades, differing

102.

(Consider This) According to the Consider This box about hypothetical countries

Slogo, Sumgo, and Speedo, small differences in make for large differences in

over several

decades, assuming the same growth of population for each country.

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Topic: Modern Economic Growth

103.

(Consider This) According to the Consider This box on patents and innovation, the cost

for U.S. and European drug companies to research, patent, and safety-test a new drug is

about

104.

(Consider This) The Consider This box on patents and innovation demonstrates that

105.

(Consider This) Over the past several decades, the percentage of women in the paid

U.S. workforce has

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D. increased for unmarried women but decreased for married women.

106.

(Consider This) Rising wages for women in the United States have increased

107.

(Last Word) The inverse dependency ratio is defined as

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Learning Objective: 28-03 Identify the general supply, demand, and efficiency forces that

give rise to economic growth.

Test Bank: I

Topic: Determinants of Growth

108.

(Last Word) The inverse dependency ratio is predicted to fall to about 1.16 by 2050.

What is the most likely effect of this decline?

109.

(Last Word) It is expected that by 2050, most nations will have decreasing populations.

With the likely decline in the labor force and number of hours of work in the economy, what

must occur for real GDP to continue to rise?

True / False Questions

110.

In the United States, real GDP per capita has increased more rapidly than real GDP.

111.

An economy with an average growth rate of 10 percent can expect to see its real GDP

double in approximately 7 years.

112.

Growth is a widely held economic goal primarily because it creates a more equal

distribution of wealth and income.

113.

Real GDP per capita is found by dividing real GDP by the size of the labor force.

FA LSE

114.

The rule of 70 is used to find how long it will take an economy to grow by 70 percent.

115.

Growth in well-being tends to be understated by growth in real GDP because of

increases in leisure time.

116.

Modern economic growth is defined as increases in real GDP over time.

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Test Bank: I

Topic: Modern Economic Growth

117.

Modern economic growth since the 1820s has widened wealth and income disparities

between richer and poorer nations.

118.

Leader countries tend to have higher growth rates than follower countries.

119.

Follower countries achieve high rates of growth by adopting technologies developed

by leader countries.

120.

Strong economic growth since 1960 has allowed nations like Singapore and Ireland to

surpass nations such as the United Kingdom and France in real GDP per capita.

121.

Strong property rights inhibit economic growth by strictly regulating economic

behavior.

122.

Strong patent laws encourage innovation and promote economic growth.

123.

The intense competition of free trade prevents the investment that generates economic

growth.

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FA LSE

124.

A competitive market system promotes growth by providing producers with market

signals on which to base investment and production decisions.

125.

Improvements in technology are considered a demand factor in economic growth.

126.

Increases in household and business spending are a demand factor in economic growth.

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Blooms: Remember

Dif f i c u l ty: 01 Easy

Learning Objective: 28-03 Identify the general supply, demand, and efficiency forces that

give rise to economic growth.

Test Bank: I

Topic: Determinants of Growth

127.

To fully realize economic growth through the efficiency factor, an economy must

increase its stock of capital goods and improve its technology.

128.

If an economy is currently producing on its production possibilities curve, a rightward

shift of the curve is a necessary but not sufficient condition for economic growth.

129.

Economic growth can be shown as a movement from a point on one production

possibilities curve to a point on a curve located farther from the origin.

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Learning Objective: 28-03 Identify the general supply, demand, and efficiency forces that

give rise to economic growth.

Test Bank: I

Topic: Determinants of Growth

130.

An increase in total spending generates economic growth by shifting the production

possibilities curve farther from the origin.

131.

Between 1953 and 2015, rising labor productivity contributed more to U.S. economic

growth than did increases in inputs.

132.

Real GDP = worker-hours × labor productivity.

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accounting for economic growth in the United States.

Test Bank: I

Topic: Accounting for Growth

T o p i c : Determinants of Growth

133.

Labor productivity = worker-hours/real GDP.

134.

Improvements in education and training explain about 80 percent of the historical

growth of U.S. labor productivity.

135.

Productivity growth was greater between 1973 and 1995 than between 1995 and 2010.

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accounting for economic growth in the United States.

Test Bank: I

Topic: Accounting for Growth

136.

The economy of 1995–2010 was characterized by greater productivity growth and

greater economic growth than in the immediately preceding two decades.

137.

Because of the recent rise in the average rate of productivity growth, the business cycle

is dead.

138.

One hypothesis for declining productivity growth rates since the Great Recession is

that individuals and firms have focused more on paying off debt than on making productive

investments.

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Test Bank: I

Topic: The Rise in the Average Rate of Productivity Growth

139.

One hypothesis for declining productivity growth rates since the Great Recession is

that technological progress has been so rapid that firms have not been able to keep up in

140.

Critics of economic growth say studies show that people are not interested in achieving

higher standards of living.

141.

Proponents of economic growth claim that rising living standards can lead to

environmental improvements as people can afford to care more about the environment.

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Topic: Is Growth Desirable and Sustainable?

142.

Proponents of economic growth claim that growth leads to greater equality of income

in an economy.

Multiple Choice Questions

143.

Which of the following is a measure of economic growth that is most useful for

measuring geopolitical preeminence or military potential?

144.

Which of the following is a measure of economic growth that is most useful for

comparing living standards?

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Dif f i c u l ty: 01 Easy

Learning Objective: 28-01 List two ways that economic growth is measured.

Test Bank: II

Topic: Economic Growth

145.

A nation’s real GDP was $250 billion in 2015 and $265 billion in 2016. Its population

was 120 million in 2015 and 125 million in 2016. What is its real GDP growth rate in

2016?

146.

A nation’s real GDP was $250 billion in 2015 and $265 billion in 2016. Its population

was 120 million in 2015 and 125 million in 2016. What is its real GDP per capita in 2016?

147.

A nation’s real GDP was $250 billion in 2015 and $265 billion in 2016. Its population

was 122 million in 2015 and 125 million in 2016. What is the growth rate of real GDP per

capita in 2016?