73. Human capital is the amount of
a.
capital available to workforce.
b.
skill embodied in the workforce.
c.
output the labor force can produce.
d.
healthy work force in the total population.
DISC: Labor markets
United States – BPROG: Analytic
Labor markets
The Three Pillars Of Productivity Growth
74. Human capital differs from physical capital in that
a.
human capital is intangible.
b.
human capital is tangible.
c.
physical capital is intangible.
d.
human capital has no cost to acquire.
DISC: Labor markets
United States – BPROG: Analytic
Labor markets
The Three Pillars Of Productivity Growth
75. Workforce quality can be improved by
a.
years of education.
b.
on-the-job training.
c.
workplace learning.
d.
all of the above.
DISC: Labor markets
United States – BPROG: Analytic
Labor markets
The Three Pillars Of Productivity Growth
76. How is human capital most commonly measured?
a.
By the organizational rank and seniority
b.
By the amount of pay and incentives
c.
By the amount of education and training
d.
By the compensation structure and work policies
DISC: Labor markets
United States – BPROG: Analytic
Labor markets
The Three Pillars Of Productivity Growth
77. One of the key factors in the economic success of South Korea was
a.
b.
c.
d.
DISC: Labor markets
United States – BPROG: Analytic
Labor markets
The Three Pillars Of Productivity Growth
78. Which of the following was NOT a factor in Japan’s post-World War II economic success?
a.
a high rate of investment
b.
a well-educated workforce
c.
a high rate of natural resource discovery
d.
a high rate of technological adoption
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
The Three Pillars Of Productivity Growth
79. Which of the following is not one of the three pillars of productivity growth?
a.
rate of capacity utilization
b.
rate of technological improvement
c.
rate of improvement in workforce quality
d.
rate of capital expansion
80. Which of the following countries has the lowest level of average educational attainment?
a.
Canada
b.
Italy
c.
India
d.
Sudan
Easy
81. Which of the following countries has the highest level of average educational attainment?
a.
Canada
b.
Italy
c.
India
d.
Sudan
a
Moderate
82. Which of the following countries would have the most difficulty raising its level of average educational attainment?
a.
Canada
b.
Italy
c.
India
d.
Sudan
a
Moderate
83. The lessons of the Japanese recovery were most successfully repeated by
a.
the Soviet Union.
b.
Argentina and Brazil.
c.
Taiwan, Singapore, and Hong Kong.
d.
Bulgaria and Romania.
c
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
The Three Pillars Of Productivity Growth
84. The wealthy nations of the world have
a.
the largest populations.
b.
more supplies of natural resources.
c.
more supplies of capital.
d.
larger labor forces.
c
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
85. What determines the productivity growth rates of a country?
a.
Amount of working capital currently available.
b.
Rates of increase of capital, technology, and workforce quality
c.
Current level of gross domestic product.
d.
Current levels of human capital, physical capital, and technology.
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
86. In 2011, which country had the highest level of GDP per hour of work?
a.
Spain
b.
the United Kingdom
c.
France
d.
Japan
c
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
87. From 1979 to 2011, which country had the highest growth rate of GDP per hour of work?
a.
Singapore
b.
United Kingdom
c.
France
d.
Japan
a
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
88. From 1979 to 2011, which country had the lowest growth rate of GDP per hour of work?
a.
Singapore
b.
United States
c.
France
d.
Japan
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
89. In general, countries with lower rates of growth of labor productivity have
a.
lower levels of productivity.
b.
higher levels of productivity.
c.
lower levels of educational attainment.
d.
higher levels of natural resource endowments.
Moderate
DISC: Labor markets
United States – BPROG: Analytic
Labor markets
Levels, Growth Rates, and The Convergence Hypothesis
90. A country’s level of well being is determined primarily by its level of
a.
population growth.
b.
educational attainment.
c.
capital stock growth.
d.
natural resource growth.
c
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
91. Which of the following countries would find it easiest to achieve rapid growth in per capita GDP?
a.
United States
b.
United Kingdom
c.
France
d.
Mexico
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
92. In general, as productivity levels increase, the potential for productivity growth
a.
decreases.
b.
increases.
c.
remains the same.
d.
increases if GDP increases.
a
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
93. In general, as productivity levels decrease, the potential for productivity growth
a.
decreases.
b.
increases.
c.
remains the same.
d.
decreases if GDP decreases.
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
94. A country’s level of productivity determines its
a.
productivity growth rate.
b.
rate of population growth.
c.
current standard of living.
d.
future income potential.
c
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
95. The productivity growth rates of poorer countries tend to be ____ than those of richer countries.
a.
higher
b.
lower
c.
increasing slower
d.
decreasing faster
a
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
96. The productivity growth rates of richer countries tend to be ____ than those of poorer countries.
a.
higher
b.
lower
c.
increasing faster
d.
decreasing faster
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
97. The shrinking gap between the income levels of poor and rich countries is known as the
a.
conservative hypothesis.
b.
divergence hypothesis.
c.
convergence hypothesis.
d.
confluent hypothesis.
c
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
98. Identify the main reason to expect convergence in the long run.
a.
Low-productivity countries learning from high-productivity countries
b.
Rapid growth in the supply of capital in low-productivity countries
c.
Educational attainment rising quickly in low-productivity countries
d.
Economic complacency and mismanagement in high-productivity countries
a
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
99. One of the factors causing the shrinking gap between rich and poor countries is
a.
learning by poor countries.
b.
increasing resource discoveries.
c.
increasing populations in poor countries.
d.
transfers of income from rich countries.
a
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
100. The application of new technology refers to
a.
imitation.
b.
investment.
c.
innovation.
d.
education.
c
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
101. Imitation as a strategy for acquiring new technology is based on the difference in effort between
a.
creating it and thinking of it.
b.
creating it and looking it up.
c.
looking it up and writing it down.
d.
discovering it and innovating it.
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
102. On a graph with time on the horizontal axis and real GDP per capita on the vertical axis, the income levels of poorer
countries are
a.
diverging more from the incomes of rich countries.
b.
maintaining a constant gap with the incomes of richer countries.
c.
crossing the line representing richer countries.
d.
coming closer to the line representing richer countries.
DISC: Productivity and growth
United States – BPROG: Reflective Thinking – BPROG: Analysis
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
103. The invention of the Internet should make poorer countries
a.
poorer due to the expense of new technology.
b.
poorer because the Internet is primarily in richer countries.
c.
richer because technology adoption is easier.
d.
richer because they can distribute information without costs.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
104. In order to improve living standards for future generations, the economy must
a.
sacrifice consumer goods today.
b.
reduce its investment goods.
c.
increase government spending.
d.
reduce growth in the population.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
105. Given the economy’s existing resources and technology, the only way to enjoy more consumer goods today is to
a.
devote more resources to investment goods today.
b.
accumulate more capital today.
c.
have a slower economic growth rate in the future.
d.
devote more resources to consumer goods in the future.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Levels, Growth Rates, and The Convergence Hypothesis
106. A nation’s supply of capital refers to its level of
a.
b.
c.
d.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
107. Which of the following would a macroeconomist classify as capital?
a.
a software program for an accounting firm
b.
a share of stock in General Electric
c.
a corporate bond from IBM
d.
All of the above are types of capital.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
108. Capital is a(n) ____ variable and investment is a(n) ____ variable.
a.
physical, financial
b.
stock, flow
c.
asset, liability
d.
flow, stock
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
109. Investment is a(n) ____ and capital is a(n) ____ variable.
a.
physical, financial
b.
stock, flow
c.
asset, liability
d.
flow, stock
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
110. A nation’s capital stock is increased by increases in
a.
consumption spending.
b.
government spending.
c.
investment spending.
d.
net exports.
c
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
111. Most of the investment decisions in the U.S. economy are made by
a.
consumers.
b.
businesses.
c.
governmental institutions.
d.
international financial agencies.
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
112. The financing of investment spending is often made possible by
a.
consumer spending.
b.
money supply creation.
c.
borrowing.
d.
tax reductions.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
113. The phrase “capital formation” is synonymous with
a.
investment spending.
b.
buying shares of stock.
c.
creating mutual funds.
d.
purchasing financial assets.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
114. Devoting more of a country’s resources for producing consumer goods means
a.
economy is using it resources for future production.
b.
fewer resources to producing investment goods.
c.
country will grow more rapidly in the future.
d.
productivity of the invested capital is extremely high.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
115. Which of the following would not be classified as capital formation?
a.
buying shares of stock
b.
building a new warehouse
c.
purchasing new construction equipment
d.
All would be considered capital formation.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
116. The profitability of an investment project will increase if
a.
tax rates increase.
b.
real interest rates increase.
c.
real interest rates decrease.
d.
business tax deductions decrease.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
117. The profitability of an investment project will decrease if
a.
tax rates decrease.
b.
real interest rates increase.
c.
real interest rates decrease.
d.
business tax deductions increase.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
118. Because business firms often finance new investments with borrowed money, a key determinant of investment
spending is
a.
tax rates.
b.
the price level.
c.
the rate of inflation.
d.
the real interest rate.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
119. The profit earned from selling an asset for more than you paid for it is called
a.
capital gains.
b.
the real interest rate.
c.
depreciation.
d.
appreciation.
a
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
120. Capital gains are profits that you earn on the sale of your
a.
labor.
b.
money.
c.
financial asset.
d.
economics textbook.
c
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
121. In 2010, in order to stimulate capital investment, President Obama proposed
a.
a reduction in real interest rates.
b.
an increase in the money supply.
c.
increased write-offs for businesses purchasing equipment.
d.
an increase in the tax on capital gains.
c
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
122. To stimulate investment spending, Congress would most likely decrease
a.
personal income taxes.
b.
capital gains taxes.
c.
property taxes.
d.
real interest rates.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
123. In 2008-2009 the U.S. economy provided a
a.
healthy climate for investment spending.
b.
change in aggregate demand that fostered more capital formation.
c.
sluggish climate for investment spending.
d.
booming economy that spurred investment spending.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
124. During the mid to late 1990s, the incentives for investment spending were provided by rising
a.
aggregate demand.
b.
real interest rates.
c.
levels of corporate taxes.
d.
levels of capital gains taxes.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
125. High levels of sales that spur high levels of investment spending is an example of a
a.
vicious circle.
b.
virtuous circle.
c.
convergence circle.
d.
divergence circle.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
126. Low levels of sales that cause low levels of investment spending is an example of a
a.
vicious circle.
b.
virtuous circle.
c.
convergence circle.
d.
divergence circle.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
127. Laws that assign owners the rights to use assets as they see fit are called
a.
human rights.
b.
economic rights.
c.
property rights.
d.
government rights.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
128. Property rights uncertainty will usually cause
a.
lower levels of investment spending.
b.
lower levels of real interest rates.
c.
higher levels of investment spending.
d.
higher levels of real interest rates.
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
129. Properly enforced property rights will usually cause
a.
lower levels of investment spending.
b.
lower levels of real interest rates.
c.
higher levels of investment spending.
d.
higher levels of real interest rates.
c
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Encouraging Capital Formation
130. Studies of data support the view that higher levels of education are associated with higher levels of real
a.
interest rates.
b.
per capita GDP.
c.
price inflation.
d.
income decline.
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Improving Education And Training
131. More education and training usually lead to higher levels of
a.
productivity.
b.
population.
c.
pollution.
d.
import protectionism.
a
Easy
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Improving Education And Training
132. Lower levels of education and training are often associated with low levels of
a.
production.
b.
productivity.
c.
inflation.
d.
both a and b.
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Improving Education And Training
133. In contrast to richer countries, most residents of poorer nations will have
a.
only some primary education.
b.
primary and secondary education.
c.
higher education.
d.
higher levels of productivity.
a
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Improving Education And Training
134. In contrast to poorer countries, most residents of middle-income countries will have
a.
universal primary education.
b.
universal secondary education.
c.
universal higher education.
d.
lower levels of productivity.
a
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Improving Education And Training
135. In the United States, the average level of educational attainment is approximately a
a.
primary education.
b.
secondary education.
c.
higher education.
d.
graduate-level education.
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Improving Education And Training
136. In most rich countries, adult citizens typically have a
a.
primary education.
b.
secondary education.
c.
higher education.
d.
graduate-level education.
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Improving Education And Training
137. In most countries, primary and secondary education is the responsibility of the
a.
private business sector.
b.
religious institutions.
c.
government sector.
d.
household.
c
Moderate
DISC: Productivity and growth
United States – BPROG: Analytic
Productivity and growth
Growth Policy: Improving Education And Training
138. Governments in market economies usually have significant control over
a.
investment spending.
b.
personal consumption spending.
c.
import spending.
d.
education spending.
Moderate