Download Ch 16 Review Sheet KEY

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Chapter 16 Test Review Sheet
The supply factors of economic growth are:
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Improvements in technology
Increases in the supply (stock) of capital goods
Increases in the quantity and quality of natural resources
Increases in the quantity and quality of human resources
The achievement of full employment through time will:
increase the realized rate of economic growth.
Date
Realized economic growth is best represented by a:
move from X on AB to Y on CD.
If an economy's labor productivity and total worker-hours each grew by 3 percent between year 1 and
year 2, how can this be shown using the AD-AS model?
long-run aggregate supply curve shifted to the right.
Labor productivity is measured by:
real output per worker hour.
What would lead to an increase in labor productivity?
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technological advance
more education and training by the labor force
the realization of economies of scale
If the number of worker-hours in an economy is 200 and its labor productivity is 3 units of output per
worker-hour, the economy's real GDP:
$600.
The percentage of the working-age population in the labor force (= employed + officially unemployed)
is called the:
labor force participation rate.
Using PPC AND AD-AS graphs, show growth of production capacity.
PPC:
AD-AS:
A rightward shift of a nation's long-run aggregate supply curve is equivalent to
PPC.
What factors would shift a nation's long-run aggregate supply curve to the right?
an increase in the labor force participation rate
on a
The shifts in long-run and short-run aggregate supply curves from AS1 and AS'1 to AS2 and AS'2 would
most likely result from:
an improvement in technology.
In the United States why has real GDP grown faster than real GDP per capita?
Population growth
More than half the growth of real GDP in the United States is caused by:
increases in the productivity of labor.
Between 1950 and 2005, the long-run average annual rate of growth of real GDP in the United States
was about:
3.5 percent.
Which of the following is the largest contributor to the growth of labor productivity in the United
States?
technological advance
Rising wages for women in the United States have:
increased the percentage of married women in the workforce.
Over the past several decades, the percentage of women in the paid U.S. workforce has:
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increased due to higher wages
expanded job accessibility
changing preferences and attitudes
Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to
capital goods, we would expect:
labor productivity to rise.
Economies of scale refer to:
the fact that large producers may be able to use more efficient
technologies than smaller producers.
The historical reallocation of labor from agriculture to manufacturing in the United States has:
increased the average productivity of labor.
The New Economy is characterized by:
a higher trend rate of productivity growth.
According to the adherents of the New Economy view, the above-normal economic growth in the United
States between 1995 and 2005 was caused by:
increased entrepreneurial activity,
application of information technology,
and global competition.
If the trend of labor productivity is 5 percent per year, the number of years that it will take for the
standard of living to double will be about: (hint: Rule of 70)
14 years.
All of the following are sources of increasing returns and economies of scale except:
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Network effects
Learning-by-doing
Simultaneous consumption
the multiplier effect.
Network effects are:
increases in the value of a product to each user,
including existing users, as the total number of users rises.
All of the following are economic implications of the New Economy except:
an end to the business cycle.
Critics of the idea of a New Economy say that:
it is too early to predict whether recent boosts in U.S.
productivity are permanent or transitory.
Proponents of economic growth make all of the following arguments except:
There is a direct relationship between a growing real GDP
and rising pollution.
Over the past twenty-five years, China has averaged annual growth rates of nearly:
9 percent.
Growth of real per capita income in China has largely resulted from:
increased use of technology and improved technology.
What has not accompanied China's rapid economic growth over the past twenty-five years?
falling per capita income.
Which of the following would best portray long-run economic growth?
A rightward shift of the long-run aggregate supply curve
An increase in which of the following would be most likely to increase long-run economic growth?
Productivity
Critics of economic growth:
argue that economic growth does not resolve socioeconomic problems
such as income inequality.
Proponents of economic growth say that pollution:
occurs, not because of growth, but because common properties
are treated as free goods.
Identify two sources of increase in labor productivity.
On AD-AS graph, show the long-run effect of the growth in productivity on:
Real output
Price level
On a PPC diagram, show the effect of the increase in labor productivity.