Term
1. If the amount of capital decreases, then generally
a. labor productivity declines.
b. long-term economic growth increases.
c. labor productivity increases.
d. potential GDP increases. |
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Definition
| a. labor productivity declines. |
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Term
2. If real GDP is growing at 3 percent and the population is growing at 1 percent,
approximately how many years will it take for real GDP per person to
double?
a. 23 years
b. 70 years
c. 35 years
d. 50 years. |
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Definition
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Term
3. According to the new growth theory, firms are more likely to devote resources
to research and development when
a. the country is in recession.
b. they expect to earn profits from successful R&D.
c. it is easy to copy new techniques of other firms.
d. the country has limited the amount of international trade it allows. |
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Definition
| b. they expect to earn profits from successful R&D. |
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Term
4. Which theory of economic growth predicts that real GDP per person in all
nations will converge at an amount that exceeds the subsistence level?
a. the classical theory
b. the neoclassical theory
c. the new growth theory
d. All growth theories make this prediction. |
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Definition
| b. the neoclassical theory |
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Term
5. Growth in labor productivity ____ potential GDP and ____ real GDP per
person.
a. increases; has no effect on
b. increases; increases
c. has no effect on; increases
d. increases; decreases |
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Definition
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