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Commerce and BusinessbackBusinessbackPrinciples of EconomicsbackEconomicsbackPractice Set 2495back

Long-run Economic Growth

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Question 1
Free
Multiple Choice

Over a long period of time,perhaps many years,changes in real GDP come primarily from

Choose correct answer/s
A

upward shifts of the AS curve.

B

upward shifts of the AE curve.

C

rightward shifts of the AD curve.

D

continuous increases in potential GDP.

E

leftward shifts of the AD curve.

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Question 2
Free
Multiple Choice

Between the years 1960 and 2014,the Canadian economy experienced growth in real GDP at an average annual rate of ________ %.

Choose correct answer/s
A

0.7

B

1.2

C

1.9

D

3.3

E

6.3

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Question 3
Free
Multiple Choice

In the long run,changes in average material living standards are best shown by

Choose correct answer/s
A

growth in real GDP.

B

population growth.

C

growth in real per capita GDP.

D

improvements in fiscal policy.

E

improvements in monetary policy.

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Question 4
Free
Multiple Choice

The compounding of economic growth rates means that

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A

a large increase in investment today has little effect on national income over the long run.

B

small changes in sustained growth rates can have a significant impact on national income over several decades.

C

consumers should not save,given the low real returns that compounding produces.

D

a 10% annual rate of return will double an investment in less than 6 years.

E

a 2% annual growth rate of GDP will double national income in 27 years.

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Question 5
Free
Multiple Choice

If per capita GDP in a richer country grows at a faster annual rate than in a poorer country,

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A

the gap between their standards of living will widen over time.

B

the gap between their standards of living will close over time.

C

the gap between their standards of living will close over time as long as the rate of population growth is higher in the poorer country.

D

whether the gap in living standards widens or closes over time depends on the absolute size of the relative growth rates.

E

the difference in their living standards will not change over time.

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Question 6
Multiple Choice

If GDP in a richer country grows at the same annual rate as in a poorer country,the

Choose correct answer/s
A
gap between their standards of living will widen over time.
B
gap between their standards of living will close over time.
C
gap between their standards of living will close over time as long as the rate of population growth is lower in the poorer country.
D
gap between their standards of living will close over time as long as the rate of population growth is lower in the richer country.
E
difference in their living standards will not change over time.
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Question 7
Multiple Choice

A common measure of a country's level of productivity is

Choose correct answer/s
A
the average efficiency of capital.
B
the capital-output ratio.
C
output per capita.
D
output per unit of labour input.
E
per capita GDP.
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Question 8
Multiple Choice

A common measure of a country's rate of economic growth is

Choose correct answer/s
A
the marginal efficiency of capital.
B
the capital-output ratio.
C
the level of output per capita.
D
the change in output per capita.
E
the level of real gross domestic product.
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Question 9
Multiple Choice

Over the long term,by far the most potent force for raising average material living standards is

Choose correct answer/s
A
economic growth.
B
reducing inefficiencies.
C
redistributing income.
D
increasing the money supply.
E
appropriate fiscal policies.
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Question 10
Multiple Choice

If real income grows at approximately 2% per year,the number of years it will take for real income to double is approximately

Choose correct answer/s
A
5.
B
12.
C
24.
D
36.
E
72.
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Question 11
Multiple Choice

If real income grows at approximately 4% per year,the number of years it will take for real income to double is approximately

Choose correct answer/s
A
5.
B
12.
C
18.
D
36.
E
72.
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Question 12
Multiple Choice

Of the variables listed below,the best measure of a nation's average material standard of living is

Choose correct answer/s
A
nominal GDP.
B
percent change in nominal GDP.
C
per capita real GDP.
D
per capita nominal GDP.
E
real GDP.
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Question 13
Multiple Choice

The theory of economic growth concentrates on the ________ over the long run,not on ________ .

Choose correct answer/s
A
growth of investment in capital goods; short-run fluctuations of investment
B
growth of real GDP; growth of potential GDP
C
factor utilization rates; growth of the supplies of factors
D
factor utilization rates; growth of real GDP
E
growth of potential output; fluctuations of output around potential
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Question 14
Multiple Choice

Which of the following is the best example of the acquisition of human capital?

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A
A worker takes a training course that increases his/her productivity.
B
A worker receives new machinery enabling him/her to do the amount of work that was formerly done by two workers.
C
A worker communicates more quickly and accurately with suppliers because of upgrades to communications software.
D
A government-sponsored program increases the amount of investment available per worker.
E
A computer chip manufacturer introduces a faster processor for micro-computing.
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Question 15
Multiple Choice

The four major determinants of economic growth include all of the following EXCEPT

Choose correct answer/s
A
technological improvement.
B
growth in physical capital.
C
growth in human capital.
D
growth in financial capital.
E
growth in the labour force.
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Question 16
Multiple Choice

If a country transfers resources from the production of consumption goods to the production of capital goods,the result will be to

Choose correct answer/s
A
raise future consumption.
B
raise current living standards.
C
decrease the long-run growth rate.
D
lower future living standards.
E
raise current consumption.
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Question 17
Multiple Choice

One of the benefits of long-run economic growth is

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A
growth in nominal GDP greater than real GDP.
B
decreased productive capacity.
C
a greater ability to reduce inequality.
D
increased future interest rates.
E
decreased current saving and increased current consumption.
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Question 18
Multiple Choice

For a given level of technology,a more rapid rate of economic growth can probably be achieved only if a country's citizens are prepared to

Choose correct answer/s
A
redistribute income.
B
sacrifice some present consumption.
C
increase their demand for goods and services.
D
increase exports.
E
decrease interest rates.
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Question 19
Multiple Choice

The costs of economic growth include

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A
declining future living standards.
B
current saving must be sacrificed to increase investment in capital goods.
C
improvements in technology.
D
the effects on workers whose skills are made obsolete by technical change.
E
reduced interest rates.
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Question 20
Multiple Choice

Long-run economic growth can help alleviate the problems of poverty by

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A
creating new low-paying jobs for the unemployed.
B
generating more resources that can be used to reduce income inequality.
C
reallocating income away from low-value production to increase the incentives for high-value production.
D
requiring increased saving on the part of most of the population.
E
increasing future consumption for the middle class.
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