Question 1

From 1982 to 1992 North Samaria's economy grew at an annual rate of 3.5%,but from 1992 to 2002 North Samaria's economy grew by only 1% per year.In 1992 Samaria's per capita income was $8000.How much higher would North Samaria's per capita income have been in 2002 if growth from 1992 to 2002 had been 3.5% rather than 1%?

Accepted Answer

If the growth rate had been 3.5% from 1992 to 2002, the per capita income would have been $8000 * (1.035)^10 = $11,280. With a 1% growth rate, it would be $8000 * (1.01)^10 = $8,805. The difference is $11,280 - $8,805 = $2,475. However, the closest option is $2448, which suggests a rounding or calculation discrepancy in the options provided.

Question 2

Harvey Lithwick found that labour's contribution to output growth in Canada since 1891 was attributable to all the factors below except

Accepted Answer

Harvey Lithwick's findings indicated that labour's contribution to output growth was due to rising population, increased labour force participation, and higher educational levels, but not an increase in the number of hours worked per person.

Question 3

Suppose the current level of output is 5000,and the elasticity of output with respect to labour is 0.7.A 10% increase in labour would increase the current level of output to

Accepted Answer

C

Question 4

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If the elasticities output with respect to capital and labour are 0.3 and 0.7 respectively,how much is the productivity growth?

Accepted Answer

The answer of Suppose the rate of economic growth in...

Question 5

Suppose the current level of output is 5000.If the elasticities of output with respect to capital and labour are 0.3 and 0.7 respectively,a 10% increase in capital combined with a 5% increase in labour and a 5% increase in productivity would increase the current level of output to

Accepted Answer

The percentage increase in output is calculated as: (0.3 * 10%) + (0.7 * 5%) + 5% = 3% + 3.5% + 5% = 11.5%. Therefore, the new output level is 5000 * (1 + 0.115) = 5575.

Question 6

An economy's output of goods and services depends on all of the following except

Accepted Answer

The interest rate affects investment decisions and the cost of borrowing, but it does not directly impact the quantity or productivity of inputs such as labor and capital.

Question 7

Analysis of the Canadian economy found that

Accepted Answer

The answer of Analysis of the Canadian economy found that
...

Question 8

Over the past year,output grew 6%,capital grew 2%,and labour grew 4%.If the elasticities of output with respect to capital and labour are 0.3 and 0.7 respectively,how much did productivity grow?

Accepted Answer

The correct answer is B.The elasticity of output with respect to capital is 0.3, and the elasticity of output with respect to labor is 0.7. The growth rate of capital is 2%, and the growth rate of labor is 4%. Therefore, the contribution of capital to output growth is 0.3 * 2% = 0.6%, and the contribution of labor to output growth is 0.7 * 4% = 2.8%. The total growth rate of output is 6%, so the growth rate of productivity is 6% - 0.6% - 2.8% = 2.6%.

Question 9

Suppose the current lever of output is 5000.A 10% increase in productivity would increase the current level of output to

Accepted Answer

A 10% increase in productivity means the output will increase by 10% of 5000, which is 500. Therefore, the new output level will be 5000 + 500 = 5500.

Question 10

Over the past year,output grew 3%,capital grew 4%,and labour grew 3%.If the elasticities of output with respect to capital and labour are 0.3 and 0.7 respectively,how much did productivity grow?

Accepted Answer

Productivity growth can be calculated using the formula: Productivity Growth = Output Growth - (Elasticity of Capital * Capital Growth) - (Elasticity of Labour * Labour Growth). Substituting the given values: Productivity Growth = 3% - (0.3 * 4%) - (0.7 * 3%) = 3% - 1.2% - 2.1% = -0.3%.

Question 11

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If labour contribution to economic growth is 14 percent,how much is the elasticity of output with respect to labour?

Accepted Answer

The formula for elasticity of output with respect to labor is:

Elasticity of Output w.r.t. Labor = (Contribution of Labor to Economic Growth / Labor Growth) * (Output Growth / Economic Growth)

Given, 
Economic Growth = 25%
Capital Growth = 30%
Labor Growth = 20%
Contribution of Labor to Economic Growth = 14%

Output Growth = (Economic Growth) * (1 + Elasticity of Output w.r.t. Capital)
             = 25% * (1 + 30%) = 32.5%

Now, 
Elasticity of Output w.r.t. Labor = (14% / 20%) * (32.5% / 25%) 
                                 = 0.7
                                 
Therefore, the best choice is B with the explanation that the elasticity of output with respect to labor is 0.7.

Question 12

Suppose the current level of output is 5000.If the elasticities of output with respect to capital and labour are 0.3 and 0.7 respectively,a 10% increase in capital combined with a 5% increase in labour would increase the current level of output to

Accepted Answer

The elasticity of output with respect to capital is 0.3, which means that a 10% increase in capital will increase output by 3%. The elasticity of output with respect to labour is 0.7, which means that a 5% increase in labour will increase output by 3.5%. Therefore, a 10% increase in capital combined with a 5% increase in labour would increase output by 3% + 3.5% = 6.5%. This would increase the current level of output from 5000 to 5000 * 1.065 = 5325.

Question 13

The elasticity of output with respect to capital

Accepted Answer

The elasticity of output with respect to capital is defined as the percentage change in output resulting from a one percent increase in the capital stock. Option A is incorrect because it does not account for the proportionate increase in output. Option C is incorrect because the elasticity of output with respect to capital can be either less than or greater than one depending on the level of capital utilization. Option D is incorrect because there is no direct mathematical relationship between the elasticity of output with respect to capital and labor.

Question 14

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If capital contribution to economic growth is 9 percent,how much is the elasticity of output with respect to capital?

Accepted Answer

The elasticity of output with respect to capital is calculated by dividing the capital's contribution to economic growth by the capital growth rate. Here, it is 9% / 30% = 0.3.

Question 15

Total factor productivity growth is that part of economic growth due to

Accepted Answer

Total factor productivity growth refers to the portion of output growth that cannot be explained by the growth in inputs such as capital and labor, and is often attributed to technological progress or efficiency improvements.

Question 16

The major source of economic growth is

Accepted Answer

Economic growth is driven by a combination of capital, labor, and technology, as all contribute to increasing productivity and output.

Question 17

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If the elasticities output with respect to capital and labour are 0.3 and 0.7 respectively,how much is the labour contribution to economic growth?

Accepted Answer

The answer of Suppose the rate of economic growth in...

Question 18

Growth accounting equation

Accepted Answer

The growth accounting equation measures empirically the relative importance of the sources of output growth, is the production function written in growth rate form, and is used to calculate the total factor productivity. Therefore, all of the above statements are correct.

Question 19

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If the elasticities output with respect to capital and labour are 0.3 and 0.7 respectively,how much is the capital contribution to economic growth?

Accepted Answer

Capital contribution to economic growth = (Elasticity of output with respect to capital * Capital growth rate)= (0.3 * 30)= 9%

Question 20

Suppose the current level of output is 5000,and the elasticity of output with respect to capital is 0.4.A 10% increase in capital would increase the current level of output to

Accepted Answer

The answer of Suppose the current level of output is...

Quiz 6: Long-Run Economic Growth

Harvey Lithwick found that labour's contribution to output growth in Canada since 1891 was attributable to all the factors below except

Suppose the current level of output is 5000,and the elasticity of output with respect to labour is 0.7.A 10% increase in labour would increase the current level of output to

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If the elasticities output with respect to capital and labour are 0.3 and 0.7 respectively,how much is the productivity growth?

Suppose the current level of output is 5000.If the elasticities of output with respect to capital and labour are 0.3 and 0.7 respectively,a 10% increase in capital combined with a 5% increase in labour and a 5% increase in productivity would increase the current level of output to

An economy's output of goods and services depends on all of the following except

Analysis of the Canadian economy found that

Over the past year,output grew 6%,capital grew 2%,and labour grew 4%.If the elasticities of output with respect to capital and labour are 0.3 and 0.7 respectively,how much did productivity grow?

Suppose the current lever of output is 5000.A 10% increase in productivity would increase the current level of output to

Over the past year,output grew 3%,capital grew 4%,and labour grew 3%.If the elasticities of output with respect to capital and labour are 0.3 and 0.7 respectively,how much did productivity grow?

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If labour contribution to economic growth is 14 percent,how much is the elasticity of output with respect to labour?

Suppose the current level of output is 5000.If the elasticities of output with respect to capital and labour are 0.3 and 0.7 respectively,a 10% increase in capital combined with a 5% increase in labour would increase the current level of output to

The elasticity of output with respect to capital

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If capital contribution to economic growth is 9 percent,how much is the elasticity of output with respect to capital?

Total factor productivity growth is that part of economic growth due to

The major source of economic growth is

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If the elasticities output with respect to capital and labour are 0.3 and 0.7 respectively,how much is the labour contribution to economic growth?

Growth accounting equation

Suppose the rate of economic growth in Mainland was 25 percent,capital growth 30 percent,and labour growth 20 percent.If the elasticities output with respect to capital and labour are 0.3 and 0.7 respectively,how much is the capital contribution to economic growth?

Suppose the current level of output is 5000,and the elasticity of output with respect to capital is 0.4.A 10% increase in capital would increase the current level of output to