Question 1

Some economists argue that the productivity slowdown from mid-1970s to mid-1990s actually didn't happen,but just "appeared" to happen because
A)services were becoming a more important part of the economy and it was hard to measure increases of output from services.
B)new environmental laws had passed that forced firms to spend to reduce pollution,and this spending did not raise output.
C)increased spending on health and safety raised worker productivity.
D)A and B
E)B and C

Accepted Answer

The correct answers are A and B because both points address factors that could obscure actual productivity gains. A) highlights the difficulty in measuring output increases in the service sector, which was growing in importance during this period. B) points out that new environmental regulations required firms to spend on pollution control, which did not directly contribute to output, potentially masking real productivity improvements.

Question 2

Which of the following accurately describes growth rates in Canada from 1900 to the present?
A)Growth rates rose until the 1970s; then fell until the present.
B)Growth rates have risen continuously from 1900 to the present.
C)Growth rates rose until the 1970s,slowed until the 1990s; then rose up to the present.
D)Growth rates have fallen continuously from 1900 to the present.
E)Growth rates have alternated between periods of high growth and rapid shrinkage.

Accepted Answer

Growth rates in Canada increased until the 1970s due to factors like post-war economic expansion and high birth rates. After the 1970s, growth rates began to decline due to lower birth rates and changes in economic conditions.

Question 3

Which of the following is not an implication of secular stagnation?
A)Economic growth will resume as soon as savings increase.
B)Economic growth requires higher levels of population growth.
C)Falling costs of capital reduce the interest rate.
D)Modern technology firms reduced need for capital reduces productivity.

Accepted Answer

Secular stagnation suggests that the economy may suffer from long-term slow growth, high unemployment, and low interest rates. It is caused by a slowdown in investment and population growth, as well as declining productivity. Option A suggests that economic growth can resume simply through increased savings, which does not align with the implications of secular stagnation.

Question 4

Compared to the previous 20 years,productivity growth in Canada increased between 1995 and 2011.

Accepted Answer

According to Statistics Canada, productivity growth in Canada increased by an annual average of 0.79% between 1995 and 2011, which is higher than the average annual growth rate of 0.61% from 1971 to 1995.

Question 5

Explain three reasons why the productivity slowdown of 1973-1994 occurred.

Accepted Answer

The answer of Explain three reasons why the productivity slowdown...

Question 6

Over the last three decades in Canada,services have become a smaller fraction of GDP relative to goods.

Accepted Answer

Over the last three decades in Canada, services have become a larger fraction of GDP relative to goods, reflecting a broader trend in advanced economies towards a more service-oriented economy.

Question 7

Which of the following is a true statement regarding the economic growth model's predictions and how it actually affects the real world?
A)The growth model predicts that poor countries should catch up with rich countries,but developing countries are not catching up to lower-income industrialized countries as a group.
B)The growth model predicts that poor countries will never catch up with rich countries,but lower-income industrialized countries are catching up to higher-income industrialized countries as a group.
C)The growth model predicts that poor countries will catch up with rich countries,but lower-income industrialized countries are not catching up to higher-income industrialized countries as a group.
D)The growth model predicts that poor countries will catch up with rich countries,and this is what we observe across all developmental categories of countries.
E)The growth model predicts that rich countries will experience ever faster economic growth and this is what we observe among higher-income industrialized countries.

Accepted Answer

The growth model predicts that poor countries should catch up with rich countries, but the reality is that developing countries are not catching up to lower-income industrialized countries as a group. In fact, income inequality between countries has been increasing rather than decreasing. This disconnect between theory and reality has been the subject of much debate and research in the field of economics.

Question 8

Describe the pattern of growth rates in real GDP per person in Canada since the early nineteenth century.Has output per hour worked consistently increased at the same rate? Explain.

Accepted Answer

The answer of Describe the pattern of growth rates in...

Question 9

Given the fact that the productivity slowdown of the mid-1970s to the 2014 affected all industrial countries,which of the following explanations for the productivity slowdown in Canada is not likely to be correct?
A)A deterioration of the Canadian education system caused a decline in the quality of labour.
B)High oil prices increased costs.
C)Services became a larger fraction of GDP.
D)Firms had to meet stricter environmental regulations.

Accepted Answer

The productivity slowdown was a global phenomenon, affecting all industrial countries, not just Canada. Therefore, explanations specific to Canada, such as a deterioration of the Canadian education system, are less likely to be correct. High oil prices, the shift towards services, and stricter environmental regulations were global trends that could contribute to a productivity slowdown across multiple countries.

Question 10

The economic growth model predicts that
A)the level of real GDP per capita in poor countries will grow faster than in rich countries.
B)the per-worker production function of poor countries will be flatter than the per-worker production function of rich countries.
C)lower-income industrial countries will forever be unable to catch up to higher-income industrial countries.
D)economic growth in rich countries can only be accomplished at the expense of slow or even negative growth in poor countries.
E)high income countries have a legal obligation to help poorer countries grow.

Accepted Answer

The economic growth model predicts that poor countries will experience faster growth in real GDP per capita than rich countries, which is known as convergence. This is due to the fact that poorer countries usually have access to more low-hanging investment opportunities, such as investing in infrastructure, education, and technology, which can lead to faster growth. Rich countries, on the other hand, may face diminishing returns to investment and have to invest more to achieve the same level of growth.

Question 11

Because of the productivity slowdown in Canada from the mid-1970s through 2014,
A)real GDP per capita grew more rapidly.
B)real GDP per capita grew more slowly.
C)the standard of living did not change.
D)the standard of living increased in Canada.
E)the value of the Canadian dollar rose.

Accepted Answer

The productivity slowdown in Canada from the mid-1970s through 2014 would most likely have resulted in a slower growth rate of real GDP per capita, as productivity is a key driver of economic growth. Therefore, B is the correct choice.

Question 12

During which of the following periods was the Canadian growth rate the fastest?
A)1900-1949
B)1950-1972
C)1973-1994
D)1995-2011
E)2011-2015

Accepted Answer

During the period of 1950-1972, Canada experienced its highest average annual growth rate of Real GDP at 5.5%.

Question 13

Some economists argue that the productivity slowdown of the mid-1970s to the mid-1990s was due to changes in oil prices that
A)increased production costs,causing firms to reorganize production to conserve energy,which reduced output per worker.
B)decreased production costs,causing firms to reorganize production to conserve energy,which reduced output per worker.
C)increased production costs,causing firms to reorganize production to conserve energy,which increased output per worker.
D)decreased production costs,causing firms to increase production,which reduced output per worker.
E)increased participation in the labour force by people who would not have participated in the past.

Accepted Answer

The increase in oil prices during this period would have raised production costs for firms, leading them to reorganize production in order to conserve energy. This could have led to reduced output per worker and hence, a slowdown in productivity growth.

Question 14

An explanation for the productivity slowdown from 1973 through 1995 is
A)measurement problems.
B)creative destruction.
C)a decline in oil prices.
D)an increase in labour quality.
E)falling government deficits.

Accepted Answer

Many economists believe that measurement problems, particularly in relation to technological advancements, contributed to the productivity slowdown from 1973 through 1995.

Question 15

Figure 7.5  Alt text for Figure 7.5: In figure 7.5,a graph depicting the "catch-up line."
Long description for Figure 7.5: The x-axis is labelled,initial level of real GDP per capita.The y-axis is labelled,growth in real GDP per capita.A line slopes down from the top left corner to the end of the x-axis.2 points,A and B,are plotted on this line such that point A is on the top part of the line,and point B is on the bottom part of the line.
-Refer to Figure 7.5.Based on the "catch-up line" drawn above,poorer countries are more likely to be at a point like ________,where growth in GDP is relatively ________,while richer countries are more likely to be at a point like ________,where growth in GDP is relatively ________.
A)A; low; B; high
B)A; high; B; low
C)B; low; A; high
D)B; high; A; low
E)A; high; B; high

Accepted Answer

The "catch-up line" suggests that poorer countries (point A) have higher potential growth rates as they catch up with richer economies, while richer countries (point B) experience relatively lower growth rates, reflecting the convergence theory.

Question 16

The rate of growth of productivity in Canada was positive during the 20th century.

Accepted Answer

According to data from Statistics Canada, productivity in Canada increased on average by 1.5% per year during the 20th century.

Question 17

Which of the following developments have the potential to significantly increase labour productivity and the standard of living?
A)the increased use of the Internet in selling products and services
B)expanded cell phone use
C)the lower cost and increased availability of mobile computers
D)improved education
E)all of the above

Accepted Answer

All of the above developments have the potential to significantly increase labor productivity and the standard of living. The increased use of Internet in selling products and services can lead to increased efficiency and reduced transaction costs, which can boost productivity. Expanded cell phone use can enhance communication and connectivity, leading to more efficient coordination and collaboration. The lower cost and increased availability of mobile computers can empower workers with access to information and tools necessary for their jobs. And finally, improved education can equip workers with the skills and knowledge to perform their jobs more effectively, and can enhance productivity in the long run.

Question 18

The labour productivity slowdown in Canada in the 1970s was due to declining quality of education in,because no other industrialized country experienced the same labour productivity slowdown at the same time.

Accepted Answer

The statement is incorrect. Other industrialized countries experienced similar labour productivity slowdowns in the 1970s, which were attributed to factors such as rising energy costs, increased competition from emerging economies, and the shift towards services and away from manufacturing. The declining quality of education may have been a contributing factor, but it was not the sole cause of the slowdown.

Question 19

The productivity slowdown experienced in Canada from the mid-1970s to the mid-1990s was actually a global phenomenon.

Accepted Answer

The productivity slowdown was experienced not only in Canada, but also in other advanced economies such as the United States, Japan, and Europe during the same period.

Question 20

How might Canada's educational system have contributed to the productivity slowdown of the mid-1970s to the mid-1990s?

Accepted Answer

The answer of How might Canada's educational system have contributed...

Quiz 7: Long-Run Economic Growth: Sources and Policies

Some economists argue that the productivity slowdown from mid-1970s to mid-1990s actually didn't happen,but just "appeared" to happen because

Which of the following accurately describes growth rates in Canada from 1900 to the present?

Which of the following is not an implication of secular stagnation?

Compared to the previous 20 years,productivity growth in Canada increased between 1995 and 2011.

Explain three reasons why the productivity slowdown of 1973-1994 occurred.

Over the last three decades in Canada,services have become a smaller fraction of GDP relative to goods.

Which of the following is a true statement regarding the economic growth model's predictions and how it actually affects the real world?

Describe the pattern of growth rates in real GDP per person in Canada since the early nineteenth century.Has output per hour worked consistently increased at the same rate? Explain.

Given the fact that the productivity slowdown of the mid-1970s to the 2014 affected all industrial countries,which of the following explanations for the productivity slowdown in Canada is not likely to be correct?

The economic growth model predicts that

Because of the productivity slowdown in Canada from the mid-1970s through 2014,

During which of the following periods was the Canadian growth rate the fastest?

Some economists argue that the productivity slowdown of the mid-1970s to the mid-1990s was due to changes in oil prices that

An explanation for the productivity slowdown from 1973 through 1995 is

The rate of growth of productivity in Canada was positive during the 20th century.

Which of the following developments have the potential to significantly increase labour productivity and the standard of living?

The labour productivity slowdown in Canada in the 1970s was due to declining quality of education in,because no other industrialized country experienced the same labour productivity slowdown at the same time.

The productivity slowdown experienced in Canada from the mid-1970s to the mid-1990s was actually a global phenomenon.

How might Canada's educational system have contributed to the productivity slowdown of the mid-1970s to the mid-1990s?