Question 1

Economic growth is relatively stable when consumers and businesses have a good idea of the likely rate of inflation in the near future.

Accepted Answer

When consumers and businesses have a good idea about the likely rate of inflation in the near future, they can plan their spending and investment accordingly, which results in a stable economic growth. If inflation rates are unpredictable, it can lead to uncertainty, which in turn can lead to a decline in consumer and business confidence, resulting in a negative impact on economic growth.

Question 2

List and describe three factors that increase productivity growth.

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Question 3

Country A and Country B had the same real GDP per capita in 2000.However,Country A's real GDP per capita had doubled by 2010,but it took until 2050 for Country B's real GDP per capita to double.Use the Rule of 70 to explain the discrepancy.

Accepted Answer

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Question 4

In general,free societies have more economic growth than totalitarian societies.

Accepted Answer

This is because free societies allow for innovation, entrepreneurship, and competition, which fosters productivity and economic development. In totalitarian societies, government control stifles these factors and restricts economic growth.

Question 5

There is a positive correlation between economic freedom and high per capita real GDP.

Accepted Answer

Numerous studies and analyses have found a strong positive correlation between economic freedom and high per capita real GDP. Countries that enable their citizens and businesses to pursue economic activity with minimal government interference and regulation tend to have higher levels of prosperity and economic growth.

Question 6

In August 2013,Russia's State Statistics Committee reported that its growth rate fell to 1.2% in the second quarter of 2013.
a.If this rate of growth continues,how long will it take for Russia's GDP to double?
b.President Putin was hoping for a 5% growth rate.If Russia achieves a 5% growth rate,how long will it take for Russia's GDP to double?

Accepted Answer

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Question 7

Why is productivity such an important source of economic growth,and how does it relate to standards of living?

Accepted Answer

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Question 8

What are the sources of productivity growth in the labor market?

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Question 9

In July 2013,Brazil's Ministry of Finance announced that the GDP forecast for the year had been lowered to 3% from 3.5%.Why bother to announce a 0.5% difference in GDP growth? (Explain why a 0.5% change in the growth rate is significant,aside from the lower current GDP. )

Accepted Answer

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Question 10

How has growth in the labor force affected economic growth in the United States?

Accepted Answer

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Question 11

The year-over-year growth rate of real GDP in the United States in the fourth quarter of 2012 was 1.5%.About how long will it take our economy to double in size at this rate?

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Question 12

Some countries block access to social media because of fears that opposition to the government will be coordinated through social media.What effect would blocking social media have on economic growth in these countries,all other things being equal?

Accepted Answer

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Question 13

Assume that output = 4[(a × L)+ (b × K)+ (c × H)+ (d × N)].Assume that a = 100,b = 2,000,c = 500,and d = 30.Complete the following table.
L
K
H
N
Q
100
100
100
100
200
100
100
100
100
200
100
100
100
100
200
100
100
100
100
200
Explain how an increase in each input in turn affects output.

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Question 14

How is it possible for GDP per capita to increase when the standard of living in a country has in fact deteriorated?

Accepted Answer

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Question 15

If Macronomica has a growth rate of 2.6% per year,how long will it take for its output to double?

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Question 16

A stable financial system permits reliable information about prices and strong economic growth.

Accepted Answer

A stable financial system helps to ensure that prices accurately reflect supply and demand and that economic growth is sustainable. This allows businesses and individuals to make informed decisions about investments and spending, and helps to prevent financial crises and recessions.

Question 17

Use a production function to show that having more people will not automatically lead to a better standard of living.

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Question 18

A politician in a developing country has vowed to double GDP per capita within eight years.What annual growth rate (approximately)would be necessary to attain this target? _________ (Round to two decimal places. )Has this rate of growth been achieved by any developing country in the last 20 years? (Choose one: Yes/No)

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Question 19

In August 2013,Brazil announced that the economy grew 3.3% year on year in the second quarter.At this rate,how long will it take for its GDP to double?

Accepted Answer

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Question 20

Explain why real GDP per capita is a good indicator of how an economy grows over time.

Accepted Answer

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Quiz 7: Economic Growth