Chapter Eighteen: Chapter Quiz -- Economic Growth and Productivity

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  1. Which of the following is not an example of extensive growth?
      2. population growth
      increase in the capital stock
      immigration
      discovery of a new way to harness solar energy
      discovery of a new oil field

  2. Suppose that three workers can produce $150 worth of toy tractors in one hour. Labor productivity is
      3. $150
      $100
      $50
      $0
      Cannot tell from the information provided.

  3. Suppose that economic growth is 6%, labor hours grow 4%, and the capital stock grows 8%. Labor and capital split national income equally. The growth rate of multifactor productivity is
      4. 0%
      2%
      -2%
      6%%
      18%

  4. The economist named Thomas Malthus tagged economics as the "Dismal Science" because
      5. he found economics extremely boring.
      he believed that diminishing marginal returns to land productivity would lead to mass poverty and starvation.
      he believed that diminishing returns to labor meant that wages would fall towards zero.
      both (b) and (c)

  5. Labor productivity is procyclical because
      6. firms practice labor hoarding.
      firms reduce their labor by less than they reduce output during recessions.
      firms ask employees to worker harder and handle more volume during booms.
      all of the above
      none of the above

  6. Capital productivity could increase for all of the following reasons except
      7. labor inputs increase
      technological advancement
      an increase in the quality of the labor force
      an increase in the capital stock

  7. Multifactor productivity growth is
      8. a weighted average of the growth in resource inputs.
      growth due to technological change, broadly defined.
      growth due to population growth.
      growth due to an increase in the capital stock.
      All of the above.

  8. Which government policy would likely lead to higher long run economic growth?
      9. Reducing the sales tax and increasing the income tax.
      Indexing the capital gains tax to inflation so that the real capital gains tax falls.
      Larger government spending, holding all else equal.
      Faster rates of growth of the money supply.
      All of the above.

  9. The Rule of 69 works not just for GDP per capita but for any growth rate.
      10. True
      False

  10. Multifactor productivity is a better measure of increases in the standard of living of workers. The advantage of labor productivity, on the other hand, is that it helps to isolate technological change.
      11. True
      False
 
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