Question 1

Most economists agree that the most important factor contributing to the recent reduction in U.S. labor productivity growth rate has been the increased level of government regulation.

Accepted Answer

A) True 
 B)False

Question 2

Since 1870, U.S. labor productivity growth has averaged roughly 2.1 percent annually.

Accepted Answer

A) True 
 B)False

Question 3

The reason why small changes in productivity growth rates have large long-term effects on economic growth over the long run is that

Accepted Answer

A)  lower productivity growth makes labor discouraged, compounding the problem
B)  lower productivity growth effects on the economy are compounded over the years, leading to large cumulative effects
C)  when the productivity growth rate falls, output actually falls
D)  lower productivity growth for one resource means lower productivity growth for all resources
E)  output usually falls when productivity growsF) A) and D)
G) All of the above

Question 4

If Q is total real output, K is capital in use, L is labor employed, and the productivity of labor grows, other things constant, then

Accepted Answer

A)  K/L rises
B)  L/K rises
C)  Q/L rises
D)  Q/K falls
E)  (Q + K) /L fallsF) C) and D)
G) A) and B)

Question 5

Many people believe that government should promote

Accepted Answer

A)  seriousness
B)  hard work
C)  greater happiness
D)  economic education
E)  wealthF) C) and D)
G) B) and C) C

Question 6

The share of research and development funding supported by the federal government has increased over the past three decades.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following does not contribute to an improved standard of living?

Accepted Answer

A)  increases in the amount and quality of available resources
B)  better technology
C)  lower prices for the necessities of life
D)  improvements in the "rules of the game"
E)  increases in the quality of laborF) B) and E)
G) All of the above

Question 8

Human capital represents

Accepted Answer

A)  the equipment that labor uses on-the-job to improve labor productivity
B)  a direct method of measuring output-per-worker
C)  the education, skills and training embodied in workers
D)  the technology, developed by humans, that is embodied in equipment
E)  the social institutions created by people which promote the accumulation of equipment for productionF) None of the above
G) C) and D)

Question 9

Labor productivity tends to fall as the capital-labor ratio rises.

Accepted Answer

A) True 
 B)False

Question 10

The rules of the game refer to

Accepted Answer

A)  any factor that facilitates production and exchange, such as tax laws and property rights
B)  a gradual but consistent change in the price level until a fair price is attained
C)  the set of election laws that ensure that all elections are fair
D)  the requirements placed on firms in earning a profit
E)  the requirements that households must supply labor to firmsF) A) and D)
G) B) and E)

Question 11

Suppose the growth rate of employment is positive but labor productivity remains unchanged. What will happen to real GDP?

Accepted Answer

A)  it will either decrease or remain constant
B)  it will decrease
C)  it will remain constant
D)  it will either increase or remain constant
E)  it will increaseF) D) and E)
G) None of the above

Question 12

The diminishing slope of the per-worker production function reflects the law of diminishing marginal returns.

Accepted Answer

A) True 
 B)False  True

Question 13

The jump in labor productivity that began in the 1990s occurred mostly in the

Accepted Answer

A)  service producing sectors
B)  agricultural sector
C)  goods producing sectors
D)  auto manufacturing industry
E)  Olympic track and field teamF) B) and E)
G) A) and C)

Question 14

Which of the following would not slow down productivity growth?

Accepted Answer

A)  The composition of the work force changes so that more young people and fewer middle-aged people are working.
B)  The composition of the work force changes so that more women, who enter and leave the work force more frequently than men, are included.
C)  The quality of education decreases.
D)  Investment declines.
E)  Firms switch from providing services to producing goods.F) B) and D)
G) All of the above

Question 15

The growing use of computers has led to a substantial increase in overall U.S. productivity growth since the 1996.

Accepted Answer

A) True 
 B)False

Question 16

Productivity growth averaged approximately 3 percent per year between 1948 and 1973; since that time it has averaged approximately 5 percent annually.

Accepted Answer

A) True 
 B)False  False

Question 17

An improvement in the quality of capital would

Accepted Answer

A)  rotate the per-worker production function upward
B)  make the per-worker production function flatter
C)  shift the per-worker production function downward
D)  rotate the per-worker production function downward
E)  have no effect on the per-worker production functionF) All of the above
G) C) and E)

Question 18

Exhibit 8-1 
-The movement from point A to point B in Exhibit 8-1 could illustrate the result of

Accepted Answer

A)  an increase in the capital stock relative to the work force
B)  an increase in the labor productivity growth rate
C)  an increase in labor productivity because of higher quality capital
D)  all of the above
E)  a and b onlyF) B) and D)
G) A) and B)

Question 19

Between 1982 and 2002, U.S. GDP per capita grew at an average rate of 2.2 percent per year.

Accepted Answer

A) True 
 B)False

Question 20

Applied research is the search for knowledge without regard to how that knowledge will be used.

Accepted Answer

A) True 
 B)False

Exam 8: Productivity and Growth

Most economists agree that the most important factor contributing to the recent reduction in U.S. labor productivity growth rate has been the increased level of government regulation.

Correct AnswerverifiedShow Answer

Since 1870, U.S. labor productivity growth has averaged roughly 2.1 percent annually.

Correct AnswerverifiedShow Answer

The reason why small changes in productivity growth rates have large long-term effects on economic growth over the long run is that

Correct AnswerverifiedShow Answer

If Q is total real output, K is capital in use, L is labor employed, and the productivity of labor grows, other things constant, then

Correct AnswerverifiedShow Answer

Many people believe that government should promote

Correct AnswerverifiedC

The share of research and development funding supported by the federal government has increased over the past three decades.

Correct AnswerverifiedShow Answer

Which of the following does not contribute to an improved standard of living?

Correct AnswerverifiedShow Answer

Human capital represents

Correct AnswerverifiedShow Answer

Labor productivity tends to fall as the capital-labor ratio rises.

Correct AnswerverifiedShow Answer

The rules of the game refer to

Correct AnswerverifiedShow Answer

Suppose the growth rate of employment is positive but labor productivity remains unchanged. What will happen to real GDP?

Correct AnswerverifiedShow Answer

The diminishing slope of the per-worker production function reflects the law of diminishing marginal returns.

Correct AnswerverifiedTrue

The jump in labor productivity that began in the 1990s occurred mostly in the

Correct AnswerverifiedShow Answer

Which of the following would not slow down productivity growth?

Correct AnswerverifiedShow Answer

The growing use of computers has led to a substantial increase in overall U.S. productivity growth since the 1996.

Correct AnswerverifiedShow Answer

Productivity growth averaged approximately 3 percent per year between 1948 and 1973; since that time it has averaged approximately 5 percent annually.

Correct AnswerverifiedFalse

An improvement in the quality of capital would

Correct AnswerverifiedShow Answer

Exhibit 8-1 -The movement from point A to point B in Exhibit 8-1 could illustrate the result of

Correct AnswerverifiedShow Answer

Between 1982 and 2002, U.S. GDP per capita grew at an average rate of 2.2 percent per year.

Correct AnswerverifiedShow Answer

Applied research is the search for knowledge without regard to how that knowledge will be used.

Correct AnswerverifiedShow Answer

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C

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True

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False

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