Economics Module 11 Flashcards
Each of the following can increase the amount of spending in the economy. Which of them does not represent an outward shift in the PPF?
A decrease in unemployment
Which of the following would not increase real GDP per capita?
Population growth
Suppose that the demand for physical capital in the U.S. increased (recall that we introduced this demand in Chapter 17). What impact would this have on interest rates and on the amount of saving in the economy?
Interest rates would increase and savings would increase.
In the previous question, what would be the impact on productivity?
Productivity would increase.
Which of the following policies would not help us to have faster technological growth?
All of the above would help to generate faster technological growth
Facebook had sales of $17.93 billion in 2015 and $27.64 billion in 2016. Calculate the growth in Facebook sales.
54.16%
Interest rates jumped from 6 percent to 9 percent. Select the best answer.
B and C are correct.
In a certain country in 1980, 40 percent of the population smoked, and in 1990 only 30 percent smoked. What is the percentage point change in smoking over that time period?
-10
In a certain country in 1980, 40 percent of the population smoked, and in 1990 only 30 percent smoked. What is the percentage change in smoking over that time period?
-25%
The meaning of economic growth to an economist is best described in which of the following options?
A shift outward in the production possibilities frontier
Which of the following options will be most likely to help real GDP per capita grow in the long run?
Research and development of new technology
A 401k is a retirement plan that provides tax benefits intended to encourage people to save for retirement. Suppose that the U.S. removed the tax benefit associated with 401k plans. Which determinant of productivity growth would be impacted by this policy?
Physical capital
Suppose that a developing country successfully implements reforms to decrease corruption in the court system. Which determinant of economic growth will this impact most directly?
Physical capital
If the economy is on the production possibilities frontier, which of the following might allow the economy to increase its capacity?
Decrease exports
Changes in which of the following is most responsible for the slower economic growth in the period from 1973 to now as compared to 1960 to 1973?
Technology
Which determinant of productivity can help to explain the slowdown in growth since 2008, but not the slowdown from 1973 to 1995?
Capital
Which factor best explains changes in the productivity of U.S. workers since 1960?
Output per hour
Given the following policies, which is most likely to increase economic growth in the long run? Consider only the direct effects.
Increase education spending
Suppose the U.S. government increased its spending on infrastructure and paid for this increased spending with a tax on consumption. How would this policy affect economic growth?
Increase economic growth
Suppose that the U.S. government began to pay for a portion of everyone’s college education, and it paid for this by increasing taxes on business investment. How would this policy affect economic growth?
We cannot tell
Which of the following will contribute to an increase in real GDP in a year, assuming that the nation is at full employment? [Will students know why increases in consumption or government spending are not the answers? I get short-run, long-run, but the question says in a year, so that seems pretty short-run to me, in macro terms]
An increase in productivity.
What effect will increased spending have on real GDP if the country is already at full employment?
An increase in spending will only raise real GDP slightly because it will only increase production for a very short period of time.
Which of the following will contribute to an increase in real GDP in 10 years, assuming the economy is at full employment?
An increase in productivity.
How does productivity cause changes in real GDP? [Again, this answers the first question. ]
Expanded productivity increases real output, thus increasing real GDP.
Which of the following could increase productivity? Select all that apply.
a
New technology
c
Increased capital
d
Increased skills in the workforce
Suppose the government creates an extra tax break for people who save more of their income. Will this increase growth, and how?
It will increase growth by increasing physical capital.
Suppose the government increases public funding for employers to provide worker training. Will this increase growth, and how?
It will increase growth by increasing human capital.
Suppose that the government decreases the sales tax. How will this impact growth?
All of the above:
It will decrease growth by decreasing physical capital.
It will decrease growth by decreasing human capital.
It will decrease growth by hindering technology growth.
