In Studying Economic Growth, A Country's

Economic growth allows people to buy more goods and services.
Economic growth is the expansion of the economy’s production possibilities.
Economic growth is represented by a movement from a point inside the production possibilities curve to a point on the curve.

1 and 2

Technological change is a combination of which two concepts?

Invention and innovation

Jane is considering running for president of Country Y and wants to campaign setting realistic goals for the future of her country. Help Jane determine the future GDP of Country Y, 3 years from now if the present GDP is $1,984,520 and the growth rate is 4%. Round your answer to the nearest whole number.

2232315

If the present GDP for Country Q is $523 with a promising annual growth rate of 25%. What is the future GDP for Country Q, 6 years from now? Round your answer to the nearest whole number.

1995

When it comes to economics and the law, which two of the following are considered to be most important to economic growth?

contractual rights
property rights

Which of the following groups of workers are not included when measuring dollar value per hour contributed to output?

farmers and government workers

Calculate Country A’s future GDP 5 years from now if the current GDP is $8,950 and the expected growth rate is 5%. Round your answer to the nearest whole number.

11423

Which of the following accurately explains the “New Economy” controversy?

Some economists argue that strong short term productivity growth does not indicate higher productivity in the long run.
Some economists argue that technological advances guarantee higher average productivity growth in the long run.

According to proponents to the “New Economy” theory, advancements in technology and communication generate higher productivity growth in the long run.

True

___ is a common measure of productivity used to track growth of GDP per capita.

Dollar value of output per worker hour

Which of the following explains the importance of education in economic growth?

investing in education strengthens technology, investing in education strengthens physical capital,
investing in education strengthens human capital

Which of the following is the correct definition of infrastructure?

Infrastructure is a component of physical capital such as roads and rail systems.

The idea of human capital deepening applies to which two of the following?

averages levels of education in the economy, years of experience that workers have

Low-income countries tend to have lower levels of human capital and physical capital, so an investment in capital deepening should have a larger _________ in these countries than in high-income countries, where levels of human and physical capital are already relatively high.

marginal effect

Calculate the 25 year growth of a low-income economy with a GDP per capita of $3,500 and a growth rate of 11%. Round your final answer to the nearest whole dollar. Do not round any other values.

$3,500(1+0.11)^25, or $47,549.

The accumulated skills and education of workers is also known as ______.

human capital

Technology, physical capital deepening, and human capital deepening all contribute equally to GDP growth.

False

Capital deepening is __________.

an increase by society in the average level of physical and/or human capital per person

Because low-income economies have less technology, they cannot grow as quickly as high-income economies.

False

Education for girls is a good investment in low-income countries because __________________.

it has benefits beyond the current generation,
it is an investment in economic growth, better educated women are more likely to have fewer, healthier and better-educated children

Increased international trade has resulted in convergence of incomes between low-income and high-income countries.

False

Investments in education result in ___________.

increases in technological innovations and inventions, increases in physical capital,
increases in human capital

What is the future GDP of a country , 2 years from now if the present GDP is $356,150 and the growth rate is 4%. Please round your answer to the nearest dollar.

385212

Which of the following is not true?

Advances in technology are only possible in advanced economies. Advances in technology have no impact on worker productivity

A common measure of productivity used to track growth of GDP per capita is ________________

dollar value of output per worker hour

Which of the following are examples of property rights?

The owner of a house is the only party that is able to enter into a contract selling that house.

If you have money in your pocket, you have the right to use that money any way you want.

You trained as an engineer, and you are free to work for any person or group who wants to hire you to work as an engineer.

The use of which of the following during the Industrial Revolution were crucial to the modern economic growth that defines society today.

the steam engine

the power loom

Which of the following refers to the skills and knowledge that make workers productive?

human capital

According to growth accounting studies, which of the following are important contributors to economic growth?

investment in human capital

new ways of doing things

investment in physical capital

Convergence is the idea that ______________________.

low-income countries grow faster than high-income countries

An increase in the average level of physical and/or human capital per person is also called

capital deepening

While low-income countries are able to adapt and use new technology, the society may not have the economic, educational, and public policy institutions to support growth. Therefore, ______________________ .

convergence between high-income and low-income countries may not happen

Which of the following is an example of how the U.S. Bureau of Labor Statistics may overstate the unemployment rate?

People may tell the Census Bureau that they are ready to work and looking for a job but, truly, they are not that eager to work and are not looking very hard at all.

People may have a job, perhaps doing something like yard work, child care, or cleaning houses, but are not reporting the income earned to the tax authorities.

Charles volunteers at a local soup kitchen for approximately 15 hours per week. He is currently not seeking paid work. Is Charles considered unemployed?

Which of the following best describes why the elderly workers have extremely low rates of unemployment?

The elderly who do not have jobs often exit the labor force by retiring, and thus are not counted in the unemployment statistics.

Suppose the adult population over the age of 16 is 237.8 million and the labor force is 153.9 million. What is the labor force participation rate? Round your answer to the nearest tenth.

64.7

Assume there are 20.45 million unemployed people and 396.78 million employed people in a country. What is the unemployment rate?

5.1

Suppose the adult population over the age of 16 is 495 million and the labor force is 94.9 million. What is the labor force participation rate? (round your answer to the nearest 10th)

19.2

Those who classify themselves as underemployed are included in the unemployment rate.

FALSE

Tina was let go from her job last month and has been collecting unemployment benefits. When not actively looking for a job, she volunteers at the local hospital for approximately 20 hours per week. Is Tina considered to be employed?

Tyler is studying economics in college and was asked to calculate the unemployment rate for Country R. If Country R has 7,895 employed people and 321 unemployed people, what is the unemployment rate of Country R?

Suppose the labor force is 94.4 million people, and the number of those employed is 84.1 million people. What is the unemployment rate? Round your answer to the nearest tenth.

10.9

Which of the following statements about the US unemployment rate is true?

The US unemployment rate has never fallen to zero.

Comparing the percentage of the labor force population to the total adult working-age population gives you the labor force participation rate. If the the adult working-age population is is 756 million and the labor force is 652 million what is the labor force participation rate? (round your answer to the nearest 10th)

86.2

The Bureau of Labor Statistics is interested in this years labor participation rate. If there are 350 million working-age adults and 300 million in the labor force, what is the labor participation rate? (round your answer to the nearest 10th)

85.7

Which of the following best defines the underemployed?

individuals who are trained or skilled for one type or level of work but are working in a job that does not utilize their skills

An individual who is not working and not actively looking for employment because he is discouraged by the lack of available jobs is not counted as part of the labor force. Why can this impact the unemployment rate?

Since the individual is not considered part of the labor force, he is not included the unemployment rate.

Which of the following best describes those ‘not in the labor force’?

those who are out of paid work and not actively looking for a job

Calculate the unemployment rate if the number of unemployed people (actively seeking work) is 70.67 million, and the number of employed people is 845.71 million. Round your answer to the nearest tenth.

7.7

Both Karen and Bob are out of work. Karen applies to a few jobs each week, but does not particularly care to be employed. Bob was avidly searching for a job, but a little over a month ago he gave up searching. Who would be counted as unemployed by the Current Population Survey (CPS)?

Karen

All of the following are steps of how the U.S. Bureau of Labor Statistics calculates the unemployment rate, except:

interview about 50,000 US-owned companies

An employer can’t legally pay an employee less than $7.25 per hour, which is the federal minimum wage in 2018. Why does this lead to wage stickiness?

People getting paid the minimum wage will not see a decline in their wages.

An employee who is paid higher than her peers is more productive because she realizes that she would likely suffer a decline in salary if she were to leave her position. Which of the following best describes why her situation could cause wage stickiness?

the efficiency wage theory

The loss of construction jobs during the 2008 housing financial crisis is an example of cyclical unemployment.

True

Which of the following best describes sticky wages?

earnings that don’t adjust quickly to changes in labor market conditions

Which of the following best describes how implicit contracts cause wages to be sticky?

an employer will try to keep wages from falling when the economy is weak and the employee will not expect huge salary increases when the economy is strong

Which of the following can lead to cyclical unemployment?

a stock market crash

Why does the minimum wage cause wages to be sticky?

It is illegal to reduce wages below minimum wage.

Wages are considered sticky when they do not fall in response to a decrease in demand.

True

Which of the following is an example of cyclical unemployment?

Ronald is laid off by his company as part of company reorganization to cut costs to meet slowing demand in the economy.

All of the following are examples of someone who is involuntary unemployed, except:

Tom was let go from his job at The Burger Shack five weeks ago and has yet to search for another job because he wants to earn more than $15/hour.

Which of the following best defines involuntary unemployment?

People are unemployed but willing to work jobs that employ people with similar skills.

Which of the following best describes cyclical unemployment?

Unemployment is closely tied to the business cycle.

Which of the following is an example of cyclical unemployment?

A company has to lay off half of its work force to cut costs in order to make it through the recession.

The logging industry has had a very productive thirty years and as a result, the demand for labor has been increasing a little each year and equilibrium wages rose each year. If the logging industry’s productivity were to slow down, what is likely to happen to equilibrium wages?

wages would continue to rise despite the demand for labor not rising, causing the natural rate of unemployment to rise

Which of the following is an example of a social value-based regulation that can impose a barrier between some willing workers and other willing employers?

a local government not allowing liquor stores be open on Sundays

In the imaginary country of Xurbia, large corporations typically hire employees for the long-term, often for life. Suppose, the proportion of older workers, relative to younger workers, in the Xurbian economy was relatively high. We would expect the natural rate of unemployment in Xurbia to be high.

false

Which of the following examples illustrates structural unemployment?

The factory that Annie has worked at for the past three years has decided to relocate to Mexico. Annie actively looks for a new job but there are no industries that can utilize her skill set within 100 miles of her home.
Tatyana can no longer find a job as a programmer in her home town as all companies started to hire programmers in India.

Which of the following statements about productivity shifts and wages is true?

Adjustments of wages to productivity levels are often not quick.

In some countries, the legally required notice before laying off a worker can be more than three months while the required severance package can be as high as a year’s salary. Such laws will ____________________.

discourage laying off or firing workers

make firms hesitant about hiring workers

All of the following can impact the demand for new workers in the labor market, except:

unemployment benefits

Which of the following is an example of frictional unemployment?

Molly left her job at the packaging science firm and is actively pursing employment at a competitor’s firm.

Phillip has worked at the same bank for many years. He finally quit his job and is now looking for work at other banks.

Which of the following could be a reason why the natural rate of unemployment between the US and the EU is different?

Differences in labor laws