Question 1

Real GDP was $4,719 billion in Year 1 and $4,848 billion in Year 2. In contrast, real GDP per capita in Year 1 was $19,261, but in Year 2 it was only $19,162. Why did one measure increase while the other measure decreased?

Accepted Answer

A)   Real GDP indicates the level of industrial production and provides a measure of the economic strength of the nation; it is the only valid measure of economic growth.
B)   Inflation occurred during this period; therefore the two measures are not comparable.
C)   Population increased during this time period so real GDP per capita data reflect this change.
D)   Real GDP per capita measures changes in labour productivity that are not captured by a simple measure like real GDP.E) A) and B)
F) A) and C)

Question 2

-Refer to the above diagram. If there is a movement away from the full employment of resources in an economy with production possibilities curve AB, this can be shown by:

Accepted Answer

A)   a shift of the curve from AB to CD.
B)   a movement from point 3 to point 1.
C)   a movement from point 2 to point 4.
D)   point 5 in the diagram.E) A) and D)
F) B) and D)

Question 3

The case against economic growth is often made using which of the following arguments?

Accepted Answer

A)   Limiting growth will contribute to more income equality across nations.
B)   Common property resources need to be protected by the price system.
C)   Economic growth permits us to "make a living," but it does not provide us with "the good life."
D)   Economic growth will contribute to more economic security, but it will also produce more boring life styles.E) B) and C)
F) C) and D)

Question 4

-Refer to the above diagram. Assume a nation's current production possibilities are represented by the curve AB. Positive economic growth would best be indicated by a:

Accepted Answer

A)   shift in the curve from AB to CD.
B)   shift in the curve from AB to EF.
C)   movement from point 1 to point 2.
D)   movement from point 3 to point 4.E) None of the above
F) A) and B)

Question 5

What economic concept would be most closely associated with a situation where an aluminum plant uses extensive computerization on the production line to reduce per-unit costs of production?

Accepted Answer

A)   infrastructure
B)   human capital
C)   network effects
D)   economies of scaleE) B) and D)
F) B) and C)

Question 6

Poorer follower countries can grow much faster than leader countries because they can simply adopt existing technologies from richer leader countries.

Accepted Answer

A) True 
 B)False

Question 7

Which is a demand factor in economic growth?

Accepted Answer

A)   more human and natural resources
B)   technological progress and innovation
C)   an increase in the economy's stock of capital goods
D)   an increase in total spending in the economyE) C) and D)
F) A) and D)

Question 8

If a nation's real GDP is growing by 3 percent per year, its real domestic output will double in approximately:

Accepted Answer

A)   21 years.
B)   23 years.
C)   29 years.
D)   42 years.E) All of the above
F) C) and D)

Question 9

-An outward shift of a nation's production possibilities curve:

Accepted Answer

A)   ensures the nation of an increase in real GDP per capita.
B)   could increase the nation's real GDP, but not the real- GDP per capita.
C)   could reduce the nation's real GDP.
D)   corresponds to a leftward shift of the nation's long-run aggregate supply curve.E) None of the above
F) B) and C)

Question 10

Economic well-being in Canada is understated by growth rates because they:

Accepted Answer

A)   account for pollution expenditures.
B)   don't account for improvement in products.
C)   account for illegal activity.
D)   don't account for the slowdown in productivity.E) A) and B)
F) A) and C)

Question 11

Simultaneous consumption is a source of increasing returns and economies of scale.

Accepted Answer

A) True 
 B)False

Question 12

Labour productivity may best be defined as:

Accepted Answer

A)   total output/worker-hours.
B)   nominal GDP minus real GDP.
C)   the ratio of real capital to worker-hours.
D)   the annual increase in nominal GDP per worker.E) B) and D)
F) A) and B)

Question 13

Real GDP was $9,950 billion in Year 1 and $10,270 billion in Year 2. The population rose from 270 million in Year 1 to 275 million in Year 2. What was the approximate increase in real GDP per capita rate from Year 1 to Year 2?

Accepted Answer

A)   1.3 percent
B)   2.1 percent
C)   3.3 percent
D)   4.2 percentE) A) and B)
F) C) and D)

Question 14

An increase in the quantity and quality of natural resources is a demand factor for economic growth.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would not be expected to increase labour productivity?

Accepted Answer

A)   technological advance
B)   the acquisition of more education and training by the labour force
C)   an increase in the size of the labour force
D)   the realization of economies of scaleE) None of the above
F) A) and C)

Question 16

Economic well-being in Canada is overstated by growth rates because they don't account for:

Accepted Answer

A)   increases in services.
B)   increase in leisure time.
C)   improvements in product quality.
D)   adverse effects on the environment.E) A) and B)
F) None of the above

Question 17

Which of the following is correct?

Accepted Answer

A)   total output = labour productivity/worker-hours
B)   labour productivity = worker-hours/total output
C)   total output = worker-hours × labour productivity
D)   worker-hours = labour productivity × total outputE) B) and D)
F) B) and C)

Question 18

Between 1945 - 2011, the labour force in Canada has increased by about:

Accepted Answer

A)   13.5 million workers.
B)   18 million workers.
C)   4.5 million workers.
D)   15 million workers.E) B) and C)
F) B) and D)

Question 19

Real GDP or total output in any year is equal to:

Accepted Answer

A)   labour inputs divided by resource outputs.
B)   labour productivity multiplied by real output.
C)   worker-hours multiplied by labour productivity.
D)   worker-hours divided by labour productivity.E) A) and D)
F) A) and C)

Question 20

Which of the following statements is correct?

Accepted Answer

A)   between 1961 to 2011, Canadian real GDP has grown at about 3.3 percent per year and real GDP per capita has grown at about 2.1 percent per year.
B)   between 1961 to 2011, Canadian real GDP has grown at about 2.1 percent per year and real GDP per capita has grown at about 3.3 percent per year.
C)   between 1961 to 2011, Canadian real GDP and real GDP per capita have both grown at about 4 percent per year.
D)   between 1961 to 2011, Canadian real GDP and real GDP per capita have both grown at about 2 percent per year.E) A) and D)
F) A) and C)

Exam 6: Economic Growth

Simultaneous consumption is a source of increasing returns and economies of scale.

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Which of the following would not be expected to increase labour productivity?

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The case against economic growth is often made using which of the following arguments?

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Poorer follower countries can grow much faster than leader countries because they can simply adopt existing technologies from richer leader countries.

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Economic well-being in Canada is overstated by growth rates because they don't account for:

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Real GDP or total output in any year is equal to:

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Which of the following statements is correct?

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Labour productivity may best be defined as:

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Which of the following is correct?

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Real GDP was $9,950 billion in Year 1 and $10,270 billion in Year 2. The population rose from 270 million in Year 1 to 275 million in Year 2. What was the approximate increase in real GDP per capita rate from Year 1 to Year 2?

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An increase in the quantity and quality of natural resources is a demand factor for economic growth.

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What economic concept would be most closely associated with a situation where an aluminum plant uses extensive computerization on the production line to reduce per-unit costs of production?

Correct AnswerverifiedShow Answer

If a nation's real GDP is growing by 3 percent per year, its real domestic output will double in approximately:

Correct AnswerverifiedShow Answer

-Refer to the above diagram. Assume a nation's current production possibilities are represented by the curve AB. Positive economic growth would best be indicated by a:

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-Refer to the above diagram. If there is a movement away from the full employment of resources in an economy with production possibilities curve AB, this can be shown by:

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-An outward shift of a nation's production possibilities curve:

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Between 1945 - 2011, the labour force in Canada has increased by about:

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Economic well-being in Canada is understated by growth rates because they:

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Real GDP was $4,719 billion in Year 1 and $4,848 billion in Year 2. In contrast, real GDP per capita in Year 1 was $19,261, but in Year 2 it was only $19,162. Why did one measure increase while the other measure decreased?

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Which is a demand factor in economic growth?

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