Economic Growth review

a. an decrease in quantity and quality of education

• Increase economic growth

• Decrease economic growth

• No change in economic growth

d. an increase in the government deficit following a decrease in personal income taxes.

• increased economic growth

• decreased economic growth

• no change in economic growth

GDP per capita is the best measure of a nation’s (3 words)

Answer explanation

Standard of Living

An increase in which of the following would be most likely to increase long-run growth?

• Pension payments
• unemployment compensation
• tariffs on imported capital goods
• tariffs on imported oil
• subsides to businesses for purchases of capital goods

Check the three types of capital that create economic growth.

• Human Capital

• Technology

• Physical capital

• trading capital

The rule of 70 indicates that a 7% annual increase in the potential level of real GDP would lead to the potential output doubling in about (a)   years.

What is the formula for calculating real GDP per capita?

• C+I+G+Xn

• P x Q

• real gdp/population

Which of the following will happen if a country’s government reduces business taxes?

• The short-run Phillips curve will shift to the right.
• The short-run aggregate supply curve will shift to the right.
• The long-run aggregate supply curve will shift to the left.
• The aggregate demand curve will shift to the left.
• The demand curve for loanable funds will shift to the left.

For a given population and a given quantity of labor employed, what will happen to aggregate production and income per capita if there is an increase in a nation’s capital stock?

• Aggregate production will increase, and income per capita will decrease.
• Aggregate production will increase, and income per capita will increase.
• Aggregate production will decrease, and income per capita will be indeterminate.
• Aggregate production will decrease, and income per capita will increase.

An increase in net investment leads to faster economic growth because capital per worker and output per worker will change in which of the following ways?

• Capital per worker increases and Output per worker increases
• Capital per worker increases and Output per worker decreases
• Capital per worker doesn't change and Output per worker increases
• Capital per worker decreases and Output per worker increases
• Capital per worker decreases and Output per worker decreases