Economics Today The Macro View Ch. 9 Graded A+
1. Economic growth ✔️: Increases in per capita real GDP measured by its rate of change per year.
2. Labor productivity ✔️: Total real domestic output (real GDP) divided by the number of workers
(output per worker).
3. Economic growth can be defined as the increase in ✔️: per capita real GDP, measured by its rate of
change per year.
4. The ✔️: benefits of economic growth are reductions in illiteracy, poverty, and illness, and increases
in life spans and political stability. The costs ✔️: of economic growth may include environmental
pollution, alienation, and urban congestion.
5. Patent ✔️: A government protection that gives an inventor the exclusive right to make, use, or sell an
invention for a limited period of time (currently, 20 years).
6. Innovation ✔️: Transforming an invention into something that is useful to humans.
,7. Development economics ✔️: The study of factors that contribute to the economic growth of a
country.
8. Per Capita Real GDP Calculation:
- Country A: ✔️ $5,091
- Country B: ✔️ $3,150
- Country C: ✔️ $16,750
9. Consider the following table displaying annual growth rates for nations X, Y, and Z, each of which
entered 2015 with real per capita GDP equal to $20,000.
- a. The nation that most likely experienced a sizable earthquake in late 2015 that destroyed a
significant portion of its stock of capital goods but was followed by speedy investments in rebuilding the
nation's capital stock is ✔️: X.
Calculate this nation's per capita real GDP at the end of 2018: ✔️ $23,153.
- b. The nation that most likely adopted policies in 2015 that encouraged a gradual shift in production
from capital goods to consumption goods is ✔️: Z.
Calculate this nation's per capita real GDP at the end of 2018: ✔️ $22,945.
, c. Y 2018 per capita real GDP is ✔️: $25,472.
10. Formula for 2018:
\[(20,000 \times 1.04) \times 1.05) \times 1.07) \times 1.09)\]
11. Saving is important for economic growth because
A. Without saving, there cannot be investment, and without investment, there will be less economic
growth. ✔️
12. Brazil has a population of about 200 million, with about 145 million over the age of 15. Of these, an
estimated 25 percent, or 35 million people, are functionally illiterate. A. Since the development of
human capital is an important determinant of economic growth, Brazil's literacy and reading rates
suggest its potential economic growth rate is lower. ✔️: A.
13. Norway has a more open economy (lower tariff barriers) than Jamaica. Thus it would be expected
that the average annual per capita growth rate of real GDP would be higher in ✔️: Norway.
Free trade encourages economic growth by ✔️: B. encouraging the more rapid spread of technology.
14. An economy has an overall economic growth rate of 4.6%. Growth in the labor force accounts for
2.1%, growth in physical capital accounts for 1.1%, growth in human capital accounts for 0.6%, and
, growth in the productivity of labor and capital accounts for 0.2%. The increase in growth due to
technology in this economy is ✔️: 0.6% (rounded to one decimal place).
15. Typically, countries in which there are few property rights have ✔️: D. less entrepreneurship, which
leads to less investment, which leads to less economic growth.
16. Which of the following is not a true statement about the impact of immigration on economic
growth?
A. Economists agree that population growth through immigration is a drain on the economy because it
lowers per capita GDP. ✔️
17. Typically, modern developed countries have gone through three stages. Initially, countries have most
of the population involved in ✔️: Agriculture.
Secondly, much of the population moves to ✔️: Industry.
Finally, there is a shift toward ✔️: Services.
18. The two key factors that cause labor productivity to increase over time are:
✔️: B. the quantity of capital per hour worked and the level of technology.
In 2002, real GDP in Economika was $7.8 million. There were 2.5 million workers. Thus average
productivity per worker in Economika was $___. (Round your answer to one decimal place.)
