Question : 21) If a country transfers resources from the production of : 1384428

21) If a country transfers resources from the production of consumption goods to the production of capital goods, the result will be to

A) raise future consumption.

B) raise current living standards.

C) decrease the long-run growth rate.

D) lower future living standards.

E) raise current consumption.

22) One of the benefits of long-run economic growth is

A) growth in nominal GDP greater than real GDP.

B) decreased productive capacity.

C) a greater ability to reduce inequality.

D) increased future interest rates.

E) decreased current saving and increased current consumption.

23) The costs of long-run economic growth include:

1) declining future average living standards;

2) that current consumption must be sacrificed to increase investment in capital goods;

3) current increases in investment may only generate greater consumption in the distant future.

A) 1 and 2

B) 2 and 3

C) 1 only

D) 2 only

E) 3 only

24) For a given level of technology, a more rapid rate of economic growth can probably be achieved only if a country’s citizens are prepared to

A) redistribute income.

B) sacrifice some present consumption.

C) increase their demand for goods and services.

D) increase exports.

E) decrease interest rates.

25) The costs of economic growth include

A) declining future living standards.

B) current saving must be sacrificed to increase investment in capital goods.

C) improvements in technology.

D) the effects on workers whose skills are made obsolete by technical change.

E) reduced interest rates.

26) Long-run economic growth can help alleviate the problems of poverty by

A) creating new low-paying jobs for the unemployed.

B) generating more resources that can be used to reduce income inequality.

C) reallocating income away from low-value production to increase the incentives for high-value production.

D) requiring increased saving on the part of most of the population.

E) increasing future consumption for the middle class.

27) Long-term economic growth

A) is achieved only by changes in factor-utilization rates.

B) alleviates all poverty.

C) can improve average material living standards.

D) is the result of expansionary fiscal policy.

E) leads to equal income distribution.

28) Consuming fewer goods today in order to invest resources in capital goods can be considered the ________ of economic growth.

A) opportunity cost

B) social cost

C) investment cost

D) external cost

E) total cost

29) Alleviation of poverty is more achievable in a growing economy mainly because

A) individuals are more likely to object to the redistribution of income when they earn more.

B) everyone, including the poor, benefits equally from growth.

C) poor individuals are relatively easier to be identified in a growing economy.

D) nobody has to be made worse off when the increment to income caused by growth is redistributed.

E) wage rates for low-income people are naturally rising.

30) An important social cost of economic growth is

A) the increasing inequality of income that usually accompanies sustained growth.

B) the sacrifice of current consumption required for a higher level of future consumption.

C) the associated inflation.

D) the associated frictional unemployment.

E) the destruction of jobs due to labour skills of certain workers becoming obsolete.