Question : 11) If real income grows at approximately 4% per year, : 1384427

11) If real income grows at approximately 4% per year, the number of years it will take for real income to double is approximately

A) 5.

B) 12.

C) 18.

D) 36.

E) 72.

12) Of the variables listed below, the best measure of a nation’s average material standard of living is

A) nominal GDP.

B) percent change in nominal GDP.

C) per capita real GDP.

D) per capita nominal GDP.

E) real GDP.

13) The theory of economic growth concentrates on the ________ over the long run, not on ________.

A) growth of investment in capital goods; short-run fluctuations of investment

B) growth of real GDP; growth of potential GDP

C) factor utilization rates; growth of the supplies of factors

D) factor utilization rates; growth of real GDP

E) growth of potential output; fluctuations of output around potential

14) Which of the following is the best example of the acquisition of human capital?

A) A worker takes a training course that increases his/her productivity.

B) A worker receives new machinery enabling him/her to do the amount of work that was formerly done by two workers.

C) A worker communicates more quickly and accurately with suppliers because of upgrades to communications software.

D) A government-sponsored program increases the amount of investment available per worker.

E) A computer chip manufacturer introduces a faster processor for micro-computing.

15) The four major determinants of economic growth include all of the following EXCEPT

A) technological improvement.

B) growth in physical capital.

C) growth in human capital.

D) growth in financial capital.

E) growth in the labour force.

16) Refer to Figure 26-1. Which of the following statements best describes what we know about the difference between the two economies at Year 0?

A) Economy A has a higher level of real GDP at Year 0 than Economy B.

B) Economy B’s households are consuming a larger percentage of GDP than Economy A’s households.

C) There is no opportunity cost for economic growth for Economy B at Year 0.

D) There is no opportunity cost of economic growth for Economy A at Year 0.

E) Economy A’s households are consuming a larger percentage of GDP than Economy B’s households.

17) Refer to Figure 26-1. Which of the following statements about Economies A and B is correct?

A) Economy A will sustain higher material living standards than Economy B in the long run.

B) Economies A and B will have equal material living standards beginning at Year 0.

C) Economy B will sustain higher material living standards than Economy A in the long run.

D) Economies A and B will have equal material living standards beginning at Year X.

E) Economies A and B will have equal material living standards beginning at Year Y.

18) Refer to Figure 26-1. The area marked Area 1 represents

A) the value of consumption from Year 0 to Year X in Economy A.

B) the value of the investment in capital goods undertaken by Economy B.

C) the value of the investment in capital goods undertaken by Economy A.

D) the sacrifice of current consumption by Economy B, as compared to Economy A.

E) the sacrifice of current consumption by Economy A, as compared to Economy B.

19) Refer to Figure 26-1. Suppose Economy A jumps to the path of Economy B at Year 0 by increasing the share of GDP that is saved. In that case, which of the following statements about Economy A is true?

A) Economy A will not be able to regain the losses in consumption it incurs by jumping to the path of Economy B.

B) By Year Y, the increase in consumption made possible by the economy’s higher growth rate equals the consumption sacrificed in earlier years.

C) By Year X, Economy A is better off in terms of material living standards for having jumped to the path of Economy B.

D) By jumping to a new growth path at Year 0, Economy A has increased the share of national income that is consumed.

E) By Year X, Economy A is saving and investing the same share of its national income as it would have been had it stayed on its original path.

20) Refer to Figure 26-1. Which of the following costs of economic growth are reflected in this diagram?

A) the sacrifice of current consumption

B) lower real interest rate

C) environmental degradation

D) resource exhaustion

E) national saving