Question : 9.5   Integrative Questions 1) Economic growth in Cuba has been slow. : 1240977

9.5   Integrative Questions

1) Economic growth in Cuba has been slow. What can best explain the slow growth?

A) lack of economic resources

B) lack of incentive mechanisms and economic freedom

C) labor productivity is low.

D) a non-democratic form of government

E) too much competition within the economy

2) The idea of continuous economic growth as a “perpetual motion machine” best reflects the prediction of which growth theory?

A) the classical growth theory

B) the traditional growth theory

C) the Keynesian growth theory

D) the new growth theory

E) no growth theory

3) Workers in the United States are ________ workers in China because ________.

A) more productive than; workers in the United States have more capital per worker.

B) more productive than; there are more college-educated workers in the United States.

C) less productive than; there are fewer workers in the United States.

D) less productive than; the labor force participation rate is lower in the United States.

E) equally as productive as; China’s real GDP per person equals the U.S. real GDP per person.

4) The presence of government corruption in some countries

A) slows their economic growth.

B) speeds their economic growth.

C) invalidates the new growth theory’s predictions.

D) supports the classical growth theory’s predictions.

E) invalidates the neoclassical growth theory’s predictions.

5) Which of the following policies encourages economic growth?

A) increased taxes on income and business profits

B) reduction of government support of higher education

C) high tariffs and strict import quotas on foreign-made products

D) creation of tax free savings accounts

E) limiting the years people spend in education so that they can start productive work

9.6   Essay: The Basics of Economic Growth

1) Why is growth in GDP different from growth in a nation’s standard of living? Is it possible for a nation’s GDP to grow while its standard of living falls?

2) How do we calculate growth in a nation’s standard of living?

3) What is the Rule of 70?

4) A nation’s population was 250 million last year and is 255 million this year. If its real GDP was $8.5 trillion last year and is $8.8 trillion this year, what is its growth rate of real GDP per person?

5) U.S. real GDP per person grew rapidly in the early 1960s. The table above has U.S. real GDP and population for 1961 and 1962.

a.What was U.S. real GDP per person in 1961?

b.What was U.S. real GDP per person in 1962?

c.Between 1961 and 1962, how rapidly did U.S. real GDP per person grow?

6) If a nation’s population grows at 2 percent and its real GDP grows at 4 percent, what is the growth rate of real GDP per person?

7) Suppose that real GDP grows at 3 percent per year. What is the growth rate of real GDP per person if the population grows at:

a.2 percent? What happens to the standard of living?

b.3 percent? What happens to the standard of living?

c.4 percent? What happens to the standard of living?

8) During 2005, real GDP in Ireland grew 9.8 percent. If Ireland maintains this level of growth in the future, real GDP will double in approximately how many years?

9) Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year. How many years will it take for real GDP and real GDP per person to double?