Match the term on the left with its correct label in the drop down menu. (econom
ID: 1146185 • Letter: M
Question
Match the term on the left with its correct label in the drop down menu. (economonic growth or Labor Productivity)
1. Measured as the % change ________in real GDP per person from one period to the next
Measured as the % change__________ in real GDP per worker from one period to the next
2. An economy’s rate of productivity growth is closely linked to the growth rate of its ______________, although the two aren’t identical.
A. GNP
B. technology
C. Real GDP per capita
D. output
3. The main factor(s) that contribute(s) to labor productivity is(are):
A. physical capital
B. human and physical capital
C. human capital, technology, physical capital
D. technology
4. A country's real GDP per capita in 2012 is $3.5 trillion dollars. What will it's real GDP per capita be in 20 years if the annual real GDP per capita growth rate is 3%?
A. $6.32 trillion
B. $116.67 trillion
C. $7.03 trillion
D. $4.6 trillion
5. Investment in human capital:
A. is characterized by both b) and c). .
B. is an important source of economic growth.
C. is of minor importance to economic growth.
D. can be acquired through on-the-job training
6.Which of the following is most likely to contribute to economic growth as measured by GDP per capita?
A. increased capital formation
B. rapid population growth
C. the imposition of tariffs and quotas on imported goods
D. an increase in marginal tax rates
Explanation / Answer
1. Economic growth is measured as a percentage change in the real GDP per person. This is because it is assumed to be a good measure of standards of living. While Labor productivity measures the percentage change in real GDP per worker because the productivity is increased by marginal product of laboe
2. The productivity growth is closely linked to the growth rate of its GDP per capita although the two aren’t identical. This is because one is affected by workers only while the other is affected by the entire population. Option C is correct.
3. The main factor(s) that contribute(s) to labor productivity are human capital, technology, physical capital Option C is correct. These factors are called factors of production and all of them are equally important.
4. A country's real GDP per capita in 2012 is $3.5 trillion dollars. The real GDP per capita in 20 years will be 3.5 T x (1 + 3%)^20 = 6,32 trillion. Option A is correct.
5. Investment in human capital is an important source of economic growth. Hence option B is correct.
6. Increased capital formation is most likely to contribute to economic growth as measured by GDP per capita. Option A is correct.