Title: Explore economic growth
Course: TEST Course

Q: Which of the following is the alternating periods of expansion and contraction in real GDP?
- depressions
- economic crises
- business cycles
A: business cycles

Q: Fluctuations in real GDP are called ________.
- depressions
- recessions
- business cycles
A: business cycles

Q: Concerning the four phases in the economic cycle, the area by point A in this graph represents an economic ________.
- trough
- recession
- expansion
A: expansion

Q: Concerning the four phases in the economic cycle, what is show by point B?
- trough
- recession
- peak
A: peak

Q: Concerning the four phases in the economic cycle, what is shown by point C?
- peak
- expansion
- recession
A: recession

Q: Concerning the four phases in the economic cycle above, what does point D depict?
- expansion
- recession
- trough
A: trough

Q: An economy is considered to be in a recession if:
- real GDP has increased for two consecutive quarters.
- it is moving from the trough to the peak of the business cycle.
- it is moving from the peak toward the trough of the business cycle.
A: it is moving from the peak toward the trough of the business cycle.

Q: An economy is considered to be in an expansion if:
- it is moving from the peak toward the trough of the business cycle.
- real GDP has increased for two consecutive quarters.
- it is moving from the trough to the peak of the business cycle.
A: it is moving from the trough to the peak of the business cycle.

Q: The point of a fluctuation at which an economy turns from a recession to an expansion is called a ________.
- depression
- disinflation
- trough
A: trough

Q: The point at which an economy transitions from an expansion to a recession is called a/an ________.
- trough
- expansion
- peak
A: peak

Q: The point of a fluctuation at which economy turns from a peak to a trough is called a/an ________.
- peak
- expansion
- recession
A: recession

Q: The point of a fluctuation at which economy turns from a trough to a peak is called a/an ________.
- recession
- peak
- expansion
A: expansion

Q: Your friend asked you what a business cycle means. You tell them that a business cycle reflects changes in real GDP. Then you tell them that the stages of a business cycle in correct order are:
- trough, expansion, recession, peak
- expansion, trough, recession, peak
- expansion, peak, recession, trough
A: expansion, peak, recession, trough

Q: A business cycle reflects changes in real GDP. The stages of a business cycle in correct order are:
- trough, expansion, recession, peak.
- expansion, trough, recession, peak.
- expansion, peak, recession, trough.
A: expansion, peak, recession, trough.

Q: Which of the following best describes a business cycle?
- The cyclical movement in interest rates.
- Regular fluctuations of prices.
- Periods of increasing and decreasing real GDP.
A: Periods of increasing and decreasing real GDP.

Q: Which of the following is true?
- The timing of business fluctuations is regular and therefore easily predictable.
- During the contractionary phase of the business cycle, the rate of unemployment is generally quite low.
- The expansions and contractions of real world business cycles last varying lengths of time and often differ in magnitude.
A: The expansions and contractions of real world business cycles last varying lengths of time and often differ in magnitude.

Q: The country of Bolivia had a Gross Domestic Product of $79 billion in 2016 and a population of 11 million people, the GDP per capita would be ________.
- $7.2
- about $14,000
- $7,182
A: $7,182

Q: The country of Russia had a Gross Domestic Product of about $4 trillion in 2016 and a population of 142 million people, the GDP per capita would be ________.
- $2,800
- $35,500
- $28,000
A: $28,000

Q: If the country of Zooland has a Gross Domestic Product per capita of $45,000 in 2017 and its GDP grows by 2% in 2018 while its population grows by 3%, the GDP per capita in 2018 would be
- higher than the GDP per capita in 2017.
- there is not enough information to compare the two GDPs per capita.
- lower than the GDP per capita in 2017.
A: lower than the GDP per capita in 2017.

Q: The country of Andorrata’s Gross Domestic Product in 2016 was $31,000 per capita. The GDP grew by 4% in 2017 while the population grew by 2%. What would the per capita GDP in 2017 be?
- The GDP per capita in 2017 would be lower.
- There is not enough information to compare the two GDPs per capita.
- The GDP per capita in 2017 would be higher.
A: The GDP per capita in 2017 would be higher.

Q: If a country’s Gross Domestic Product increases faster than its population, its GDP per capita would
- fall.
- not change significantly.
- rise.
A: rise.

Q: If a country’s Gross Domestic Product increased slower than its population increase, the country’s GDP per capita would
- rise.
- not change significantly.
- fall.
A: fall.

Q: Use the data from the following table to calculate the GDP per capita of each country. The GDP per capita for Estonido and for Galicia in 2017 is

Country | Year | GDP (billions in U.S. $) | Population (millions)
Estonido | 2017 | 525.50 | 73
Galicia |  | 1,658.00 | 118.25
Estonido | 2018 | 721.75 | 78
Galicia |  | 1,724.30 | 121.8
- $9,253 for Estonido and $14,157 for Galicia in 2017.
- $720 for Estonido and $1,402 for Galicia in 2017.
- $7,199 for Estonido and $14,021 for Galicia in 2017.
A: $7,199 for Estonido and $14,021 for Galicia in 2017.

Q: Use the data from the following table to calculate the GDP per capita of each country. The GDP per capita for Estonido and for Galicia in 2018 is

Country | Year | GDP (billions in U.S. $) | Population (millions)
Estonido | 2017 | 525.50 | 73
Galicia |  | 1,658.00 | 118.25
Estonido | 2018 | 721.75 | 78
Galicia |  | 1,724.30 | 121.8
- $7,199 for Estonido and $14,021 for Galicia in 2017.
- $925 for Estonido and $1,412 for Galicia in 2017.
- $9,253 for Estonido and $14,157 for Galicia in 2017.
A: $9,253 for Estonido and $14,157 for Galicia in 2017.

Q: If Ali grows hot peppers in his garden for his own consumption, the value of his production will
- be included in Gross Domestic Product and give an accurate account of the value of the production in his country.
- not be included in Gross Domestic Product and give an accurate account of the value of the production in his country.
- not be included in Gross Domestic Product and understate the value of the production in his country.
A: not be included in Gross Domestic Product and understate the value of the production in his country.

Q: Inequalities in the distribution of income are
- reflected in the Gross Domestic Product and improve GDP as a measurement of standard of living.
- not reflected in the Gross Domestic Product and improve GDP as a measurement of standard of living.
- not reflected in the Gross Domestic Product and diminish GDP as a measurement of standard of living.
A: not reflected in the Gross Domestic Product and diminish GDP as a measurement of standard of living.

Q: Gross Domestic Product is a/an ________ measurement of standard of living because ________.
- perfect; all important determinants of standard of living are incorporated
- imperfect; all important determinants of standard of living are incorporated
- perfect; not all important determinants of standard of living are incorporate
- imperfect; not all important determinants of standard of living are incorporated
A: imperfect; not all important determinants of standard of living are incorporated

Q: Gross Domestic Product is a/an ________ measurement of standard of living because ________.
- perfect; all important determinants of standard of living are incorporated
- imperfect; all important determinants of standard of living are incorporated
- perfect; not all important determinants of standard of living are incorporated
- imperfect; not all important determinants of standard of living are incorporated
A: imperfect; not all important determinants of standard of living are incorporated

Q: Which of the following factors important in determining our standard of living are not reflected in the Gross Domestic Product?
- The value of our imports, the improvements in product quality.
- The value of our imports and exports, the value of leisure.
- The value of leisure, the quality of our environment, improvements in products quality.
A: The value of leisure, the quality of our environment, improvements in products quality.

Q: What factors are left out of the Gross Domestic Product calculation but are still necessary in determining and reflecting our standard of living?
- The value of our imports, the improvements in product quality.
- The value of our imports and exports, the value of leisure.
- The value of leisure, the quality of our environment, improvements in products quality.
A: The value of leisure, the quality of our environment, improvements in products quality.

Q: Sarah lives in Montana and works remotely with a company in Portland. She lives in Montana because of the fresh air, clean water and wide open spaces to go hiking on her time after work. Is Sarah’s environmental quality reflected in factoring the Gross Domestic Product and why or why not?
- The quality of Sarah’s environment is included in GDP because it improves her standard of living.
- Sarah’s clean natural environment is left out of the GDP because it distracts Sarah from being productive with her work.
- Sarah’s environmental quality is left out of GDP because GDP focuses on productivity rather than Sarah’s well being or standard of living.
A: Sarah’s environmental quality is left out of GDP because GDP focuses on productivity rather than Sarah’s well being or standard of living.

Q: Gustavo lives in New York City and gets to work on a 10 minute subway ride. He lives in NYC because of the variety of events, restaurants, museums, education and people to experience on a daily basis. Is Gustavo’s NYC standard of living reflected in factoring the Gross Domestic Product and why or why not?
- The quality of Gustavo’s environment is included in GDP because it improves his standard of living.
- The value of our imports, the improvements in product quality.
- Gustavo’s dynamic social environment is left out of the GDP because it distracts Gustavo from being productive with his work.
- Gustavo’s environmental quality is left out of GDP because GDP focuses on productivity rather than Gustavo’s well being or standard of living.
A: Gustavo’s environmental quality is left out of GDP because GDP focuses on productivity rather than Gustavo’s well being or standard of living.

Q: Which of these statements describes an economy’s stock of human capital?
- Number of hours worked per year.
- Productivity per worker.
- Number of engineering degrees held by workers.
A: Number of engineering degrees held by workers.

Q: Which of the following is an example of human capital in regards to the economy?
- The total number of hours Stephen worked this year.
- How productive Dyana has worked this year.
- The medical license and degree that Sharon obtained for her nursing profession.
A: The medical license and degree that Sharon obtained for her nursing profession.

Q: ________ is the value of output per hour of labor input.
- Human capital
- GDP per capita
- Labor productivity
A: Labor productivity

Q: Labor productivity is
- the value of the production or output per worker.
- the production or output per hour.
- the production or output per worker per hour.
A: the production or output per worker per hour.

Q: Investment in human capital
- is of minor importance to economic growth.
- cannot be acquired through on-the-job training.
- is an important source of labor productivity.
A: is an important source of labor productivity.

Q: Which of the following is an important source of labor productivity?
- The market demand for products.
- Low interest on business loans.
- Human capital
A: Human capital

Q: Which of the following is unlikely to affect labor productivity?
- The quality and quantity of available capital resources.
- Technological change.
- The frequency of business cycles.
A: The frequency of business cycles.

Q: Of the following examples, which one has little or no effect on labor productivity?
- The quality and quantity of available capital resources.
- Technological change.
- The frequency of business cycles.
A: The frequency of business cycles.

Q: Which is a factor that drives economic growth?
- Improved investment opportunities.
- Decreased unemployment.
- Increased human capital.
A: Increased human capital.

Q: Which factor drives economic growth?
- Increased government spending.
- Decreased unemployment.
- Improved technology.
A: Improved technology.

Q: Which factors contribute to economic growth?
- A decrease in the quantity of labor due to emigration.
- A decline in the stock of physical capital.
- An increase in university graduates.
A: An increase in university graduates.

Q: Which of the following factors contribute to economic growth?
- A decrease in the quantity of labor due to emigration.
- A decline in the stock of physical capital.
- The discovery of a new technology.
A: The discovery of a new technology.

Q: Which factors would increase the aggregate production function?
- Aging airport facilities that cause flight delays.
- Significant increase in hourly wages for manufacturing workers.
- A robot that fills up prescriptions faster and more accurately than pharmacists.
A: A robot that fills up prescriptions faster and more accurately than pharmacists.

Q: An increase in education and training for the workforce would
- have no impact on the aggregate production function.
- increase Gross Domestic Product but not the aggregate production function.
- increase the aggregate production function.
A: increase the aggregate production function.

Q: A nation achieves economic growth when its:
- sum of goods and services produced exceeds the level of neighboring countries.
- real GDP has reached a peak in the business cycle.
- production possibilities frontier shifts outward.
A: production possibilities frontier shifts outward.

Q: How would you interpret a graph of a nation when its production possibilities frontier shifts outward?
- The sum of goods and services produced exceeds the level of neighboring countries.
- The country’s real GDP has reached a peak in the business cycle.
- The country is achieving economic growth.
A: The country is achieving economic growth.

Q: When discussing economic growth, it is often useful to focus on ________, to avoid studying changes in the size of GDP that represent only having more people in the economy, and focus on those increases in GDP which represent an actual rise in income of the average person.
- economic growth
- consumption and expenditures
- GDP per capita
A: GDP per capita

Q: Economists typically measure economic growth by tracking
- the employment rate.
- the unemployment rate.
- real GDP per capita.
A: real GDP per capita.

Q: Which of the following is most likely to contribute to economic growth as measured by GDP per capita?
- business cycle peaks
- rapid population growth
- increased stock of physical capital
A: increased stock of physical capital

Q: A nation might achieve higher economic growth if it:
- limits immigration.
- taxes investment in capital.
- devotes more resources to technology research and development.
A: devotes more resources to technology research and development.

Q: Which of the following is unlikely to result in economic growth?
- Installing a network of irrigation ditches and pumping stations in order to grow fruits and vegetables in parts of southern California.
- The invention of a threshing machine for harvesting grains.
- An increase in consumption and decline in savings.
A: An increase in consumption and decline in savings.

Q: Which of the following factors contribute to economic growth?
- An increase in the standard of living.
- A decrease in the productivity of labor.
- An increase in population.
A: An increase in population.

Q: The most important determinant of the average wage level in the economy is ________.
- the number of hours worked
- total quantity of output
- the value of output per hour worked
A: the value of output per hour worked

Q: If you are focusing on the value of output per hour worked you are considering
- the value needed to compute the position in a business cycle.
- The value of output per hour of government workers.
- the most important determinant of the average wage level in the economy.
A: the most important determinant of the average wage level in the economy.

Q: Generally, the average wage is
- negatively correlated to labor productivity.
- positively correlated to the value of output or production.
- positively correlated to labor productivity.
A: positively correlated to labor productivity.

Q: When labor productivity increases over time, generally
- it is due to increases in the number of workers.
- it results in higher prices for goods and services.
- so do average wages.
A: so do average wages.

Q: If the total number of hours worked per year increases, then automatically
- the value of the production per hour worked will also increase.
- the production or output per worker will also increase.
- the value of the production will increase.
A: the value of the production will increase.

Q: For productivity to increase
- the total production or output has to increase.
- the total number of hours worked has to increase.
- the value of the production per hour worked has to increase.
A: the value of the production per hour worked has to increase.

Q: The country of Wakanda for 2018 has a GDP of $555 billion, with a total of 2 million workers, each of which averages 1400 work hours a year. What is the value of the output per worker per hour of work?
- $1980
- $792
- $198
A: $198

Q: The country of Wakanda in 2017 had a GDP of $500 billion, with a total of 1.75 million workers, each of which averages 1600 work hours a year. What is the value of the output per worker per hour of work?
- $1790
- $716
- $179
A: $179

Q: Which of the following would NOT result in capital deepening?
- Increase in quantity and quality of physical capital.
- Increase in quantity and quality of human capital.
- Increase in amount of money available to businesses start ups.
A: Increase in amount of money available to businesses start ups.

Q: If a government wanted to raise capital deepening it should
- lower taxes and regulations.
- encourage entrepreneurship.
- invest in education and research.
A: invest in education and research.

Q: If workers have devices with better technologies available to them,
- it should increase profit for businesses.
- it should increase cost for businesses.
- it would increase capital deepening.
A: it would increase capital deepening.

Q: The Helper Company’s customer service representatives received new computers and training on how to utilize them best. In regards to measuring productivity, these new computers and updated technology knowledge have
- increased profit for the Helper company.
- increased costs for the Helper company.
- increased capital deepening for the Helper company.
A: increased capital deepening for the Helper company.

Q: In general, capital deepening results in
- inflation.
- higher financing options for businesses.
- greater economic growth.
A: greater economic growth.

Q: Capital deepening generally
- results in inflation.
- results in higher financing options for businesses.
- results in greater economic growth.
A: results in greater economic growth.

Q: Cree industrial lighting company is looking to deepen its capital. Which one of these steps should the Cree company take to accomplish this?
- Refinance their business loans and decrease their carried debt amount.
- Restructure and reorganize its departments to shorten production time.
- Invest in additional education and advanced training programs for their employees.
A: Invest in additional education and advanced training programs for their employees.

Q: The current competitive economy has caused the Doggie Dog Food company to brainstorm in their latest meeting on how to become more productive and efficient. Larry the VP of operations suggests that they deepen the company’s capital. Which of the follow steps should the Doggie Dog Food company take to deepen its capital?
- Refinance their business loans and increase their financial capital.
- Invest in developing three new flavors for their dog food.
- Invest in additional training for their dog food scientist and nutritionist updating with the latest dog food and health knowledge.
A: Invest in additional training for their dog food scientist and nutritionist updating with the latest dog food and health knowledge.

Q: To achieve economic growth, a nation should
- use less capital and more labor in the production process.
- increase unemployment benefits.
- promote research and technological innovation.
A: promote research and technological innovation.

Q: According to growth accounting studies, the most important factor in economic growth is
- education.
- Investment in physical capital.
- technology.
A: technology.

Q: According to growth accounting studies, a country would achieve better results by promoting
- research.
- education.
- research and education.
A: research and education.

Q: According to growth accounting studies, a country would achieve better results by promoting
- private higher education.
- limitations on immigration.
- government funded research projects.
A: government funded research projects.

Q: You are explaining the growth accounting studies to your best friend. You tell them that the best way to achieve greater technological progress for a country is for it to
- continue to pursue traditional ways of working.
- have the central bank inject more money into the economy.
- invest in education and research.
A: invest in education and research.

Q: According to growth accounting studies, investing in research and education
- does not achieve as much growth as technology improvement would.
- is less effective than on the job training.
- is the best way to achieve greater technological progress.
A: is the best way to achieve greater technological progress.

Q: According to the growth accounting studies, if you lived in a country where illiteracy was high and 40% of the children left school early and did not complete their education what would probably the results for that country?
- The economic status of the country would continue to rise.
- More technological breakthroughs would happen in this country.
- There would be both a human and economic loss.
A: There would be both a human and economic loss.

Q: If you lived in a country where literacy was high and 90% of the children completed their education with a high percentage going on to a higher education, what would probably be the results for the country?
- The economic status of the country would continue to fall.
- There would be both a human and economic loss.
- More technological breakthroughs would happen in this country.
A: More technological breakthroughs would happen in this country.

Q: Country A’s real GDP is growing at a rate of 2 percent per year. Using the rule of 72, it will take country A ________ to double its GDP.
- 18 years
- 2 years
- 36 years
A: 36 years

Q: If a country doubles its Gross Domestic Product in 8 years, its average growth rate would have been
- 11%.
- 5.8%.
- 9%.
A: 9%.

Q: Sustained economic growth
- can be achieved with growth rate over 8% to rapidly boost an economy.
- has not been achieved by most countries in the 20th century.
- is key because over a long period of time small yearly growth rate compound.
A: is key because over a long period of time small yearly growth rate compound.

Q: Because of the compounding effect,
- large yearly growth rates are needed to achieve sustained growth.
- interest compounding allow the economy to grow faster.
- small changes in economic growth rate lead to large GDP changes over time.
A: small changes in economic growth rate lead to large GDP changes over time.

Q: Compound growth in an economy can increase people’s standard of living for country Z. If the economy for country Z starts with a GDP of 150 and a growth rate of 2% per year, what will its GDP be after 15 years?
- 360
- 195
- 202
A: 202

Q: The standard of living for country Y is affected by compounded growth. If the economy for country Y starts with a GDP of 200 and a growth rate of 4% per year, what will its GDP be in 20 years?
- 202
- 360
- 438
A: 438

Q: The country of Wachovia has an economy that will double in 144 years. From what you’ve learned of the power of compound growth what does this mean for Wachovia?
- Wachovia has a thriving and rapidly growing economy growing over 1% per year.
- Wachovia has a somewhat stalled economic growth of over 1% per year.
- Wachovia has a slow growing economy at a growth rate of .5% per year.
A: Wachovia has a slow growing economy at a growth rate of .5% per year.

Q: The country of Wakanda has an economy that will double in 10 years. According to what you’ve learned about compound growth, what type of economy does Wakanda have?
- Wakanda has a slow growing economy at a growth rate of 7% per year.
- Wakanda has an economic growth rate of under 5% per year.
- Wakanda has a thriving and rapidly growing economy growing over 7% per year.
A: Wakanda has a thriving and rapidly growing economy growing over 7% per year.