01
Choose one
1 point
An economy's real output is growing at approximately 2% per year. According to the rule of 70, about how long will it take for real output to double?
Free Practice Quiz Question List
Long-Run Economic Growth: Concepts, Calculations, and Policy Online Quiz Questions
Use this free practice quiz with 20 questions to review Long-Run Economic Growth: Concepts, Calculations, and Policy, test your knowledge, and prepare for your next test or exam.
20 questions
02
True or false
1 point
True or false: A country can experience economic growth without achieving the same degree of economic development.
- A
True
- B
False
03
Written response
1 point
A factory produces 1,200 units using 500 labor hours. What is its labor productivity, measured in units per hour?
04
Fill in the blank
1 point
An economy adopts technology that raises productivity across many industries. This increase in productive capacity causes a of the LRAS curve.
05
Choose one
1 point
According to the standard Solow growth model, what is the most accurate effect of a permanently higher saving rate?
- A
It permanently raises the growth rate of output per worker without limit
- B
It lowers the steady-state level of output per worker
- C
It raises the steady-state level of output per worker but does not by itself sustain permanent growth in output per worker
- D
It has no effect on output per worker because saving only affects consumption
06
Choose all
1 point
Which changes can directly contribute to productivity growth? Select all correct choices.
- A
Improved production methods
- B
More efficient management
- C
A permanent increase in current consumption with no change in productive capacity
- D
Improved infrastructure and communication
07
True or false
1 point
True or false: A recession necessarily reduces an economy's long-run growth rate.
- A
True
- B
False
08
Written response
1 point
What is the full term for the measure of how efficiently an economy combines multiple inputs such as labor and capital to produce output?
09
Fill in the blank
1 point
The change in an economy's physical capital stock equals .
10
Choose one
1 point
An economy has 3% output growth, 4% capital growth, 1% labor growth, and a capital share of 0.4. Using growth accounting, what is the approximate TFP contribution to output growth?
- A
0.2 percentage points
- B
0.6 percentage points
- C
1.2 percentage points
- D
0.8 percentage points
11
Choose all
1 point
Which institutional features are generally likely to encourage productive investment and innovation? Select all correct choices.
- A
Secure property rights
- B
Enforceable contracts
- C
Protection from arbitrary expropriation being removed
- D
A reliable legal system
12
Open ended
1 point
Explain why a higher saving rate can raise an economy's long-run level of output per worker without, by itself, creating permanent growth in output per worker. Contrast this result with the role of continuing technological progress.
13
Choose one
1 point
Why can pollution generated during economic expansion justify policies such as emissions standards, pollution taxes, or tradable permits?
- A
It is a positive externality because pollution benefits nearby firms
- B
It is a negative externality because pollution imposes costs not fully reflected in market prices
- C
It is not an externality because all environmental costs are automatically included in prices
- D
It is a public good because every firm can sell pollution permits
14
Choose one
1 point
Which statement best distinguishes long-run economic growth from economic development?
- A
Economic growth is only a short-run increase in aggregate demand.
- B
Economic development includes improvements beyond increased productive capacity.
- C
Economic growth and economic development are exactly identical concepts.
- D
Economic development refers only to increases in the capital stock.
15
Choose one
1 point
Which change would most directly shift an economy’s long-run aggregate supply curve to the right?
- A
A fall in consumer confidence lowers potential output immediately.
- B
A temporary increase in government purchases shifts LRAS left.
- C
An increase in productivity shifts LRAS to the right.
- D
A recession always permanently lowers the economy’s growth rate.
16
Choose one
1 point
According to the simplified production function y = A k^α, where 0 < α < 1, what is the most likely effect of increasing capital per worker while productivity is unchanged?
- A
Output per worker rises, but the additional gains from further capital deepening tend to diminish.
- B
Output per worker is unchanged because only total capital matters.
- C
Output per worker falls because capital substitutes completely for labor.
- D
Output per worker rises at an increasingly larger rate with every additional unit of capital.
17
Choose one
1 point
A factory increases its output from 1,000 to 1,200 units while keeping labor time at 500 hours. Which conclusion about labor productivity is correct?
- A
It falls because software is a form of capital rather than labor.
- B
It is unchanged because the number of hours is unchanged.
- C
It rises by 10% because output rises by 200 units.
- D
It rises from 2 to 2.4 units per hour, a 20% increase.
18
True or false
1 point
True or false: In the standard Solow growth model, a permanently higher saving rate by itself can sustain a permanently higher growth rate of output per worker.
- A
True
- B
False
19
Written response
1 point
An economy’s real output grows at approximately 2% per year. Using the rule of 70, what is its approximate doubling time in years?
20
Written response
1 point
An economy has 3% output growth, 4% capital growth, 1% labor growth, and a capital share of 0.4. Assuming the labor share is 0.6, what is the residual TFP contribution in percentage points?