Week 4 Quiz

On the illustrative Week 1 labor-hours frontier, 3x + 6y = 24, the point (6, 3) needs 36 million hours and only 24 million exist. Which change shows long-run economic growth?

Select one.

• The whole frontier shifts outward, so a point that was out of reach becomes attainable
• The economy moves from the inside point (2, 2) to (4, 2) on the frontier
• The economy moves along the frontier from (8, 0) to (4, 2)
• The economy chooses (2, 2) and leaves 6 million hours idle

On the illustrative Week 1 labor-hours frontier, an economy that moves from the inside point (2, 2) to the frontier point (4, 2) has achieved long-run economic growth.

True or false.

• True
• False

In the illustrative growth economy, real GDP rises from 800 billion dollars last year to 840 billion dollars this year. What is the growth rate?

Select one.

• About 4.76%
• 5%
• 40%
• 105%

Using the rule of 70, about how many years does an economy growing 7% a year take to double its real output?

Select one.

• About 490 years
• About 7 years
• About 10 years
• About 35 years

Using the rule of 70, which steady growth rate doubles a quantity in about 14 years?

Select one.

• 2% a year
• 5% a year
• 7% a year
• 10% a year

The rule of 70 gives exact doubling times, so 100 billion dollars growing 7% a year becomes exactly 200 billion dollars after ten years.

True or false.

• True
• False

In an illustrative economy, real GDP of 100 billion dollars grows 7% a year for ten years. About how large is real GDP at the end?

Select one.

• About 121.90 billion dollars
• About 170 billion dollars
• About 196.72 billion dollars
• About 700 billion dollars

An illustrative city's real output grows 3% in a year while its population grows 1%. About how fast is output per person growing?

Select one.

• About 4%
• About 3%
• About 1%
• About 2%

At an illustrative print shop, 5 workers print 1,250 posters a day after the shop buys a faster press. What is the shop's productivity?

Select one.

• 1,250 posters a day
• 200 posters per worker a day
• 6,250 posters per worker a day
• 250 posters per worker a day

Select every change that is one of the three sources of growth in productivity.

Select every option that applies.

• Human capital, such as a training course that raises each worker's skills
• A rise in nominal GDP that comes only from higher prices
• Physical capital, such as a faster machine for each worker
• Hiring more workers who each produce the same amount as before
• Technology, such as a better way of scheduling the work