Foundations of Economics, Student Value Edition Plus MyLab Economics with eText -- Access Card Package (8th Edition)
8th Edition
ISBN: 9780134641843
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 25, Problem 4MCQ
To determine
To find:
The option that correctly explains the effect of an increase in capital per hour of labor due to the increase in real
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In the long run, capital deepening,
a. doesn't change the level of productivity or income.
b. raises the levels of both productivity and income.
c. Raises the level of productivity but not the level of income.
d. raises the level of Income but not the level of productivity
A country has the following data on the average growth rates of its real GDP, population and capital accumulation over several decade: Real GDP growth rate=4.5%; Population growth rate=2%; Capital stock growth rate=4%. If the labor share to output=0.75 and capital share=0.25, how much is the contribution of improvement in total factor productivity (A) in the growth of real GDP?
Assume that you know that there are only two factors, capital and labour, and that aggregate capital income = $1.25 billion aggregate labour income = $4 billion capital stock growth rate = 1.2 percent employment growth rate = 2.8 percent output growth rate = 3.7 percent. then the average annual rate of aggregate technological progress is (1) 9.00 percent. (2) -0.30 percent. (3) 7.70 percent. (4) 1.28 percent
Chapter 25 Solutions
Foundations of Economics, Student Value Edition Plus MyLab Economics with eText -- Access Card Package (8th Edition)
Ch. 25 - Prob. 1SPPACh. 25 - Prob. 2SPPACh. 25 - Prob. 3SPPACh. 25 - Prob. 4SPPACh. 25 - Prob. 5SPPACh. 25 - Prob. 6SPPACh. 25 - Prob. 7SPPACh. 25 - Prob. 8SPPACh. 25 - Prob. 9SPPACh. 25 - Prob. 10SPPA
Ch. 25 - Prob. 11SPPACh. 25 - Prob. 12SPPACh. 25 - Prob. 1IAPACh. 25 - Prob. 2IAPACh. 25 - Prob. 3IAPACh. 25 - Prob. 4IAPACh. 25 - Prob. 5IAPACh. 25 - Prob. 6IAPACh. 25 - Prob. 7IAPACh. 25 - Prob. 8IAPACh. 25 - Prob. 9IAPACh. 25 - Prob. 10IAPACh. 25 - Prob. 1MCQCh. 25 - Prob. 2MCQCh. 25 - Prob. 3MCQCh. 25 - Prob. 4MCQCh. 25 - Prob. 5MCQCh. 25 - Prob. 6MCQCh. 25 - Prob. 7MCQCh. 25 - Prob. 8MCQ
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- Would the following events usually lead to capital deepening? Why or why not? A weak economy in which businesses become reluctant to make long-term investments in physical capital. A rise in international trade. A trend in which many more adults participate in continuing education courses through their employers and at colleges and universities.arrow_forwardWhat are the advantages of backwardness for economic growth?arrow_forwardWhy does an increase in the labor force cause the Market Productivity of Capital to increase?arrow_forward
- 1 A nation can achieve higher economic growth if Select one: a. the government increases the taxes on investment capital. b. it devotes more resources to research and development. c. it focuses its resources on consumption goods.arrow_forward1. Japan’s real GDP was 525 trillion yen in 2009 and 535 trillion yen in 2010. Japan’s population was 127.6 million in 2009 and 127.5 million in 2010. Calculate a. The economic growth rate. b. The growth rate of real GDP per person. c. The approximate number of years it takes for real GDP per person in Japan to double if the real GDP economic growth rate returns to 3 percent a year and the population growth rate is maintained.arrow_forwardThe capital accumulation theory of economic growth that economies attain growth through saving invested in increasing the capital resources in the economy fails to take account of which of the following factors? a) For capital accumulation to produce economic growth it has to be the right type of capital that can be applied to the production of goods desired by society. b) The capital created has to be efficient. Savings may be squandered by producing capital goods that consume a lot of resources to produce, produce poor quality goods, or are wasteful of other resources. c) For capital to be productive there must be appropriate infrastructure including transportation and communication systems, banking and legal systems, as well as requisite natural resources and often appropriately skilled labor. d) Societies may still squander the wealth created by capital accumulation and in the long-run limit the growth of the economy. e) All of the abovearrow_forward
- Based in info and your answer in question 1 what is capital productivityarrow_forward(a) Identify the factors which are the drivers behind a countries rate of growth. Describe the relevance of each of them in having an effect the growth rate of an economy. (b) Describe the measures that a country can take to improve a countries long term potential growth rate.arrow_forward26. Which of the following is the per capita real GDP growth rate if a country''s real GDP growth rate in a year was 6% and its population grow at 2 percent. a.7% b.4% c.3% d.5%arrow_forward
- Refer to Figure 1. A movement from Point C to Point D represents: an increase in capital stock. economic growth. economic decline. an increase in the labor force.arrow_forward72) According to new growth theory, the accumulation of ________ capital is subject to diminishing returns at the ________ level, but not at the level of the economy as a whole. A) physical; firm B) technological; personal C) knowledge; firm D) physical; production 73) Because knowledge capital is nonexcludable and nonrival, firms have an incentive to ________ the research and development of other firms. A) make bids on B) not use C) ignore D) free ride on 74) When firms benefit from the results of research and development they didn't pay for, we say firms A) are litigious. B) free ride. C) invest in knowledge capital. D) maintain a level playing field. 75) For how long does a patent give a firm the exclusive legal right to a product? A) 10 years B) 17 years C) 20 years D) 50 years 76) A copyright grants the creator of a book, film, or piece of software exclusive legal rights to use the creation for how long? A) 10 years B)…arrow_forwarda)what is average labour productivity? Explain how average labour productivity can impact economic growth measured in terms of RGDP per capita. b) Average labour productivity is presently higher in australia than it is in China yet during the 21st century, CHina has experienced much higher rates of economic growth compared to Australia. Explain possible reasons for this drawing on relevant evidence and examples to support your answers.arrow_forward
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