CLEP Macroeconomics chapter practice4 questions

19 Long-Run Growth, Productivity, and Living Standards

These questions come directly from the chapter practice in the book. Choose the best answer, check your reasoning, and use the explanation to correct any gap.

Question 1

Question 1 of 4

A factory wants a productivity measure that separates output growth from simply adding more labor time. It should calculate

The measure divides real output by labor input, counted either as workers or as hours. A divides by capital instead, D divides by a population that includes children and retirees, B puts a nominal figure in the denominator, and C describes how output is valued rather than what it is divided by.
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E. output per worker or per hour worked

The measure divides real output by labor input, counted either as workers or as hours. A divides by capital instead, D divides by a population that includes children and retirees, B puts a nominal figure in the denominator, and C describes how output is valued rather than what it is divided by.

Question 2

Question 2 of 4

A technician completes an advanced engineering program. What productive asset has that education created?

Human capital is the knowledge, skill, and health carried by workers, and a training program adds to exactly that. A is physical capital and C is a natural resource. B and E are financial claims, which move purchasing power from one holder to another without adding to what anyone can produce.
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D. The technician's engineering knowledge and skill

Human capital is the knowledge, skill, and health carried by workers, and a training program adds to exactly that. A is physical capital and C is a natural resource. B and E are financial claims, which move purchasing power from one holder to another without adding to what anyone can produce.

Question 3

Question 3 of 4

Real output in Country X grows 5 percent a year. Under the rule of 70, output doubles in roughly

The rule divides 70 by the growth rate: 70/5=14 years. E skips the division and reports 70 itself, D divides 100 by 5 instead of 70, B doubles the growth rate rather than dividing into it, and A repeats the growth rate as a number of years.
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C. 14 years

The rule divides 70 by the growth rate: 70/5=14 years. E skips the division and reports 70 itself, D divides 100 by 5 instead of 70, B doubles the growth rate rather than dividing into it, and A repeats the growth rate as a number of years.

Question 4

Question 4 of 4

Diminishing marginal returns to capital concerns adding capital while other inputs are held fixed. Which of the following states the claim correctly?

The statement is about the marginal product of capital with complementary inputs held constant, and it says those increments shrink past some point. B confuses smaller additions with a falling total, C makes a claim about averages and starts it at the first unit, D substitutes physical wear for a statement about marginal product, and E swaps the fixed input for the variable one and reverses the sign besides.
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A. Each added unit eventually yields a smaller gain.

The statement is about the marginal product of capital with complementary inputs held constant, and it says those increments shrink past some point. B confuses smaller additions with a falling total, C makes a claim about averages and starts it at the first unit, D substitutes physical wear for a statement about marginal product, and E swaps the fixed input for the variable one and reverses the sign besides.

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