CHAPTER 3 _ full

1. Which of the following can be measured by the level of real GDP per person?

• productivity and the standard of living
• productivity but not the standard of living
• the standard of living but not productivity
• neither the standard of living nor productivity

2. The level of real GDP person

• differs widely across countries, but the growth rate of real GDP per person is similar across countries.
• is very similar across countries, but the growth rate of real GDP per person differs widely across countries.
• and the growth rate of real GDP per person are similar across countries.
• and the growth rate of real GDP per person vary widely across countries.

3. If one wants to know how the material well-being of the average person has changed over time in a given country, one should look at the

• level of real GDP.
• growth rate of nominal GDP.
• growth rate of real GDP.
• growth rate of real GDP per person.

4. Which of the following is correct?

• Countries with the highest growth rates over the last 100 years are the ones that had the highest level of real GDP 100 years ago.
• Most countries have had little fluctuation around their average growth rates during the past 100 years.
• The ranking of countries by income changes substantially over time.
• Over the last 100 years, Japan had the highest real GDP growth rate, and now has the highest real GDP per person.

5. The one variable that stands out as the most significant explanation of large variations in living standards around the world is

• productivity.
• population.
• preferences.
• prices.

6. Productivity is defined as the quantity of

• labor required to produce a nation’s GDP.
• labor required to produce one unit of goods and services.
• goods and services produced from each unit of labor input.
• goods and services produced per unit of time.

7. Which of the following is a correct way to measure productivity?

• Divide the number of hours worked by the quantity of output.
• Divide the quantity of output by the number of hours worked.
• Determine how much output is produced in a given time.
• Determine how much time it takes to produce a unit of output.

8. Which of the following is not correct?

• Countries that have had higher output growth per person have typically done so without higher productivity growth.
• A country's standard of living and its productivity are closely related.
• Productivity refers to output produced per hour of work.
• Increases in productivity can be used to increase output or leisure.

9. The key determinant of the standard of living in a country is

• the amount of goods and services produced from each hour of a worker's time.
• the total amount of goods and services produced within the country.
• the total amount of its physical capital.
• its growth rate of real GDP.

10. Suppose that real GDP grew more in Country A than in Country B last year.

• Country A must have a higher standard of living than country B.
• Country A's productivity must have grown faster than country B's.
• Both of the above are correct.
• None of the above are correct.