Q: Which formula correctly represents labor productivity as described in the materials?

$Y/L = \\text{output per worker}$

Question 1

Which of the following best explains why economic growth is crucial for improving health outcomes, such as reducing child mortality rates?

Accepted Answer

Economic growth leads to higher GDP per capita, which is strongly correlated with higher survival rates for newborns.

Question 2

Suppose Country A has a GDP per capita of $10,000 and Country B has a GDP per capita of $50,000. According to the study materials, which of the following is most likely true?

Accepted Answer

Country B is likely to have a higher child survival rate than Country A.

Question 3

Which formula correctly represents labor productivity as described in the materials?

Accepted Answer

$Y/L = \text{output per worker}$

Question 4

A country wants to increase its long-run standard of living. According to the materials, which of the following should it focus on?

Accepted Answer

Increasing productivity through investment in physical and human capital.

Question 5

If a country increases its capital per worker ($K/L$), what is the expected effect on productivity ($Y/L$), all else equal?

Accepted Answer

$Y/L$ will increase.

Question 6

Which of the following is an example of investment in human capital?

Accepted Answer

Providing worker training and education programs.

Question 7

Suppose a government wants to boost productivity by encouraging foreign direct investment (FDI). Which of the following best describes FDI?

Accepted Answer

A foreign company building and operating a factory in the domestic country.

Question 8

Which of the following best describes the tradeoff involved in increasing saving to fund investment?

Accepted Answer

Increasing saving requires reducing current consumption to allow for more investment, which can boost future consumption.

Question 9

Which of the following institutions is LEAST likely to promote long-run economic growth?

Accepted Answer

Widespread government corruption.

Question 10

A country implements outward-oriented policies, such as reducing tariffs and encouraging foreign investment. According to the study materials, what is the likely effect?

Accepted Answer

The country will likely experience higher economic growth and improved living standards.

Question 11

Which of the following best explains why technological progress is considered the main driver of long-run increases in living standards?

Accepted Answer

Technological progress allows society to get more output from the same resources.

Question 12

Suppose a country has high levels of corruption and weak property rights. According to the study materials, what is the likely impact on economic growth?

Accepted Answer

Economic growth will likely be slow due to poor incentives for investment and innovation.

Question 13

Which of the following policies is most likely to promote long-run economic growth in a poor country?

Accepted Answer

Allowing free trade and encouraging foreign investment.

Question 14

If a country increases its average years of schooling, what is the expected effect on GDP per capita, according to the materials?

Accepted Answer

GDP per capita will likely increase.

Question 15

Which of the following is an example of a policy that promotes research and development (R&D)?

Accepted Answer

Implementing patent laws to protect inventors.

Question 16

A country is considering two policies: (1) cracking down on government corruption, and (2) giving away condoms to the population. According to the study materials, which policy is more likely to have a significant long-run impact on economic growth?

Accepted Answer

Cracking down on government corruption, because it improves institutions and incentives for growth.

Question 17

Suppose a country has a high $K/L$ (capital per worker) but low $H/L$ (human capital per worker). What is a likely consequence for productivity ($Y/L$)?

Accepted Answer

Productivity may be limited by the low level of human capital.

Question 18

Which of the following best describes the role of institutions in economic growth?

Accepted Answer

Institutions set the rules and incentives that shape economic behavior and growth.

Question 19

A country with inward-oriented policies is most likely to experience which of the following outcomes?

Accepted Answer

Stagnant growth and lower productivity compared to outward-oriented countries.

Question 20

Which of the following is a multi-step process that can lead to higher long-run economic growth, according to the study materials?

Accepted Answer

Increasing saving leads to higher investment, which raises capital per worker ($K/L$), thereby increasing productivity ($Y/L$) and ultimately raising GDP per capita.

Long-Run Economic Growth: Determinants, Patterns, and Policy

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