ECON 203, Chapter 7 TAMU questions with correct answers

What is economic growth rate? CORRECT ANSWER It is the annual % change in real GDP What are living standards measured by? CORRECT ANSWER Real GDP per capita Living Standards amongst countries CORRECT ANSWER Living standards vary greatly between different countries. The rankings change over time because economies grow at different rates. Labor Productivity CORRECT ANSWER Labor productivity is what a country's standard of living is determined by. Increase is living standards is the result of increasing labor productivity. Formula for Labor Productivity CORRECT ANSWER Labor Productivity = Real GDP/ Total Labor Hours Worked What are the determinants of Labor Productivity CORRECT ANSWER 1. The amount of physical capital per worker(e.g. goods that are used to produce goods/ e.g. machinery) 2. The amount of human capacity per worker(e.g. education, skills, experience, etc.) 3. The amount of natural resources per worker(e.g. Farm Land) 4. Technological Advancement= more production Public Policy's that could lead to economic growth C