Question

1. A higher savings rate that leads to an increase in the capital stock

		leads to increases in labor productivity.
		is associated with a decrease in the rate of growth of the population.
		immediately decreases investment.
		leads to higher interest rates.

2. Factors that influence labor productivity include ________.

		physical capital, human capital, and technology
		the inflation rate, the real wage rate, and the exchange rate
		physical capital, the real wage rate, and technology
		the labor demand curve

3. The gap between real GDP per person in Africa and real GDP per person in the United States has been

		decreasing.
		increasing.
		remaining fairly constant.
		there is no gap in real GDP per person between Africa and the United States.

4. In the labor market, an increase in labor productivity ________ the real wage rate and ________ the level of employment.

raises; increases

lowers; increases

raises; decreases

lowers; decreases

5. An increase in the working-age population results in a

		leftward shift of the supply of labor curve and a decrease in potential GDP.
		rightward shift of demand for labor curve and an increase in potential GDP.
		rightward shift of the supply of labor curve and an increase in potential GDP.
		rightward shift of the demand for labor curve and no change in potential GDP.

6. Other things remaining the same, the greater the expected profit,

		the flatter is the investment demand curve.
		the greater the amount of investment.
		the steeper is the investment demand curve.
		the less the amount of investment.

7. Neoclassical growth theory attributes economic growth to

		technological change.
		increasing population growth.
		the law of diminishing returns.
		fiscal policy.

Answer 1

ques1 ) option a

Increased capital investment means more capital goods will be available for workers to work with which will lead to increase in productivity of the workers .

Ques2 ) option a

Labour productivity depends on the amount of physical capital available like machines , equipments , the level of human capital in terms of level of skills and knowledge and the available technology

Ques3 ) option B

Since the rate of growth in united states has been faster than the rate of growth in Africa , the gap between the real gap per person has been increasing in the two countries .

Ques4 ) option A

An improvement in productivity will increase the efficiency of workers so the demand for workers will increase so their wages and the level of employment will increase .

( answered first 4 parts as per guidelines )