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Foundations of Macroeconomics, 5e (Bade/Perkin)
Chapter 9 Economic Growth
9.1 The Basics of Economic Growth
1) Economic growth is defined as

A) a decrease in the rate of inflation.
B) an increase in employment.
C) a sustained expansion of production possibilities.
D) an increase in the wage rate.
E) an increase in the nation's population.
Answer: C
Topic: Economic growth
Skill: Level 1: Definition
Section: Checkpoint 9.1
Status: WM
AACSB: Reflective thinking
2) Economic growth is a sustained expansion of production possibilities, as measured by the

increase in ________ over time.
A) real GDP
B) population
C) inflation
D) the price level
E) employment
Answer: A
Status: CT
3) A country will likely experience an increase in poverty if

A) its population decreases over time.
B) its real GDP growth rate decreases or slows over time.
C) its inflation rate decreases or slows over time.
D) its real GDP per person growth rate increases over time.
E) it does not receive foreign aid.
Answer: B
Skill: Level 2: Using definitions
Status: NU
1
Copyright © 2011 Pearson Education, Inc.
4) Economic growth is defined as equal to the increase in
A) employment.
B) population.
C) real GDP.
D) the price level.
E) the inflation rate.
Answer: C
Status: AA
5) Which of the following variables is used to determine a country's economic growth?

i) real GDP
ii) wages
iii) inflation
A) i and ii only.
B) i, ii and iii.
C) ii and iii.
D) i only.
E) i and iii.
Answer: D
Status: CD new
6) The growth rate of real GDP is measured by the following formula:

A) real GDP in the current year minus real GDP in the previous year.
B) real GDP in the previous year minus real GDP in the current year.
 real GDP in the current year - real GDP in the previous year 
C)   × 100.
 real GDP in the previous year 
D) (real GDP in the current year + real GDP in the previous year) ÷ 2.
E) (real GDP in the current year minus real GDP in the previous year) × 100.
Answer: C
Topic: Calculating growth rates
Status: AA
AACSB: Analytical reasoning
2
7) The growth rate of real GDP equals
A) [(employment in the current year - employment in previous year)/employment in previous
year] × 100.
B) [(real GDP in current year - real GDP in previous year) ÷ real GDP in previous year] × 100.
C) [(real GDP in previous year - real GDP in current year) ÷ real GDP in previous year] × 100.
D) [(real GDP in current year - real GDP in previous year) ÷ real GDP in current year] × 100.
E) (real GDP in current year - real GDP in previous year) × 100.
Answer: B
Status: DMC
8) If real GDP was $14 trillion last year and is $16 trillion this year, what is the growth rate?
A) 12.5 percent
B) -12.5 percent
C) 14 percent
D) $2 trillion
E) 47 percent
Answer: C
Status: CD new
9) Suppose France's real GDP grew from $750 billion in 2008 to $821 billion in 2009. What was
the growth rate of France's real GDP?
A) 10 percent
B) 9.5 percent
C) 9.1 percent
D) 8.6 percent
E) $71 billion
Answer: B
Topic: Growth rate
Status: CD new
3
10) If U.S. real GDP in 2007 was $13.25 trillion and U.S. real GDP in 2008 was $13.31 trillion,
what was the economic growth rate of the United States during this period?
A) 18 percent
B) -1.36 percent
C) 1.36 percent
D) 6.9 percent
E) $1.8 trillion
Answer: C
Status: CD new
11) If real GDP in year 1 is $72 million and real GDP in year 2 is $87 million, then the growth
rate of real GDP is
A) 15 percent.
B) $15 million.
C) 20.8 percent.
D) 17 percent.
E) 83 percent.
Answer: C
Status: CD new
12) In 2008, real GDP in the United States was $13,312 billion. In 2009, real GDP in the United
States was $13,112 billion. What was the U.S. economic growth rate from 2008 to 2009?
A) -1.5 percent
B) 1.5 percent
C) 0.98 percent
D) 0.12 percent
E) $200 million
Answer: A
Topic: Growth rate
Status: CD new
4
13) Using the data in the table above, the growth rate of real GDP for 2008 is equal to
A) 9.09 percent.
B) 7.00 percent.
C) 5.00 percent.
D) 4.76 percent.
E) 10.0 percent.
Answer: B
Status: CD new
14) Using the data in the table above, real GDP per person in 2007 is
A) $70,000.
B) $71,429.
C) $75,000.
D) $70 trillion.
E) 7 percent.
Answer: A
Status: CD new
15) Using the data in the table above, the growth rate of real GDP has
A) increased from year to year.
B) increased more rapidly from year to year.
C) remained constant from year to year.
D) slowed from year to year.
E) probably changed, but more information is needed about the price level to determine by how
much it has changed.
Answer: A
Skill: Level 3: Using models
Status: CD new
5
16) Suppose India wants to measure how much the standard of living has changed over the last
decade. Which piece of data should India use?
A) population.
B) real GDP per person.
C) real GDP.
D) wages.
E) inflation.
Answer: B
Topic: Standard of living
Status: CD new
17) To measure the change in the standard of living, it is best to use the growth rate
A) from the Rule of 70.
B) of real GDP.
C) of the population.
D) of real GDP per person.
E) of the price level.
Answer: D
Status: NU
18) In growth theory, the change in a country's standard of living is measured by the change in
A) real GDP per person.
B) real GDP.
C) the nation's capital stock.
D) wages per person.
E) employment.
Answer: A
Status: WM
6
19) A measure of growth in the standard of living is the growth in
A) real GDP.
B) population.
C) real GDP minus the growth in population.
D) population minus the growth in real GDP.
E) employment.
Answer: C
Status: WM
20) Growth in the standard of living is measured by the increase in

A) real GDP.
B) the Rule of 70.
C) employment.
D) real GDP per person.
E) consumption.
Answer: D
Status: AA
21) The growth rate of real GDP per person equals the
A) population growth rate plus the growth rate of real GDP.
B) change in the economic growth rate divided by the change in the population growth rate.
C) the economic growth rate per person divided by the change in the population growth rate.
D) growth rate of real GDP minus the growth rate of the population.
E) population growth rate plus the growth rate of real GDP then divided by the initial level of
real GDP.
Answer: D
Topic: Growth rate, real GDP per person
Status: AA
7
22) If real GDP grows at a faster rate than does population, then the standard of living, as
measured by real GDP per person,
A) improves.
B) worsens.
C) remains the same.
D) cannot be measured.
E) either improves, worsens, or stays the same, depending on the size of the population and the
actual level of real GDP.
Answer: A
Status: CD new
23) The population in the current year is 31.5 million and the real GDP is $814 million. The
previous year's statistics were a population of 31 million and a real GDP of $800 million. The
change in the standard of living, measured by growth in real GDP per person, is
A) 1.6 percent.
B) 7.75 percent.
C) 4.3 percent.
D) 6 percent.
E) 0 percent.
Answer: C
Status: CD new
24) Assume the population growth rate is 2 percent and the real GDP growth rate is 5 percent.
The change in standard of living, as measured by the growth rate in real GDP per person, is
A) 7 percent.
B) 2.5 percent.
C) 5 percent.
D) 3 percent.
E) -3 percent.
Answer: D
Status: WM
8
25) Real GDP in the country of Oz is growing at 5 percent and its population is growing at 2
percent. In the country of Lilliput, real GDP is growing at 4 percent and its population is growing
at 0.5 percent. Thus,
A) real GDP per person in Oz is growing at a faster rate than in Lilliput.
B) real GDP per person in Lilliput is growing at a faster rate than in Oz.
C) real GDP per person in Lilliput is growing at the same rate as in Oz.
D) real GDP per person in Lilliput is growing at a rate that is not comparable to that in Oz.
E) we need more information to determine if real GDP per person in Lilliput is growing faster or
slower than real GDP per person in Oz.
Answer: B
Status: DMC
26) If the U.S. population grew at a 0.9 percent during 2006 and real GDP grew at a 4.4 percent
during the same period, what was the growth rate of real GDP per person?
A) 3.5 percent
B) 5.3 percent
C) 4.0 percent
D) -3.5 percent
E) 4.4 percent
Answer: A
Status: DMC
27) If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real
GDP per person grows at a rate of
A) 4 percent.
B) 2 percent.
C) 0.5 percent.
D) -3 percent.
E) 8 percent.
Answer: A
Status: NU
9
28) Iceland's real GDP grows at a rate of 2.6 percent and population grows at a rate of 0.8
percent. Iceland's real GDP per person grows at a rate of
A) 1.8 percent.
B) 2.6 percent.
C) 3.4 percent.
D) 3.0 percent.
E) 3.2 percent.
Answer: A
Status: MR
29) If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the
population is 2.5 percent per year, the growth rate of real GDP per person is
A) 3 + 2.5 = 5.5 percent per year.
B) [(3 - 2.5) ÷ 2.5] × 100 = 20 percent per year.
C) [(2.5 - 3) ÷ 3] × 100 = 16.6 percent per year.
D) 3 - 2.5 = 0.5 percent per year.
E) 2.5 - 3 = -0.5 percent per year.
Answer: D
Status: TPS
30) In 2009, U.S. real GDP decreased by 3 percent and the population grew by 1 percent. Thus,
real GDP per person
A) increased 2 percent.
B) decreased 2 percent.
C) increased 4 percent.
D) decreased 4 percent.
E) decreased 3 percent.
Answer: D
Status: AA
10
31) If a country experiences a real GDP growth rate of 1 percent and population growth of 2
percent, then the growth rate of real GDP per person is
A) 3 percent.
B) 2 percent.
C) 1 percent.
D) -1 percent.
E) 0 percent.
Answer: D
Status: CT
32) During 2008, Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth
rate per person of -1.3 percent. These rates indicate that in Swaziland
A) there was an error when calculating the growth rates because the growth rate of real GDP per
person cannot be negative.
B) the population growth rate was negative.
C) the population grew at a faster rate than real GDP.
D) poverty levels are declining.
E) real GDP grew more rapidly than did the population.
Answer: C
Skill: Level 5: Critical thinking
Status: CT
33) In India last year, the growth rate of real GDP was 3.5 percent and the population grew from
1,000 million people to 1,100 million. Real GDP per person
A) increased by 13.5 percent.
B) decreased by 6.5 percent.
C) increased by 6.5 percent.
D) decreased by 13.5 percent.
E) increased by 3.5 percent.
Answer: B
Status: AA
11
34) Belgium's real GDP per person is $33,000 and Austria's is $34,700. The population growth
rate in Belgium is 0.13 percent and the growth rate of real GDP is 3.0 percent. The population
growth rate in Austria is 0.08 percent and the growth rate of real GDP is 3.3 percent. If these
growth rates continue, how many years will it take for Belgium's real GDP per person to equal
Austria's real GDP per person?
A) Belgium's standard of living will never equal Austria's.
B) Just over 23 years
C) Just over 24 years
D) Just over 21 years
E) Over 230 years
Answer: A
Status: RS
35) If Country A's real GDP is growing at 6 percent per year and Country B's real GDP is
growing at 6 percent per year, then the standard of living is
A) growing more rapidly in Country A.
B) higher in Country B.
C) changing at the same rate in Country A and Country B.
D) growing more slowly in Country A.
E) changing at the same rate in Country A and Country B only if the rate of population growth is
the same in both countries.
Answer: E
Status: NU
36) If Country A's real GDP per person is growing at 6 percent and Country B's real GDP per
person is growing at 3 percent, then
A) the standard of living is higher in Country A.
B) the standard of living is higher in Country B.
C) the standard of living is growing more rapidly in Country A.
D) we cannot say whose standard of living is growing more rapidly without knowing the
population growth rate.
E) we cannot say whose standard of living is growing more rapidly without knowing the growth
rate of real GDP.
Answer: C
Status: NU
12
37) According to the data in the table above,
A) the standard of living improved between year 1 and year 2.
B) the standard of living worsened between year 1 and year 2.
C) as measured by real GDP per person, the standard of living remained the same between year 1
and year 2.
D) real GDP grew more rapidly than population between year 1 and year 2.
E) real GDP grew more slowly than population between year 1 and year 2.
Answer: C
Status: NU
38) According to the data in the table above, real GDP grew at a rate of ________ between year
1 and year 2.
A) 10 percent
B) 1 percent
C) 50 percent
D) 5 percent
E) 55 percent
Answer: A
Status: NU
39) According to the data in the table above, real GDP per person grew at a rate of ________
between year 1 and year 2.
A) 10 percent
B) 0 percent
C) 1 percent
D) 5 percent
E) 50 percent
Answer: B
Status: NU
13
40) The rule of ________ can be used to calculate the number of years that it takes for the level
of a variable to ________.
A) 20; double
B) 70; triple
C) 70; double
D) 20; triple
E) thumb; double
Answer: C
Topic: Rule of 70
Status: AA
41) The Rule of 70 states that the level of a variable will double in
A) 70 years.
B) the number of years equal to the variable's annual rate of growth divided by 70.
C) the number of years equal to 70 divided by the variable's annual growth rate.
D) the number of years equal to the variable's annual growth rate minus 70.
E) the number of years equal to 70 multiplied by the variable's annual growth rate expressed as a
decimal.
Answer: C
Topic: Rule of 70
Status: WM
42) The Rule of 70, as applied to real GDP growth, can be used to find the
A) real GDP growth rate necessary to double growth.
B) number of years it takes for the level of real GDP to double.
C) growth rate of real GDP.
D) number of years it takes for the growth rate of real GDP to double.
E) population growth rate necessary to double the GDP growth rate.
Answer: B
Topic: Rule of 70
Status: CT
14
43) The Rule of 70 can be used to calculate the
A) economic growth rate per month.
B) population growth rate per year.
C) number of years it would take for the level of any variable to double.
D) 70 percent level of the economic growth rate.
E) economic growth rate per year.
Answer: C
Topic: Rule of 70
Status: AA
44) Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its
growth rate of real GDP per person is 0.9 percent?
A) 63 years
B) 77.7 years
C) 70 years
D) 109 years
E) 100 years.
Answer: B
Topic: Rule of 70
Status: DMC
45) If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it
take for Country A's real GDP to double?
A) 10
B) 7
C) 5
D) 30
E) 14
Answer: C
Topic: Rule of 70
Status: NU
15
46) According to the Rule of 70, if a country grows at 2.0 percent per year instead of 1.5 percent
per year, how many fewer years will it take to double its level of real GDP?
A) It will take 11.6 years fewer.
B) It will take 35 years fewer.
C) It will take 58.3 years fewer.
D) It will take 20 years fewer.
E) It will take 17.9 years fewer.
Answer: A
Topic: Rule of 70
Status: DMC
47) The annual growth rate of an economy is 10 percent. The economy's GDP will double in
about ________ years.
A) 7
B) 10
C) 12
D) 14
E) 20
Answer: A
Topic: Rule of 70
Status: CD new
48) Using the rule of 70, a sustained 3 percent per year real GDP growth rate will
A) last for 70 years.
B) double the current level of real GDP in about 23 years.
C) double the current level of real GDP in about 210 years.
D) double the current level of real GDP in about 70 years.
E) double the current level of real GDP in about 40 years.
Answer: B
Topic: Rule of 70
Status: CD new
16
49) A nation's annual growth rate of real GDP per person is 2 percent. Its standard of living will
A) double in 35 years.
B) not change because its population is growing.
C) fall because of its population growth.
D) double in 10 years.
E) double in 50 years.
Answer: A
Topic: Rule of 70
Status: WM
50) If a country experiences a real GDP growth rate of 6 percent, real GDP will double in
A) 10 years.
B) 11.67 years.
C) 14 years.
D) 17.5 years.
E) 16.67 years.
Answer: B
Topic: Rule of 70
Status: CT
51) This year, real GDP per person in Country A is eight times real GDP per person in Country
B. If Country B's real GDP per person grows at a rate of 5 percent, about how many years will it
take for Country B to reach the level of real GDP per person in Country A in this year?
A) 14 years
B) 28 years
C) 56 years
D) 42 years
E) It will never reach Country A's level of GDP per person
Answer: D
Topic: Rule of 70
Skill: Level 4: Applying models
Status: NU
17
52) This year Iceland has a real GDP per person that is approximately 8 times greater than that of
Cape Verde. Cape Verde's growth rate of real GDP per person was 5.2 percent. If Cape Verde
maintains this current growth rate, approximately how many years will it take for Cape Verde's
real GDP per person to reach the same level that Iceland has this year?
A) 13.5 years
B) 20 years
C) 27 years
D) 40 years
E) 54 years
Answer: D
Topic: Rule of 70
Status: CT
53) If it took 20 years for real GDP to double, what was the growth rate of real GDP?
A) 4.5 percent
B) 3.0 percent
C) 3.5 percent
D) 4 percent
E) 5 percent
Answer: C
Topic: Rule of 70
Status: AA
54) In this year, Country A has a real GDP per person that is 4 times greater than that of Country
B. Country B's growth rate of real GDP per person is 3.5 percent per year. How many years will
it take for Country B's real GDP per person to reach the same level that Country A had in this
year?
A) 10 years
B) 20 years
C) 40 years
D) 60 years
E) 56 years
Answer: C
Topic: Rule of 70
Status: CT
18
55) Suppose Mexico's real GDP per person in 2008 is $6,000 and the U.S. real GDP per person
is $24,000. Mexico has annual growth in real GDP per person of 5 percent. Approximately how
many years will it take Mexico to equal $24,000 of real GDP per person?
A) 14 years
B) 18 years
C) 28 years
D) 36 years
E) 40 years
Answer: C
Topic: Rule of 70
Status: WM
56) Over the past 100 years, real GDP per person in the United States has grown at an average
rate of about ________ per year.
A) 1 percent
B) 2 percent
C) 5 percent
D) 10 percent
E) 7.5 percent
Answer: B
Topic: Eye on the past, how fast has real GDP per person grown?
Status: MR
57) For the world, what period of time experienced the fastest growth rate of real GDP per
person?
A) around 500 B.C.
B) around 400 A.D.
C) between 1000 A.D. and 1500 A.D.
D) after about 1850 A.D.
E) between 1500 A.D. and 1850 A.D.
Answer: D
Topic: Eye on the past, how fast has real GDP per person grown?
Status: MR
19
58) The economic growth rate is measured as the
A) annual percentage change of real GDP.
B) annual percentage change of employment.
C) amount of real GDP.
D) annual percentage change of the population.
E) amount of population.
Answer: A
Status: STUDY GUIDE
59) Economic growth is a sustained expansion of production possibilities measured as the

increase in ________ over a given period.
A) real GDP
B) real GDP per person
C) the standard of living
D) capital per person
E) population
Answer: A
Status: MyEconLab Web Site
60) The economic growth rate is expressed as the ________.

A) annual percentage change of real GDP per person
B) growth rate of real GDP minus the growth rate of population
C) the standard of living
D) annual percentage change of real GDP
E) growth rate of the population
Answer: D
20
61) Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year. The
economic growth rate between these years has been
A) 10.31 percent.
B) 4.65 percent.
C) 5.67 percent.
D) 7.67 percent.
E) $0.4 trillion.
Answer: B
Status: STUDY GUIDE
62) The table gives information about the economy of Japan. The economic growth rate in 1997
is ________ percent.
A) 8.0
B) 0.8
C) 0.08
D) 0.008
E) 4
Answer: B
63) The standard of living is measured by

A) real GDP.
B) employment.
C) employment per person.
D) real GDP per person.
E) the population.
Answer: D
Status: STUDY GUIDE
21
64) If the growth rate of population is greater than a nation's growth rate of real GDP, then its
real GDP per person
A) falls.
B) rises.
C) does not change.
D) might rise, fall, or not change.
E) cannot be measured.
Answer: A
Status: STUDY GUIDE
65) The table above gives information about the economy of France. The growth rate of real
GDP per person in 1998 is ________ percent.
A) 3.1
B) 0.4
C) 2.7
D) 4.0
E) 1.9
Answer: C
66) If real GDP increases by 6 percent and at the same time the population increases by 2
percent, then real GDP per person grows by
A) 6 percent.
B) 4 percent.
C) 2 percent.
D) 8 percent.
E) 3 percent.
Answer: B
Status: STUDY GUIDE
22
67) If real GDP grew 5 percent last year and the population grew 2 percent, then real GDP per
person grew by ________ percent.
A) 10
B) 5
C) 3
D) 2
E) 7
Answer: C
68) If a country experiences a real GDP growth rate of 4 percent, real GDP will double in
A) 14 years.
B) 17.5 years.
C) 23.3 years.
D) 35 years.
E) 25 years.
Answer: B
Topic: Rule of 70
Status: STUDY GUIDE
69) Suppose that in the future, real GDP per person grows 2 percent a year in the United States
and 4 percent a year in China. It will take real GDP per person approximately ________ years to
double in the United States and approximately ________ years to double in China.
A) 70; 35
B) 35; 17.5
C) 35; 8.75
D) 50; 25
E) 20; 10
Answer: B
Topic: Rule of 70
23
70) The table above gives information about the economy of Spain. If the growth rate in 1998 is
maintained, real GDP will double in ________ years.
A) 4
B) 19
C) 10
D) 18
E) 25
Answer: D
Topic: Rule of 70
9.2 The Sources of Economic Growth
1) In a small western nation, labor productivity last year was $20 per hour and total labor hours
were 400 hours. Hence, real GDP
A) was $80,000.
B) was $8,000.
C) was $20.
D) grew by 5%.
E) 00$416,000 over 52 weeks.
Answer: B
Topic: Sources of economic growth
Status: CD new
2) Aggregate hours show a sustained increase only as a result of

A) individuals working more hours.
B) a greater percentage of the population entering the workforce.
C) an increase in the population.
D) increases in overtime work.
E) sustained increases in the labor force participation rate.
Answer: C
Topic: Sources of growth, aggregate hours
Status: WM
24
3) In the long run, most of the growth in aggregate hours comes from
A) population growth.
B) advances in technology.
C) increases in the labor force participation rate.
D) increases in labor productivity.
E) None of the above answers is correct because the premise of the question is wrong since
aggregate hours will not grow in the long run.
Answer: A
Status: MR
4) The data show that in the long run, sustained growth in the quantity of labor will come from
A) continual increases in average hours.
B) constant increases in the labor force participation rate.
C) constant decreases in the unemployment rate.
D) increases in the population.
E) increases in labor productivity.
Answer: D
Status: NU
5) In the United States, there has been ________ in the quantity of labor and, as a benefit of
economic growth, ________ in average hours per worker.
A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease
E) an increase; no change
Answer: B
Status: CT
25
6) As the U.S. economy has grown over time, a benefit of the economic growth has been the fact
that
A) average hours have increased.
B) average hours have decreased.
C) labor productivity has decreased.
D) real GDP per person has decreased.
E) aggregate hours have decreased.
Answer: B
Topic: Sources of growth, average hours
Status: NU
7) Population growth directly brings growth in ________ because the quantity of labor increases.
A) real GDP
B) labor productivity
C) real GDP per person
D) capital per hour of work
E) average hours per worker
Answer: A
Topic: Sources of growth, population
Status: AA
8) Labor productivity is defined as

A) total real GDP.
C) total output multiplied by total hours of labor.
D) real GDP per hour of labor.
E) hours of work per person.
Answer: D
Topic: Sources of growth, labor productivity
Status: TPS
26
9) Labor productivity equals
A) real GDP.
B) real GDP per hour of labor.
C) the total production of labor.
D) the quantity of labor hours divided by real GDP.
E) real GDP divided by the amount of human capital.
Answer: B
Topic: Labor productivity
Status: AA
10) Labor productivity is equal to the quantity of

A) real GDP produced by one hour of labor.
B) workers employed during one hour.
C) real GDP consumed by the total population in one hour.
D) real GDP.
E) workers who are gainfully employed.
Answer: A
Status: WM
11) The quantity of real GDP produced by one hour of labor is defined as
A) real GDP per person.
B) the advance in technology.
C) the growth rate of technology.
D) labor productivity.
E) economic growth.
Answer: D
Status: CT
27
12) Labor productivity is calculated as
A) (real GDP ÷ aggregate hours).
B) (real GDP ÷ aggregate hours × number of workers).
C) (real GDP ÷ number of workers × ratio of capital per worker).
D) (real GDP ÷ technology level).
E) (real GDP ÷ aggregate hours × number of workers) × 100.
Answer: A
Status: DMC
13) Sustained increases in real GDP per person depend on

A) increases in the quantity of labor.
B) increases in the population.
C) increases in average hours.
D) increases in labor productivity.
E) decreases in labor productivity.
Answer: D
Topic: Sources of growth, labor productivity
Status: NU
14) An increase in labor productivity

A) increases the standard of living.
B) decreases the standard of living.
C) might be the result of an increase in the quantity of labor.
D) generally occurs when physical capital decreases because firms must then hire more workers.
E) cannot occur without a corresponding increase in employment.
Answer: A
Status: MR
28
15) Last year, in a nation far to the South, real GDP was $90 million and 900,000 workers were
employed. This year real GDP is $100 million, 950,000 workers are employed, and the number
of hours each worker works per year did not change. Hence, labor productivity
A) has increased.
B) has decreased.
C) has remained constant.
D) cannot be compared between the two years because both real GDP and the number of workers
increased.
E) might have changed, but more information is needed to determine if it changed.
Answer: A
Status: NU
16) If labor productivity is $30 per hour and there are 300 billion hours worked in a year's time,
what is real GDP?
A) 300 billion ÷ $30 = $10 billion
B) $30 × 300 billion = $9,000 billion
C) ($30 ÷ 300 billion) × 100 = $10 billion
D) (300 billion ÷ $30) × 100 = $1 trillion
E) (300 billion ÷ $30) ÷ 100 = $100 million
Answer: B
Status: TPS
17) Canada's population is 31 million and Japan's population is 126 million. Labor productivity
in the two nations is the same. Hence, real GDP per person is ________ and real GDP is
________.
A) higher in Japan; larger in Japan
B) higher in Canada; larger in Canada
C) the same in Japan and Canada; larger in Japan
D) higher in Japan; the same in Japan and Canada
E) higher in Japan; larger in Canada
Answer: C
Status: MR
29
18) If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is
170 billion hours, labor productivity is
A) $2.63 an hour.
B) $2.86 an hour.
C) $35,000.
D) $38.00 an hour.
E) 920 hours.
Answer: D
Status: CT
19) Real GDP is $700 billion, average hours worked per week is 42 and aggregate hours 150
billion hours. What is the economy's labor productivity?
A) $1.80 per hour
B) $3.75 per hour
C) $16.67 per hour
D) $46.67 per hour
E) $4.50 per hour
Answer: D
Status: CD new
20) Labor productivity growth depends on

i. saving and investment.
ii. increases in human capital.
iii. technological growth.
A) i only
B) ii only
C) iii only
D) Both ii and iii
E) i, ii, and iii
Answer: E
Topic: Increase in labor productivity
Status: NU
30
21) Labor force productivity has increased from $30 per hour to $32 per hour over the past year.
This could result from
A) only an increase in real GDP.
B) an increase in real GDP with no change in the aggregate hours or an decrease in aggregate
hours with no change in real GDP.
C) only a decrease in aggregate hours.
D) an increase in the labor force participation rate.
E) an increase in population.
Answer: B
Status: CD new
22) Workers in the United States are ________ productive than workers in China because
________.
A) more; workers in the U.S. have more capital per worker.
B) more; there are more college-educated workers in the United States.
C) less; there are fewer workers in the United States.
D) less; the labor force participation rate is lower in the United States.
E) equally as; China's real GDP per person equals the U.S. real GDP per person.
Answer: A
Status: CD new
23) In recent years, Taiwan has experienced increases in savings and investment. As a result of
the higher investment and saving, we expect
i) increases in physical capital
ii) increases in the inflation rate
iii) advances in technology
A) i and iii.
B) i and ii.
C) ii only.
D) ii and iii.
E) i, ii and iii.
Answer: A
Topic: Increase in labor productivity, physical capital
Status: CD new
31
24) If the stock of physical capital (that is machinery, equipment, etc.) and human capital remain
the same and the population increases, then
A) labor productivity will increase.
B) labor productivity will decrease.
C) the standard of living will increase.
D) the new labor will be more productive.
E) real GDP decreases.
Answer: B
Status: AA
25) The widespread adoption of computers in the workplace has likely lead to
A) no change in the quantity of labor hours.
B) an increase in labor productivity because computers are a capital good.
C) a decrease in labor productivity because computers are a capital good.
D) a decrease in human capital because computers are physical capital.
E) an increase in the supply of labor because people are needed to operate the computers.
Answer: B
Status: CT
26) Which of the following are required for economic growth?

i) more goods and services produced per hour of work
ii) an increase in the average hours of labor per person
iii) an increase in prices
A) i and iii.
B) i and ii.
C) ii and iii.
D) i only.
E) ii only.
Answer: B
Status: CD new
32
27) A reason for an increase in labor productivity growth is
A) an increase in people's human capital.
B) a decrease in the capital stock so that firms must hire more workers.
C) growth in the supply of labor.
D) an increase in the population so that firms hire more workers.
E) an increase in the quantity of labor.
Answer: A
Topic: Increase in labor productivity, human capital
Status: CT
28) Human capital refers to the

A) accumulated skill and knowledge of human beings.
B) accumulated equipment used by human beings.
C) accumulation of money by human beings.
D) accumulation of money and equipment used by human beings.
E) accumulated financial capital people have acquired.
Answer: A
Status: CT
29) Human capital is defined as the

A) amount of machinery human beings have.
B) number of factories built for human beings.
C) accumulated skill and knowledge of human beings.
D) accumulated amount of machinery and factories human beings own.
E) skills that people are born with.
Answer: C
Status: WM
33
30) Increases in human capital can come
A) only from formal schooling.
B) from employing more machinery.
C) only from on-the-job experience.
D) from formal education and on-the-job learning.
E) from nowhere because whatever human capital an individual possesses is what he or she was
born with.
Answer: D
Status: WM
31) Expansion of a nation's human capital can be achieved through

A) education and job experience.
B) education and saving.
C) education and technology improvements.
D) education only.
E) nothing because human capital is determined by the skills people are born with.
Answer: A
Status: DMC
32) Human capital is acquired

A) only in school.
B) only through on-the-job training.
C) only through job experience.
D) through schooling, job training, and experience.
E) only at birth, that is, it's people's inborn talents.
Answer: D
Status: NU
34
33) Labor productivity increases if
i. human capital decreases.
ii. technology advances.
iii. quality of education decreases.
A) i only
B) ii only
C) iii only
D) Both i and ii
E) Both ii and iii
Answer: B
Topic: Increase in labor productivity, technology
Status: CT
34) ________ increases with education, training, and job experience.

i. Physical capital
ii. Human capital
iii. Financial capital
A) i only
B) ii only
C) iii only
D) Both ii and iii
E) i, ii, and iii
Answer: B
Status: TPS
35) Language, writing, and mathematics are examples of

A) physical capital.
C) technologies embodied in human capital.
D) technologies embodied in physical capital.
E) financial capital.
Answer: C
Topic: Labor productivity, technology
Status: NU
35
36) Sustained growth in the quantity of labor hours worked depends on
A) saving and investment.
B) technological change.
C) population growth.
D) government purchases.
E) sustained increases in labor force participation.
Answer: C
Status: TPS
37) U.S. labor productivity slowed during the 1970s because of

i. increasing government taxes and regulations on production.
ii. the necessity to cope with energy price increases.
iii. inflation, which shortened the horizon over which businesses made their borrowing plans.
A) i only
B) ii only
C) iii only
D) Both i and ii
E) i, ii, and iii
Answer: E
Topic: Eye on the U.S. economy, U.S. labor productivity growth
Status: TPS
38) The only source of growth in the quantity of labor that is sustainable over long periods of
time is
A) an increase in the labor force participation rate.
B) population growth.
C) a decrease in labor productivity.
D) a decrease in the unemployment rate.
E) an increase in labor productivity.
Answer: B
Status: STUDY GUIDE
36
39) Labor productivity equals ________.
A) real GDP × aggregate hours
B) real GDP ÷ aggregate hours
C) aggregate hours ÷ real GDP
D) aggregate hours × labor productivity
E) aggregate hours ÷ labor productivity
Answer: B
40) Labor productivity equals

A) real GDP divided by the capital stock.
B) real GDP divided by the population
C) total wages divided by real GDP.
D) real GDP divided by aggregate hours.
E) aggregate hours divided by employment.
Answer: D
41) Real GDP equals aggregate hours

A) divided by labor productivity.
B) minus labor productivity.
C) plus labor productivity.
D) multiplied by labor productivity.
E) multiplied by human capital.
Answer: D
Status: STUDY GUIDE
37
42) If real GDP is $1,200 billion, the population is 60 million, and aggregate hours are 80 billion,
labor productivity is
A) $5.00 an hour.
B) $6.67 an hour.
C) $15.00 an hour.
D) $20,000.
E) $150 an hour.
Answer: C
Status: STUDY GUIDE
43) If aggregate hours are 100 billion hours and labor productivity is $40 an hour, than real GDP
equals
A) $100 billion.
B) $40 billion.
C) $100 trillion.
D) $2.5 trillion.
E) $4 trillion.
Answer: E
Status: STUDY GUIDE
44) Which of the following lists gives factors that increase labor productivity?
A) saving and investment in physical capital, and wage increases
B) expansion of human capital, labor force increases, and discovery of new technologies
C) expansion of human capital, population growth, and discovery of new technologies
D) saving and investment in physical capital, expansion of human capital, and discovery of new
technologies
E) labor force increases and wage increases
Answer: D
Status: STUDY GUIDE
38
45) Growth in physical capital depends most directly upon the
A) amount of saving and investment.
B) number of firms in the nation.
C) speed of population growth.
D) amount of government expenditures.
E) level of human capital.
Answer: A
Status: STUDY GUIDE
46) Human capital is

A) the same as labor productivity.
B) a measure of the number of labor hours available.
C) the accumulated skills and knowledge of workers.
D) the average number of years of schooling of the labor force.
E) is what people are born with and cannot be changed.
Answer: C
Status: STUDY GUIDE
9.3 Theories of Economic Growth
1) Thomas Malthus was an economist who contributed to the ________ theory of growth.
A) classical
B) neoclassical
C) new growth
D) socialist
E) Keynesian
Answer: A
Topic: Classical growth theory
Status: AA
39
2) The classical growth model is most closely associated with
A) John Maynard Keynes.
B) Ben Bernanke.
C) Adam Smith.
D) Robert Solow.
E) Thomas Malthus.
Answer: E
Status: CD new
3) The Malthusian theory

A) is also called the classical growth theory and predicts that we will run out of resources.
B) is also called the neoclassical growth theory.
C) predicts that the real wage will continue to increase as long as technology increases.
D) claims that the subsistence wage will increase over time.
E) shows that the production function will shift upward continuously.
Answer: A
Status: CD new
4) A key element of the classical growth theory is that

A) economic growth can be sustained as long as government intervention does not occur.
B) increases in technology drive economic growth.
C) an increase in population leads to increase in labor supply and a decline in real wage rates.
D) low taxes promote economic growth.
E) market forces drive economic growth.
Answer: C
Status: CD new
40
5) The classical theory was developed in the late 18th and early 19th centuries
A) and therefore is not accepted today.
B) during a time of population decline.
C) and has proponents today who fear population growth and overpopulation.
D) and can not be explained using the modern tool of the production function.
E) and still applies to the most developed nations today, though not to the less developed nations.
Answer: C
Status: WM
6) Classical growth theory predicts that in the long run there will be
A) zero economic growth.
B) positive economic growth.
C) negative economic growth.
D) sustained increases in the productivity growth rate
E) sustained increases in economic growth.
Answer: A
Status: NU
7) According to classical growth theory, people earn only a subsistence real income because of
growth in
A) technology.
B) capital.
C) population.
D) employment.
E) labor productivity.
Answer: C
Status: DMC
41
8) Which of the following are predicted by the classical growth theory?
i) population growth will end economic growth
ii) real GDP per person will return to subsistence level
iii) technology drives persistent economic growth
A) i and ii.
B) i, ii and iii.
C) i only.
D) ii only.
E) i and iii.
Answer: A
Status: CD new
9) If labor productivity rises above the subsistence level then, according to classical growth
theory,
A) population growth will slow down.
B) a population explosion will occur.
C) labor productivity growth permanently increases.
D) real GDP per person will remain above the subsistence level.
E) real GDP per person will fall below the subsistence level.
Answer: B
Status: NU
10) According to classical growth theory, as capital per hour and technology increase,
A) the population grows and eventually real GDP returns to the subsistence level.
B) the population grows but more slowly than real GDP so that people's incomes are
permanently higher.
C) the pursuit of profit causes further increases in capital per hour and technology and economic
growth continues indefinitely.
D) the growth rate of real GDP per person permanently increases.
E) people save more, which increases the capital per hour even more, and so economic growth
continues indefinitely.
Answer: A
Status: DMC
42
11) Classical growth theory predicts that increases in real GDP per person will
A) not last because higher income leads to a population explosion.
B) last because higher growth leads to new technology.
C) last because people make choices in the pursuit of higher profits.
D) not last because higher income encourages smaller families and a lower population growth
rate.
E) last only if the government directs firms to make more investments in capital and new
technology.
Answer: A
Status: CT
12) Classical growth theory predicts that economic growth

A) will continue at the classical rate of 3 percent forever.
B) will eventually stop because of population growth.
C) occurs because of hard-working citizens.
D) is merely an illusion.
E) decreases the supply of labor.
Answer: B
Status: WM
13) The classical growth theory asserts that

A) economic growth will continue indefinitely.
B) economic growth and population growth complement each other.
C) population growth increases a nation's economic growth.
D) population growth will lead to people earning only a subsistence level of income.
E) population growth leads to more growth in technology.
Answer: D
Status: AA
43
14) In classical growth theory, if the income level is above the subsistence income,
A) the economy will keep growing without limit.
B) population grows and lowers real income to its subsistence level.
C) technological growth occurs and keeps real income above its subsistence level.
D) the pursuit of profit will cause economic growth to accelerate.
E) None of the above is correct because the classical growth theory asserts that income can never
exceed the subsistence level.
Answer: B
Status: TPS
15) According to classical growth theory, economic growth occurs when ________ and
economic growth ________.
A) the population increases; does not last forever
B) technology advances; does not last forever
C) the population increases; lasts forever
D) technology advances; lasts forever
E) labor productivity increases; lasts forever
Answer: B
Status: DMC
16) In the classical growth theory, economic growth leads to increases in labor supply which
________ real GDP and ________ the real wage rate.
A) increases; lowers
B) increases; raises
C) decreases; lowers
D) decreases; raises
E) increases; does not affect
Answer: A
Status: RS
44
17) Classical growth theory predicts
A) a slowdown in population growth over time.
B) real GDP will remain at the subsistence level over time.
C) sustained increases in economic growth in the long run.
D) the population growth rate slows as real GDP per person rises.
E) sustained increases in the standard of living in the long run.
Answer: B
Status: NU
18) Real GDP per person did not remain at the subsistence level, as predicted by classical growth
theory, because as GDP per person increased,
A) birth rates remained constant and death rates fell.
B) birth rates eventually fell.
C) technological advances were able to outpace the effects of the continued and increasingly
high birth rate.
D) the total level of real GDP decreased.
E) death rates eventually increased.
Answer: B
Status: NU
19) Which growth theory predicts that even when technology advances, real GDP per person
always returns to a subsistence level of income?
A) Classical growth theory
B) Sustained growth theory
C) Neoclassical growth theory
D) New growth theory
E) Keynesian growth theory
Answer: A
Status: CT
45
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Glenquhargen. They were all nimble-footed, and the panic with
which they were now actually seized gave wings to their speed, and
rendered a matter of no regard the rocks and other impediments
over which they were flying. Their pursuer was not more speedy, but
much longer winded, and the rage which then impelled him was not
less potent than their terror. He possessed a fund of physical ability
which was almost inexhaustible, and he had sworn not to drop the
pursuit till he had “smashed the hale set,” so that from the length of
the race the poor wights had but a small chance of safety. At length
the top of Glenquhargen, then Cairnkinnow, and next Gowkthorn,
were reached, without any loss or advantage to either party. From
the latter of these places, the ground declines nearly the whole way to
Drumlanrig, and the soldiers, with the start in their favour, flew on
with a glimmering of hope that now they could scarcely be overtaken.
Their hope was realised, but not without such overstraining as had
nearly proved equally fatal with the vengeance from which they fled.
Leaning forward almost to the ground, and staggering like drunkards
from excess of fatigue, they at last reached the western staircase
which leads into the court of the castle. Behind them Glenmannow
rushed on also with abated speed, but with indignation as hot as
ever. He still bore upon his shoulder the ponderous car limb; his face
was literally bathed in perspiration; and the wild expression of his
eyes, and the foam which was beginning to appear at each corner of
his mouth, rendered him a true personification of Giant Madness
broken from his chains.
The two dukes, who had been informed of their approach by some
servants who observed them descending the opposite heights, were
waiting to receive them within the balustrade which runs along that
side of the castle; but on marking the fury of Glenmannow, Duke
James deemed it prudent to retire with the exhausted soldiers until
the storm should be passed; for while his tenant remained in that
mood of mind, he dared not, absolute as was his authority, to come
into his presence. His brother of Buccleuch was therefore left to bear
the first brunt of the salutation, who, on Glenmannow’s approach,
called out, “What is the matter? What is to do?” Glenmannow,
without regarding this interrogatory further than by darting upon
him a wild and fierce look, sprang up stairs, and rushed past him into
the court of the castle. But here his progress was stopped; for among
the several doors which lead from thence to every part of the castle,
he knew not by which his enemies had entered. One, however, was
known to him, and along that passage he rapidly hastened, until he
at length arrived in the kitchen. There he was equally at fault, and
there his pursuit was ended; for the smiles of the sonsy cook, and the
fondlements of the various servants who thronged around him,
succeeded in restoring his mind to a degree of calmness and repose.
The cook eased his shoulder of the car limb, with the intention of
repaying herself for the trouble by using it as fuel; others divested
him of his bonnet; and all, with many words, prevailed upon him at
last to assume a chair. After a moment’s silence, in which he seemed
to be lost in reflection, “Ay, ay,” said he, “I see through a’ this noo. It
has been a trick o’ the juke’s makin’ up.” Then, with a serious air, he
added, “But it was dangerous though; for if I had gotten a haud o’
thae chaps, wha kens what I might hae done!”
The duke, on being informed of this change wrought upon his
tenant, and having learnt from the soldiers the way in which he had
been deprived of his breakfast, ordered him a plentiful refreshment,
and afterwards sent for him into the presence of himself and of
Buccleuch. The breach between them was speedily healed; and
Glenmannow, nothing poorer for his race, returned shortly
afterwards with a servant on horseback, who was dispatched to
convey to headquarters the poor grenadier who had been so roughly
handled in the affray.
Mally, with a humanity and forgiveness which the soldier had little
right to expect, had succeeded in removing him from the spot where
he was cast down, into the house, and having there laid him upon a
bed, tended him with such kindness and care, that, by the time of
Glenmannow’s return, he was so far recovered as to be able to sit
upon the horse sent to remove him. Glenmannow, after Mally had
wrapped round him a pair of blankets, bore him out in his arms, and
placed him behind the servant, who in this manner conducted him in
safety to Drumlanrig.
This is the last exploit of a remarkable kind which I have been able
to glean respecting Glenmannow. He lived to a pretty long age, yet
his life was abridged within its natural period by imprudently taxing
his great strength beyond its actual capability. A high dyke was in the
course of being built, from the heights on the left of the Nith into the
channel of the river, about four miles above Drumlanrig, on the way
to Sanquhar, and in order to resist the force of the current, the
largest stones that could be moved were built into the dyke at its
termination. One in particular, which lay near the place, was deemed
excellently fitted for that purpose, but its weight rendered it
unmanageable. Glenmannow undertook to lift it into its place, and in
reality did so; but in the effort he injured his breast and spine, and
brought on a lingering disorder, of which he died in less than a
twelvemonth afterwards, in the year 1705. I am not aware of his
having left any descendants to perpetuate and spread his name; one
thing at least is certain, that in the present day none such are to be
found in that district which was the principal scene of his exploits,
and where still is cherished to such a degree his singular yet honest
renown.—Traits of Scottish Life, and Pictures of Scenes and
Character.
MY GRANDMOTHER’S PORTRAIT.
By Daniel Gorrie.
In picture galleries, or in private apartments, portraits seldom

receive much attention from visitors, unless they happen to have
known the originals, or to be aware that the pictures are the
productions of distinguished artists. And yet, whether we have
known the originals or not, and apart altogether from the general
artistic merit of the works, there are many portraits which have a
wonderful effect in giving the mind a reflective and inquisitive turn.
Portraits of this description may occasionally be seen in retired
country houses of modest dimensions, where one need scarcely
expect to find specimens of the highest class of art. Faces we may
there observe, silently depending from the walls, on which strongly-
pronounced character is depicted in spite of every artistic defect, and
through the deep lines of which the record of a stirring or painful life
seems to struggle earnestly for utterance. People are too much in the
habit of regarding every person as commonplace and uninteresting
who has not managed somehow to make a noise in the world; but in
these “counterfeit presentments” of men and women who have died
in comparative obscurity, known only to their own circle of friends,
we may see much that strangely moves our hearts, and makes us long
to learn what their history has been.
Let the reader look in fancy on that old portrait hanging before me
there on the wall. To me it is no dead picture, but rather does it seem
the living embodiment of a maternal grandmother—a heroic old
dame, who never lost heart whatever might betide, and of whom that
image is now almost the sole remaining relic. Even a stranger could
scarcely fail to note with curious interest that small round face with
nose and chin attenuated by years—those peering eyes, where a
twinkle of youth yet breaks through the dim of eld—that wrinkled
brow, shaded with a brown frontage-braid of borrowed hair—and
that compact little head, encased in a snow-white cap with its broad
band of black ribbon. The least skilful artist could hardly have failed
in depicting the features; but the old familiar expression is also there,
preserved as in amber, and the aged face is pleasantly blended in my
mind with memories of early days. Detached incidents in her life,
which she was fond of frequently relating to her grandchildren, who
eagerly clustered around her, listening to the oft-told tale, recur to
me with considerable freshness after the lapse of many years.
At the time when that portrait was taken, Mrs Moffat—as I shall
name her—was well-nigh eighty years of age. For about the half of
that period she had led a widowed life. Her husband, who witnessed
many stirring scenes on sea and shore, had been a surgeon in the
Royal Navy, and she was left “passing rich with forty pounds a year”
of government pension.
There was one remarkable incident in his history to which she
frequently recurred. Samuel Moffat obtained an appointment as
surgeon on board the ill-fated Royal George; but before the time set
apart for her leaving port, he found that the smell of the fresh paint
of the new vessel created a feeling of nausea, which would have
rendered him unfit for duty; and by his good fortune in getting
transferred, on this account, to another man-of-war, he escaped the
sad fate that befell so many hapless victims—
When Kempenfelt went down
With twice four hundred men.
A striking incident of this kind naturally made a deep impression on

his own mind, and it also formed a prominent reminiscence in the
memory of his faithful partner during the long remainder of her life.
The earlier period of Mrs Moffat’s widowhood was passed in
Edinburgh; but when death and marriage had scattered her family,
she followed one of her married daughters to the country, and took
up her abode in a neat poplar-shaded cottage on the outskirts of a
quiet village, situated in a fertile and beautiful valley of the county
that lies cradled in the twining arms of the Forth and the Tay. That
cottage, with its garden behind, and pretty flower-borders in front,
and with its row of poplar and rowan-trees, through which the
summer breeze murmured so pleasantly, comes up vividly before my
mind’s eye at this moment. Beautiful as of yore the valley smiles
around, with its girdling ridges belted with woods, and dotted with
pleasant dwellings; and away to westward, shutting in the peaceful
scene from the tumult of the great world, rise the twin Lomond hills,
glorious at morn and eve, when bathed in the beams of the rising and
setting sun. The good old lady, who had spent a large portion of her
life in “Auld Reekie,” when narrow Bristo Street and Potterrow and
the adjoining courts were inhabited by the better class of citizens,
took kindly to the country cottage, and she was fond of the garden
and flowers. With a basket on her arm, she trotted about the garden,
apparently very busy, but doing little after all. In autumn, after a
gusty night, one of her first morning occupations was to gather up
the fallen ruddy apples, which she preserved for the special
gratification of her grandchildren. Many a time and oft were they
debarred from touching the red berries of the rowan-trees, which
look as tempting in children’s eyes as did the forbidden fruit in those
of Mother Eve. The girls were even enjoined not to make necklaces of
these clustering red deceivers.
In that retired village there were, in those days, a good many well-
to-do people, who had not found it very difficult to make money out
of a generous soil. The different families lived on very sociable terms,
and during the winter season there were rounds of tea-parties,
winding up with cold suppers and hot toddy. Teetotalism was a thing
unknown in that district and in those days, though I shall do the
good folks the justice of saying that they knew the virtues of
moderation. To all those winter gatherings of the local gentry, Mrs
Moffat invariably received an invitation. They could not do without
her, relishing as they did her ready wit and hearty good-humour. She
was, in sooth, the life of every party. On such occasions she displayed
all the artless buoyancy of youth, as if she had never endured the
agonies of bereavement, or borne the burdens of life. She was then
the very image of “Old Delight,” and her aged face renewed its youth
in the sunshine of joy. Some of the knowing lairds tried by bantering
and otherwise to draw her out, and her quick cutting repartees were
followed by explosions of mirth. It seemed marvellous that such a
well of sunny mirth should be encased in that tiny frame. Indeed, it
was nothing unusual for the hearty old lady to treat the company to a
“canty” song at these village parties, and touches of melody still
lingered about the cracks of her voice. When bothered overmuch to
sing another song after she had already done enough, she generally
met the request with a solitary stanza to this effect:—
There was a wee mannie an’ a wee wifie,
And they lived in a vinegar bottle;
“And O,” says the wee mannie to the wee wifie,
“Wow, but oor warld is little, is little!
Wow, but oor warld is little!”
Rare encounters of wit and amusing banter occasionally took place

between her and a strange eccentric humorist of a lawyer of the old
school, who frequently visited the village from a neighbouring
country town. Old Bonthron was the name by which he was
familiarly known.
It may readily be imagined that, when old Mr Bonthron and Mrs
Moffat met in the same company, the fun would grow “fast and
furious,” and such certainly was the case. I have seen the hearty old
humorist take the equally hearty old lady on his knee, and dandle her
there like a child, greatly to their own delight and to the infinite
amusement of the company. There will be less genial and boisterous
mirth now-a-days, I should imagine, in that sequestered village.
Such was Mrs Moffat in her lightsome hours, when friends met
friends; but her grandchildren were as much delighted with her
when, in graver mood, she recalled early recollections, told them
pleasant little stories, and narrated graphically what to her were
eventful incidents in her life.
I can still remember some of the pleasant pictures she gave us of
her early days. She was born in the town of Dalkeith, which is
beautiful for situation, being planted in the midst of the richest
woodland scenery, and she imprinted in our hearts vivid impressions
of the delighted feelings with which, in the days of her girlhood, she
looked through the gate of the Duke’s great park, and saw the long
winding avenue and the greensward traversed by nibbling sheep, and
the magnificent trees whose “shadowing shroud” might cover a
goodly company at their rural feast in the noontide of a summer’s
day. She described the rustic seats and summer-houses on the banks
of a brook, that wandered at its own sweet will through the wooded
grounds—regions and resorts of joyance, where the children of the
town, through the kindness of the then reigning Duke of Buccleuch,
were permitted to spend the livelong summer’s day, thus enabling
them to store their memories with pleasing recollections, which
might come back upon them in their declining days, like visions of
beauty from lands of old romance. There was a pathetic story about a
family of larks that had their nest in the Duke’s Park, which she
recited to us over and over again, by way of inculcating the virtue of
treating kindly all the creatures of God. Her story was, that some of
the young rascals of Dalkeith had caught the mother-bird in the nest,
and had carried off her and the whole family of young ones at one fell
swoop. The male bird, thus deprived at once of mate and family, took
up his melancholy station near the nest, and mourned his loss with
plaintive pipe for two days, at the end of which time the broken-
hearted warbler died. This affecting incident, told with much
seriousness and feeling, was not unproductive of good effect upon
the young listeners. Cities and towns being still to us mysteries of
which we had only a vague conception, it pleased us much to hear
her tell how the bells of Dalkeith tolled children to bed, and how little
boys walked through the streets at night, calling “Hot pies for
supper!” It struck us that at whatever hour the bell tolled, we should
have liked to remain out of bed till the pies went round.
On winter evenings, beside the good old lady’s cottage fire, she was
often constrained to recount her famous voyage to London, in which
she wellnigh suffered shipwreck. The war-vessel on board of which
her husband acted as surgeon had arrived in the Thames. He could
not then obtain leave of absence, and as they had not met for many
long months, she determined—protracted as the passage then was
from Leith to London—to make an effort to see her husband, and to
visit the great metropolis. Steamers had not, at that period, come
into existence, and the clipper-smacks that traded between Leith and
London, and took a few venturesome passengers on their trips,
dodged along the Scotch and English coasts for days and weeks, thus
making a lengthened voyage of what is now a brief and pleasant sail.
It was considered a bold and hazardous undertaking, in those days,
for any lady to proceed alone on such a voyage. This, however, she
did, as she was gifted with a wonderful amount of pluck, leaving her
family in the charge of some friends till she returned.
The vessel had scarcely left the Firth of Forth, and got out into the
open sea, when the weather underwent a bad turn, and soon they
had to encounter all the fury of a severe storm, which caused many
shipwrecks along the whole eastern seaboard. With a kind of placid
contentment—nay, even with occasional glee—would she describe
the protracted miseries and hardships they endured, having run
short of supplies, and every hour expecting the vessel to founder. It
was three weeks after leaving Leith until the smack was, as she
described it, towed up the Thames like a dead dog, without either
mast or bowsprit—a hapless and helpless hulk. However, she
managed to see her husband, and the happiness of the meeting
would be considered a good equivalent for the mishaps of the voyage.
She saw, in the great metropolis, the then Prince of Wales—the “First
Gentleman in Europe,” and used to relate, with considerable gusto
(old ladies being more rough-and-ready then than now), how the
Prince, as he was riding in St James’s Park, overheard a hussar in the
crowd exclaiming, “He’s a d——d handsome fellow!” and
immediately lifting his hat, his Royal Highness replied, “Thank you,
my lad; but you put too much spice in your compliments!” That
London expedition was a red-letter leaf in Mrs Moffat’s biography,
and it was well thumbed by us juveniles. Her return voyage was
comparatively comfortable, and much more rapid; but she never saw
her husband again, as he died at sea, and was consigned to the deep.
Even more interesting than the London trip were all the stories
and incidents connected with her only son—our uncle who ought to
have been, but who was dead before any of us were born. Through
the kindness and influence of Admiral Greig of the Russian navy, he
obtained a commission in the Russian service at an unusually early
age—Russia and Britain being at that time in close alliance. Neither
the Russian navy nor army was in the best condition, and the
Emperor was very desirous to obtain the services of British officers,
Scotsmen being preferred. Mrs Moffat loved her son with all the
warmth of her kindly nature, and when he had been about a year or
two in the Russian service, the news spread through Edinburgh one
day, that a Russian man-of-war was coming up the Firth to Leith
roads. I have heard the good lady relate the eventful incidents of that
day with glistening eyes and tremulous voice.
The tidings were conveyed to her by friends who knew that she had
some reason to be interested in the news. She had received no
communication from her son for some time, as the mails were then
very irregular, and letters often went amissing; and, filled with the
hope that he might be on board the Russian vessel that was
approaching the roads, she immediately hurried off for Leith,
whither crowds of people were already repairing, as a Russian war-
vessel in the Forth was as great a rarity then as it is now. Before she
arrived at the pier, the vessel had anchored in the roads, and the
pier, neither so long nor so commodious as it is now, was thronged
with people pressing onwards to get a sight of the stranger ship.
Nothing daunted by the crowd, Mrs Moffat squeezed herself forward,
at the imminent risk of being seriously crushed. A gentleman who
occupied a “coigne of vantage,” out of the stream of the crowd,
observed this slight-looking lady pressing forward with great
eagerness. He immediately hailed her, and asked, as she appeared
very much interested, if she expected any one, or had any friends on
board. She replied that she half expected her son to be with the
vessel. The gentleman, who was to her a total stranger, but who must
have been a gentleman every inch, immediately took her under his
protection, and having a telescope in his hand, he made
observations, and reported progress.
One of the ship’s boats had been let down, and he told her that he
observed officers in white uniform rapidly descending. Mrs Moffat’s
eagerness and anxiety were now on the increase. The boat put off
from the ship, propelled by sturdy and regular strokes, cutting the
water into foam, which sparkled in the sunshine. When the boat had
approached midway between the ship and the shore, Mrs Moffat
asked her protector if he could distinguish one officer apparently
younger than the others.
“Yes,” he replied; “there is one who seems scarcely to have passed
from boyhood to manhood.”
Her eager impatience, with hope and fear alternating in her heart,
seemed now to agitate her whole frame, and the bystanders, seeing
her anxiety, appeared also to share in her interest.
At last the boat, well filled with officers, shot alongside the pier,
the crowd rushing and cheering, as it sped onward to the upper
landing-place. It was with great difficulty that the gentleman could
restrain the anxious mother from dashing into the rushing stream of
people. When the crowd had thinned off a little, they made their way
up the pier, and found that the officers had all left the boat and gone
into the Old Ship Inn—probably because they had no desire of being
mobbed. Mrs Moffat immediately went to the inn, and requested an
attendant to ask if one of the officers belonged to Scotland, and if so,
to be good enough to mention his name.
“Yes—Moffat!” was the cheery response, and in a short time
mother and son were locked in each other’s arms in the doorway of
the Old Ship.
With a glee, not unmingled with tender regrets, she used to tell
how, when she and the spruce young officer were proceeding up
Leith Walk together to Edinburgh, an old woman stopped them, and,
clapping him kindly on the shoulder, said—“Ay, my mannie, ye’ll be a
captain yet!” This prophecy of the old woman certainly met its
fulfilment.
After staying a few days in the old home near the Meadows, young
Moffat again took his departure, never more to see his affectionate
mother, or the bald crown of Arthur Seat rising by the side of the
familiar Firth. He joined the army (changes of officers from the navy
to the army being then frequent in the Russian service), and
reenacted his part honourably in many memorable scenes. Still do I
remember the tender and tearful care with which his old mother
opened up the yellow letters, with their faded ink-tracings, which
contained descriptions of the part he played in harassing the French,
during their disastrous retreat after the burning of Moscow. One of
these letters, I recollect, commenced thus—“Here we are, driving the
French before us like a flock of sheep;” and in others he gave painful
descriptions of their coming up to small parties of French soldiers
who were literally glued by the extreme frost to the ground—quite
stiff and dead, but still in a standing attitude, and leaning on their
muskets. Poor wretches! that was their sole reward for helping to
whet the appetite of an insatiable ambition. In those warlike times,
young Moffat grew into favour, and gained promotion. He received a
gold-hilted sword from the Emperor for distinguished service, but he
succumbed to fatigue, and died on foreign soil. The gold-headed
sword and his epaulets, which he had bequeathed to a favourite
sister, fell into the hands of harpies in London, and to this day have
never reached Scotland.
In the quiet village Mrs Moffat spent her declining days in peace
and sweet content, and she now sleeps in the village churchyard, till
the last spring that visits the world shall waken inanimate dust to
immortal life.
THE BAPTISM.
By Professor Wilson.
It is a pleasant and impressive time, when, at the close of divine

service, in some small country church, there takes place the gentle
stir and preparation for a baptism. A sudden air of cheerfulness
spreads over the whole congregation; the more solemn expression of
all countenances fades away; and it is at once felt that a rite is about
to be performed which, although of a sacred and awful kind, is yet
connected with a thousand delightful associations of purity, beauty,
and innocence. Then there is an eager bending of smiling faces over
the humble galleries—an unconscious rising up in affectionate
curiosity—and a slight murmuring sound, in which is no violation of
the Sabbath sanctity of God’s house, when, in the middle passage of
the church, the party of women is seen, matrons and maids, who
bear in their bosoms, or in their arms, the helpless beings about to be
made members of the Christian communion.
There sit, all dressed becomingly in white, the fond and happy
baptismal group. The babies have been intrusted, for a precious
hour, to the bosoms of young maidens, who tenderly fold them to
their yearning hearts, and with endearments taught by nature, are
stilling, not always successfully, their plaintive cries. Then the proud
and delighted girls rise up, one after the other, in sight of the whole
congregation, and hold up the infants, arrayed in neat caps and long
flowing linen, into their fathers’ hands. For the poorest of the poor, if
he has a heart at all, will have his infant well dressed on such a day,
even although it should scant his meal for weeks to come, and force
him to spare fuel to his winter fire.
And now the fathers were all standing below the pulpit, with grave
and thoughtful faces. Each has tenderly taken his infant into his toil-
hardened hands, and supports it in gentle and steadfast affection.
They are all the children of poverty, and if they live, are destined to a
life of toil. But now poverty puts on its most pleasant aspect, for it is
beheld standing before the altar of religion with contentment and
faith. This is a time when the better and deeper nature of every man
must rise up within him, and when he must feel, more especially,
that he is a spiritual and immortal being making covenant with God.
He is about to take upon himself a holy charge; to promise to look
after his child’s immortal soul; and to keep its little feet from the
paths of evil, and in those of innocence and peace. Such a thought
elevates the lowest mind above itself, diffuses additional tenderness
over the domestic relations, and makes them who hold up their
infants to the baptismal font, better fathers, husbands, and sons, by
the deeper insight which they then possess into their nature and
their life.
The minister consecrates the water; and, as it falls on his infant’s
face, the father feels the great oath in his soul. As the poor helpless
creature is wailing in his arms, he thinks how needful indeed to
human infancy is the love of Providence! And when, after delivering
each his child into the arms of the smiling maiden from whom he
had received it, he again takes his place for admonition and advice
before the pulpit, his mind is well disposed to think on the perfect
beauty of that religion of which the Divine Founder said, “Suffer little
children to be brought unto me, for of such is the kingdom of
heaven!”
The rite of baptism had not thus been performed for several
months in the kirk of Lanark. It was now the hottest time of
persecution; and the inhabitants of that parish found other places in
which to worship God and celebrate the ordinances of religion. It was
now the Sabbath-day, and a small congregation of about a hundred
souls had met for divine service in a place of worship more
magnificent than any temple that human hands had ever built to
Deity. Here, too, were three children about to be baptised. The
congregation had not assembled to the toll of the bell, but each heart
knew the hour and observed it; for there are a hundred sun-dials
among the hills, woods, moors, and fields, and the shepherd and the
peasant see the hours passing by them in sunshine and shadow.
The church in which they were assembled was hewn by God’s hand
out of the eternal rocks. A river rolled its way through a mighty
chasm of cliffs, several hundred feet high, of which the one side
presented enormous masses, and the other corresponding recesses,
as if the great stone girdle had been rent by a convulsion. The
channel was overspread with prodigious fragments of rock or large
loose stones, some of them smooth and bare, others containing soil
and verdure in their rents and fissures, and here and there crowned
with shrubs and trees. The eye could at once command a long
stretching vista, seemingly closed and shut up at both extremities by
the coalescing cliffs. This majestic reach of river contained pools,
streams, rushing shelves, and waterfalls innumerable; and when the
water was low, which it now was in the common drought, it was easy
to walk up this scene, with the calm blue sky overhead, an utter and
sublime solitude. On looking up, the soul was bowed down by the
feeling of that prodigious height of unscaleable and often
overhanging cliff. Between the channel and the summit of the far-
extended precipices were perpetually flying rooks and wood-pigeons,
and now and then a hawk, filling the profound abyss with their wild
cawing, deep murmur, or shrilly shriek. Sometimes a heron would
stand erect and still on some little stone island, or rise up like a white
cloud along the black wall of the chasm and disappear. Winged
creatures alone could inhabit this region. The fox and wild-cat chose
more accessible haunts. Yet there came the persecuted Christians
and worshipped God, whose hand hung over their heads those
magnificent pillars and arches, scooped out those galleries from the
solid rock, and laid at their feet the calm water in its transparent
beauty, in which they could see themselves sitting in reflected
groups, with their Bibles in their hands.
Here, upon a semicircular ledge of rocks, over a narrow chasm, of
which the tiny stream played in a murmuring waterfall, and divided
the congregation into two equal parts, sat about a hundred persons,
all devoutly listening to their minister, who stood before them on
what might well be called a small natural pulpit of living stone. Up to
it there led a short flight of steps, and over it waved the canopy of a
tall graceful birch-tree. This pulpit stood in the middle of the
channel, directly facing that congregation, and separated from them
by the clear deep sparkling pool into which the scarce-heard water
poured over the blackened rock. The water, as it left the pool,
separated into two streams, and flowed on each side of that altar,
thus placing it on an island, whose large mossy stones were richly
embowered under the golden blossoms and green tresses of the
broom. Divine service was closed, and a row of maidens, all clothed
in purest white, came gliding off from the congregation, and crossing
the stream on some stepping-stones, arranged themselves at the foot
of the pulpit, with the infants about to be baptized. The fathers of the
infants, just as if they had been in their own kirk, had been sitting
there during worship, and now stood up before the minister. The
baptismal water, taken from the pellucid pool, was lying consecrated
in a small hollow of one of the upright stones that formed one side or
pillar of the pulpit, and the holy rite proceeded. Some of the younger
ones in that semicircle kept gazing down into the pool, in which the
whole scene was reflected, and now and then, in spite of the grave
looks or admonishing whispers of their elders, letting a pebble fall
into the water, that they might judge of its depth from the length of
time that elapsed before the clear air-bells lay sparkling on the
agitated surface. The rite was over, and the religious services of the
day closed by a psalm. The mighty rocks hemmed in the holy sound,
and sent it in a more compacted volume, clear, sweet, and strong, up
to heaven. When the psalm ceased, an echo, like a spirit’s voice, was
heard dying away up among the magnificent architecture of the cliffs,
and once more might be noticed in the silence the reviving voice of
the waterfall.
Just then a large stone fell from the top of the cliff into the pool, a
loud voice was heard, and a plaid hung over on the point of a
shepherd’s staff. Their watchful sentinel had descried danger, and
this was his warning. Forthwith the congregation rose. There were
paths dangerous to unpractised feet, along the ledges of the rocks,
leading up to several caves and places of concealment. The more
active and young assisted the elder—more especially the old pastor,
and the women with the infants; and many minutes had not elapsed,
till not a living creature was visible in the channel of the stream, but
all of them hidden, or nearly so, in the clefts and caverns.
The shepherd who had given the alarm had lain down again in his
plaid instantly on the greensward upon the summit of these
precipices. A party of soldiers were immediately upon him, and
demanded what signals he had been making, and to whom; when
one of them, looking over the edge of the cliff, exclaimed, “See, see,
Humphrey! we have caught the whole tabernacle of the Lord in a net
at last. There they are, praising God among the stones of the river
Mouss. These are the Cartland Craigs. By my soul’s salvation, a noble
cathedral!” “Fling the lying sentinel over the cliffs. Here is a canting
Covenanter for you, deceiving honest soldiers on the very Sabbath-
day. Over with him, over with him—out of the gallery into the pit.”
But the shepherd had vanished like a shadow; and, mixing with the
tall green broom and brushes, was making his unseen way towards
the wood. “Satan has saved his servant. But come, my lads, follow
me; I know the way down into the bed of the stream, and the steps
up to Wallace’s Cave. They are called the ‘Kittle Nine Stanes.’ The
hunt’s up—we’ll be all in at the death. Halloo, my boys, halloo!”
The soldiers dashed down a less precipitous part of the wooded
banks, a little below the “Craigs,” and hurried up the channel. But
when they reached the altar where the old grayhaired minister had
been seen standing, and the rocks that had been covered with people,
all was silent and solitary—not a creature to be seen.
“Here is a Bible dropped by some of them,” cried a soldier; and
with his foot spun it away into the pool.
“A bonnet! a bonnet!” cried another. “Now for the pretty sanctified
face that rolled its demure eyes below it.”
But after a few jests and oaths the soldiers stood still, eyeing with a
kind of mysterious dread the black and silent walls of the rock that
hemmed them in, and hearing only the small voice of the stream that
sent a profounder stillness through the heart of that majestic
solitude. “Curse these cowardly Covenanters! What if they tumble
down upon our heads pieces of rock from their hiding-places?
Advance? Or retreat?”
There was no reply; for a slight fear was upon every man. Musket
or bayonet could be of little use to men obliged to clamber up rocks,
along slender paths, leading they knew not where; and they were
aware that armed men now-a-days worshipped God,—men of iron
hearts, who feared not the glitter of the soldier’s arms, neither barrel
nor bayonet; men of long stride, firm step, and broad breast, who, on
the open field, would have overthrown the marshalled line, and gone
first and foremost if a city had to be taken by storm.
As the soldiers were standing together irresolute, a noise came
upon their ears like distant thunder, but even more appalling; and a
slight current of air, as if propelled by it, passed whispering along the
sweetbriers and the broom, and the tresses of the birch-trees. It came
deepening and rolling, and roaring on, and the very Cartland Craigs
shook to their foundation as if in an earthquake. “The Lord have
mercy upon us!—what is this?” And down fell many of the miserable
wretches on their knees, and some on their faces, upon the sharp-
pointed rocks. Now it was like the sound of many myriad chariots
rolling on their iron axles down the stony channel of the torrent. The
old grayhaired minister issued from the mouth of Wallace’s Cave,
and said, with a loud voice, “The Lord God terrible reigneth!” A
waterspout had burst up among the moorlands, and the river, in its
power, was at hand. There it came—tumbling along into that long
reach of cliffs, and in a moment filled it with one mass of waves.
Huge agitated clouds of foam rode on the surface of a blood-red
torrent. An army must have been swept off by that flood. The soldiers
perished in a moment; but high up in the cliffs, above the sweep of
destruction, were the Covenanters—men, women, and children,
uttering prayers to God, unheard by themselves in that raging
thunder.
THE LAIRD’S WOOING.
By John Galt.
The laird began the record of his eighteenth year in these words:—
There lived at this time, on the farmstead of Broomlands, a person
that was a woman, by calling a widow; and she and her husband,
when he was in this life, had atween them Annie Daisie, a dochter;—
very fair she was to look upon, comely withal, and of a feleecity o’
nature.
This pretty Annie Daisie, I know not hoo, found favour in my eyes,
and I made no scruple of going to the kirk every Sabbath day to see
her, though Mr Glebeantiends was, to a certainty, a vera maksleepie
preacher. When I forgathered with her by accident, I was all in a
confusion; and when I would hae spoken to her wi’ kindly words, I
could but look in her clear een and nicher like Willie Gouk, the
haverel laddie; the which made her jeer me as if I had a want, and
been daft likewise; so that seeing I cam no speed in courting for
myself, I thocht o’ telling my mother; but that was a kittle job,—
howsoever, I took heart, and said—
“Mother!”
“Well, son,” she made answer, “what would ye?”
“I’m going to be marriet,” quo’ I.
“Marriet!” cried she, spreading out her arms wi’ consternation.
“And wha’s the bride?”
I didna like just to gie her an even down answer, but said I thought
myself old enough for a helpmeet to my table, which caused her to
respond with a laugh; whereupon I told her I was thinking of Annie
Daisie.
“Ye’ll surely ne’er marry the like o’ her;—she’s only a gair’ner’s
dochter.”
But I thocht of Adam and Eve, and said—“We’re a’ come of a
gair’ner;”—the which caused her presently to wax vera wroth with
me; and she stampit with her foot, and called me a blot on the
‘scutcheon o’ Auldbiggins; then she sat down, and began to reflec’
with herself; and, after a season, she spoke rawtional about the
connection, saying she had a wife in her mind for me, far more to the
purpose than such a causey-dancer as Annie Daisie.
But I couldna bide to hear Annie Daisie mislikened, and yet I was
feart to commit the sin of disobedience, for my mother had no mercy
when she thought I rebelled against her authority; so I sat down, and
was in a tribulation, and then I speir’t, with a flutter of affliction, who
it was that she had willed to be my wife.
“Miss Betty Græme,” said she; “if she can be persuaded to tak sic a
headowit.”
Now this Miss Betty Græme was the tocherless sixth daughter o’ a
broken Glasgow provost, and made her leevin’ by seamstress-work
and flowering lawn; but she was come of gentle blood, and was
herself a gentle creature, though no sae blithe as bonnie Annie
Daisie; and for that I told my mother I would never take her, though
it should be the death o’ me. Accordingly I ran out of the house, and
took to the hills, and wistna where I was, till I found myself at the
door of the Broomlands, with Annie Daisie before me, singing like a
laverock as she watered the yarn of her ain spinning on the green. On
seeing me, however, she stoppit, and cried—
“Gude keep us a’, laird!—what’s frightened you to flee hither?”
But I was desperate, and I ran till her, and fell on my knees in a
lover-like fashion; but wha would hae thocht it?—she dang me ower
on my back, and as I lay on the ground she watered me with her
watering-can, and was like to dee wi’ laughing: the which sign and
manifestation of hatred on her part quenched the low o’ love on
mine; an’ I raise an’ went hame, drookit and dripping as I was, and
told my mother I would be an obedient and dutiful son.
Soon after this, Annie Daisie was marriet to John Lounlans; and
there was a fulsome phrasing about them when they were kirkit, as
the comeliest couple in the parish. It was castor-oil to hear’t; and I

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Foundations of Macroeconomics 5th

Edition Bade Test Bank

9.1 The Basics of Economic Growth

1) Economic growth is defined as

2) Economic growth is a sustained expansion of production possibilities, as measured by the

3) A country will likely experience an increase in poverty if

5) Which of the following variables is used to determine a country's economic growth?

6) The growth rate of real GDP is measured by the following formula:

20) Growth in the standard of living is measured by the increase in

59) Economic growth is a sustained expansion of production possibilities measured as the

60) The economic growth rate is expressed as the ________.

63) The standard of living is measured by

9.2 The Sources of Economic Growth

2) Aggregate hours show a sustained increase only as a result of

8) Labor productivity is defined as

10) Labor productivity is equal to the quantity of

13) Sustained increases in real GDP per person depend on

14) An increase in labor productivity

20) Labor productivity growth depends on

26) Which of the following are required for economic growth?

28) Human capital refers to the

29) Human capital is defined as the

31) Expansion of a nation's human capital can be achieved through

32) Human capital is acquired

34) ________ increases with education, training, and job experience.

35) Language, writing, and mathematics are examples of

37) U.S. labor productivity slowed during the 1970s because of

40) Labor productivity equals

41) Real GDP equals aggregate hours

46) Human capital is

9.3 Theories of Economic Growth

3) The Malthusian theory

4) A key element of the classical growth theory is that

12) Classical growth theory predicts that economic growth

13) The classical growth theory asserts that

In picture galleries, or in private apartments, portraits seldom

A striking incident of this kind naturally made a deep impression on

Rare encounters of wit and amusing banter occasionally took place

It is a pleasant and impressive time, when, at the close of divine

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