An outward shift of the production possibilities curve demonstrates A. an increased rate of inflation. B. a cyclical shock. C. a recession. D. economic growth. Labor productivity is commonly measured as A. real GDP divided by number of workers. B. the change in real GDP divided by change in number of workers. C. nominal GDP divided by number of workers. D. the number of workers divided by real GDP. A higher rate of saving should lead to A. a higher price level and reduced future consumption. B. more investment, capital growth, and future consumption. C. higher current consumption. D. less growth. An important foundation of the new growth theory is that A. we will get more technological advances the more the government is involved. B. the growth rate of the capital stock is more important than the growth rate of new knowledge in generating economic growth. C. improvements in labor productivity are poor measures of technological growth. D. we will get more technological advances when the rewards for producing them are greater. A government protection for an inventor that provides the inventor with the right to make use of her invention in any way she desires is A. an innovation. B. a patent. C. a copyright. D. a trademark. According to economist Julian Simon, A. legal immigrants have a favorable impact on the welfare of American citizens, but illegal immigrants have a negative impact. However, the positive effect of the legal immigrants is stronger than the negative impact of the illegal immigrants. B. legal and illegal immigrants have a positive effect on the welfare of American citizens. C. legal immigrants have a favorable impact on the welfare of American citizens, but illegal immigrants have a negative impact that almost exactly offsets the positive effect of the legal immigrants. D. legal and illegal immigrants have a negative effect on the welfare of American citizens. A system of private property rights A. retards economic growth by limiting the options of people who own nothing. B. enhances economic growth by inducing people to make capital investments today. C. enhances economic growth by creating incentives for the government to sell its assets. D. retards economic growth by serving the interests of the wealthy only. The three stages of economic development include A. the agriculture stage, the manufacturing stage, and the socialist stage. B. the computerized stage, the agriculture stage, and the manufacturing stage. C. the agriculture stage, the manufacturing stage, and the service sector stage. D. the feudal stage, the agriculture stage, and the totalitarian stage. Which of the following do development economists NOT recommend to nations seeking to increase their rates of economic growth? A. promoting private property rights B. letting creative destruction run its course C. promoting increased education D. protecting home producers from international competition