Avatto > CFA Level 1 > PRACTICE QUESTIONS > Economics > Economics Section 1

Economics MCQ - Economics Section 1

66 The growth of the economy will least likely be affected by:

A
the workforce attending an average of 50 hours of training per year.
B
an increase in the labor force that is offset by a decrease in the average hours worked per worker, making the total hours worked unchanged.
C
when capital depreciation exceeds gross investment within the economy.

The total hours worked remains unchanged so the growth of the economy will not change.

67 Which of the following is the most practical approach to estimate sustainable growth rate?

Output growth is equal to the growth rate of labor force plus the growth rate of labor productivity i.e. output per worker. Unlike total factor productivity, output per worker is observable, so this is the most practical way to approach estimation of sustainable growth rate.

68 Which of the following can least likely be measured directly?

Labor and capital productivity can be measured directly.

69 Consider the following Solow growth accounting equation: Potential output growth = 2.0 + 0.8 * Growth of Labor + 0.3 * Growth of capital The intercept (2.0) in this equation is best interpreted as:

The intercept is the growth rate of total factor productivity

70 Consider the following Solow growth accounting equation: Potential output growth = 2.0 + 0.8 * Growth of Labor + 0.3 * Growth of capital The coefficient on the growth rate of labor (0.8) in this equation is best interpreted as:

In the standard Solow growth accounting equation, the coefficient on each factor’s growth rate is its share of income.

Your Progress

0%

Start Practising!

You've answered 0 of 75 questions in this topic.

Practice Spotlight

Build momentum in Economics Section 1

Start with a short question set, review every explanation, and revisit difficult questions before moving ahead.

Day 8 / 10

Global Spotlight

Challenge Your Accuracy

Strong work at 0% accuracy. Attempt the hardest Economics Section 1 questions and explain why every incorrect option is wrong.

Day 1 / 10

Question Spotlight

Question:

Because of a sharp increase in real estate values, the household sector has decreased the fraction of disposable income that it saves. If output and investment spending remain…

A. A decrease in net exports and increased capital inflow.
B. A decrease in net exports and decreased capital outflow.
C. An increase in net exports and decreased capital outflow.

Correct answer: B

Explanation:

The fundamental relationship between saving, investment, the fiscal balance, and the trade balance is S = I + (G – T) + (X – M). Given the levels…

Click to view the complete question details

Day 8 / 10 Open this question

Community Insight

Based on 141 saved attempts

Most Attempted TopicEconomics Section 2
Most Challenging TopicEconomics Section 1
Average Accuracy99%

Featured Question

(Based on recent community answers)

Q. #222190% Incorrect

Under perfect competition, what will a firm least likely earn in the long run?

Try This Question →

This Week's Challenge

Complete 20 questions and set the community benchmark!

0 / 20 Start Challenge →

Why Practice with Avatto?

High Quality MCQsExam-focused questions with accurate answers

Detailed ExplanationsStep-by-step explanations to enhance learning

Latest Exam PatternBased on updated syllabus and pattern

Performance AnalyticsTrack performance and improve weak areas

100% Free PracticePractice unlimited questions for free

Forgot your password?

I agree with the Terms.