Reading Comprehension_passage On Growth And Development

8 Questions | Total Attempts: 167

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  • 1. 
    Directions (Q. 1 – 8): The passage given below is followed by a set of eight questions. Choose the most appropriate answer to each question. The importance of a decline in productivity growth of both labor and capital derives from the fact that they are practically the only sources of growth in a country’s material well-being. Without growth in productivity, money income may increase but real income will not. The growth of labor productivity is critically dependent on technology, and the same is true for capital productivity. At least conceptually, the only time capital productivity can grow is when the efficiency of new capital goods (plant and equipment) grows faster than the prices of these goods, and this can happen only when the economic value of resource-saving technological innovations embodied in new capital goods exceeds the cost of innovations. For 20 years following the Second World War the United States maintained about the same rate of labor productivity growth as the average of the preceding 80 years: 2.4 to 2.5 percent per year. Between 1965 and 1971, however, the growth rate slipped to about one-half of this long term average. From 1965 through 1973, the growth rate averaged 1.7 percent per year, or 30 percent less then the preceding long term average. The decline in the growth of labor productivity was paralleled by a dramatic decline in the growth of capital productivity. Most economists argue that the decline is strictly cyclical. They assert that the long-term rate will resume once the growth in total output resumes its “normal” path. The slowdown, however, contains a substantial long-term element, one that is not automatically reversible. The most persuasive prima facie observation favouring such irreversibility is the fact that no previous slowdown in the growth of labour productivity in United States history has been greater than 20 percent of the long-term average. Further, the United States gained economic pre-eminence around 1950 largely because its labour productivity growth in the preceding 80 years was 0.09 percent higher than the average- a broad continuation of essentially the same rate between 1950 and 1965, however, produced a decline in the position of the United States in relation to other countries because the other countries more than tripled their rates of productivity growth. These trends have tremendous implications for the country’s future growth its relative economic and political position in the world, and its reaction to future inflationary pressures. The decline in capital productivity implies that the growing shortages of investable funds and the continuing rise in interest rates are not short-term phenomena. Rather, they are the result of long-term forces at work in the economy, the principal one of which is the decline in technological advance relative to both past performance in the United States and current performance in other countries. The only way to reverse these trends is to reverse the decline in the rate of technological advance. Question: When the author uses the phrase “At least conceptually” (line 8-9), he implies that
    • A. 

      The retail prices of capital goods are not directly related to the cost of producing the goods

    • B. 

      Technological innovations are only partially responsible for reductions in the cost of capital goods

    • C. 

      The efficiency of producing capital goods does not determine the cost of capital goods

    • D. 

      The actual growth of capital productivity may not always follow theoretical models

  • 2. 
    Passage: The importance of a decline in productivity growth of both labor and capital derives from the fact that they are practically the only sources of growth in a country’s material well-being. Without growth in productivity, money income may increase but real income will not. The growth of labor productivity is critically dependent on technology, and the same is true for capital productivity. At least conceptually, the only time capital productivity can grow is when the efficiency of new capital goods (plant and equipment) grows faster than the prices of these goods, and this can happen only when the economic value of resource-saving technological innovations embodied in new capital goods exceeds the cost of innovations. For 20 years following the Second World War the United States maintained about the same rate of labor productivity growth as the average of the preceding 80 years: 2.4 to 2.5 percent per year. Between 1965 and 1971, however, the growth rate slipped to about one-half of this long term average. From 1965 through 1973, the growth rate averaged 1.7 percent per year, or 30 percent less then the preceding long term average. The decline in the growth of labor productivity was paralleled by a dramatic decline in the growth of capital productivity. Most economists argue that the decline is strictly cyclical. They assert that the long-term rate will resume once the growth in total output resumes its “normal” path. The slowdown, however, contains a substantial long-term element, one that is not automatically reversible. The most persuasive prima facie observation favouring such irreversibility is the fact that no previous slowdown in the growth of labour productivity in United States history has been greater than 20 percent of the long-term average. Further, the United States gained economic pre-eminence around 1950 largely because its labour productivity growth in the preceding 80 years was 0.09 percent higher than the average- a broad continuation of essentially the same rate between 1950 and 1965, however, produced a decline in the position of the United States in relation to other countries because the other countries more than tripled their rates of productivity growth. These trends have tremendous implications for the country’s future growth its relative economic and political position in the world, and its reaction to future inflationary pressures. The decline in capital productivity implies that the growing shortages of investable funds and the continuing rise in interest rates are not short-term phenomena. Rather, they are the result of long-term forces at work in the economy, the principal one of which is the decline in technological advance relative to both past performance in the United States and current performance in other countries. The only way to reverse these trends is to reverse the decline in the rate of technological advance. Question: According to the passage, when technological development lags, which of the following is true?
    • A. 

      Real income increases

    • B. 

      Productivity growth declines

    • C. 

      Capital requirements stabilize

    • D. 

      Investable funds are unaffected

  • 3. 
    Passage: The importance of a decline in productivity growth of both labor and capital derives from the fact that they are practically the only sources of growth in a country’s material well-being. Without growth in productivity, money income may increase but real income will not. The growth of labor productivity is critically dependent on technology, and the same is true for capital productivity. At least conceptually, the only time capital productivity can grow is when the efficiency of new capital goods (plant and equipment) grows faster than the prices of these goods, and this can happen only when the economic value of resource-saving technological innovations embodied in new capital goods exceeds the cost of innovations. For 20 years following the Second World War the United States maintained about the same rate of labor productivity growth as the average of the preceding 80 years: 2.4 to 2.5 percent per year. Between 1965 and 1971, however, the growth rate slipped to about one-half of this long term average. From 1965 through 1973, the growth rate averaged 1.7 percent per year, or 30 percent less then the preceding long term average. The decline in the growth of labor productivity was paralleled by a dramatic decline in the growth of capital productivity. Most economists argue that the decline is strictly cyclical. They assert that the long-term rate will resume once the growth in total output resumes its “normal” path. The slowdown, however, contains a substantial long-term element, one that is not automatically reversible. The most persuasive prima facie observation favouring such irreversibility is the fact that no previous slowdown in the growth of labour productivity in United States history has been greater than 20 percent of the long-term average. Further, the United States gained economic pre-eminence around 1950 largely because its labour productivity growth in the preceding 80 years was 0.09 percent higher than the average- a broad continuation of essentially the same rate between 1950 and 1965, however, produced a decline in the position of the United States in relation to other countries because the other countries more than tripled their rates of productivity growth. These trends have tremendous implications for the country’s future growth its relative economic and political position in the world, and its reaction to future inflationary pressures. The decline in capital productivity implies that the growing shortages of investable funds and the continuing rise in interest rates are not short-term phenomena. Rather, they are the result of long-term forces at work in the economy, the principal one of which is the decline in technological advance relative to both past performance in the United States and current performance in other countries. The only way to reverse these trends is to reverse the decline in the rate of technological advance. Question: It can be inferred that for the years 1972 and 1973 the average growth rate of labour productivity was
    • A. 

      Equal to the average for 1965-1971

    • B. 

      Equal to the average for the years 1865 through 1945

    • C. 

      Higher than the average for the years 1965 through 1971

    • D. 

      Higher than the average for the years 1965 through 1971

  • 4. 
    Passage: The importance of a decline in productivity growth of both labor and capital derives from the fact that they are practically the only sources of growth in a country’s material well-being. Without growth in productivity, money income may increase but real income will not. The growth of labor productivity is critically dependent on technology, and the same is true for capital productivity. At least conceptually, the only time capital productivity can grow is when the efficiency of new capital goods (plant and equipment) grows faster than the prices of these goods, and this can happen only when the economic value of resource-saving technological innovations embodied in new capital goods exceeds the cost of innovations. For 20 years following the Second World War the United States maintained about the same rate of labor productivity growth as the average of the preceding 80 years: 2.4 to 2.5 percent per year. Between 1965 and 1971, however, the growth rate slipped to about one-half of this long term average. From 1965 through 1973, the growth rate averaged 1.7 percent per year, or 30 percent less then the preceding long term average. The decline in the growth of labor productivity was paralleled by a dramatic decline in the growth of capital productivity. Most economists argue that the decline is strictly cyclical. They assert that the long-term rate will resume once the growth in total output resumes its “normal” path. The slowdown, however, contains a substantial long-term element, one that is not automatically reversible. The most persuasive prima facie observation favouring such irreversibility is the fact that no previous slowdown in the growth of labour productivity in United States history has been greater than 20 percent of the long-term average. Further, the United States gained economic pre-eminence around 1950 largely because its labour productivity growth in the preceding 80 years was 0.09 percent higher than the average- a broad continuation of essentially the same rate between 1950 and 1965, however, produced a decline in the position of the United States in relation to other countries because the other countries more than tripled their rates of productivity growth. These trends have tremendous implications for the country’s future growth its relative economic and political position in the world, and its reaction to future inflationary pressures. The decline in capital productivity implies that the growing shortages of investable funds and the continuing rise in interest rates are not short-term phenomena. Rather, they are the result of long-term forces at work in the economy, the principal one of which is the decline in technological advance relative to both past performance in the United States and current performance in other countries. The only way to reverse these trends is to reverse the decline in the rate of technological advance. Question: Which of the following does the author mention as evidence that the decline in the growth of labour and capital productivity is not cyclical?
    • A. 

      The growth of labour productivity in the United States between 1865 and 1945 was greater than that in European countries

    • B. 

      Recent inflationary pressures have made prediction of future economic trends impossible

    • C. 

      The technological advances of foreign countries prevent the resumption of previous economic trends in the United States

    • D. 

      The slowdown in the growth of productivity since 1965 is much greater than any previous slowdown in productivity growth

  • 5. 
    Passage: The importance of a decline in productivity growth of both labor and capital derives from the fact that they are practically the only sources of growth in a country’s material well-being. Without growth in productivity, money income may increase but real income will not. The growth of labor productivity is critically dependent on technology, and the same is true for capital productivity. At least conceptually, the only time capital productivity can grow is when the efficiency of new capital goods (plant and equipment) grows faster than the prices of these goods, and this can happen only when the economic value of resource-saving technological innovations embodied in new capital goods exceeds the cost of innovations. For 20 years following the Second World War the United States maintained about the same rate of labor productivity growth as the average of the preceding 80 years: 2.4 to 2.5 percent per year. Between 1965 and 1971, however, the growth rate slipped to about one-half of this long term average. From 1965 through 1973, the growth rate averaged 1.7 percent per year, or 30 percent less then the preceding long term average. The decline in the growth of labor productivity was paralleled by a dramatic decline in the growth of capital productivity. Most economists argue that the decline is strictly cyclical. They assert that the long-term rate will resume once the growth in total output resumes its “normal” path. The slowdown, however, contains a substantial long-term element, one that is not automatically reversible. The most persuasive prima facie observation favouring such irreversibility is the fact that no previous slowdown in the growth of labour productivity in United States history has been greater than 20 percent of the long-term average. Further, the United States gained economic pre-eminence around 1950 largely because its labour productivity growth in the preceding 80 years was 0.09 percent higher than the average- a broad continuation of essentially the same rate between 1950 and 1965, however, produced a decline in the position of the United States in relation to other countries because the other countries more than tripled their rates of productivity growth. These trends have tremendous implications for the country’s future growth its relative economic and political position in the world, and its reaction to future inflationary pressures. The decline in capital productivity implies that the growing shortages of investable funds and the continuing rise in interest rates are not short-term phenomena. Rather, they are the result of long-term forces at work in the economy, the principal one of which is the decline in technological advance relative to both past performance in the United States and current performance in other countries. The only way to reverse these trends is to reverse the decline in the rate of technological advance. Question: In developing his argument the author relies on all of the following EXCEPT
    • A. 

      Experimental evidence

    • B. 

      Logical inferences

    • C. 

      Statistical data

    • D. 

      Economic theory

  • 6. 
    Passage: The importance of a decline in productivity growth of both labor and capital derives from the fact that they are practically the only sources of growth in a country’s material well-being. Without growth in productivity, money income may increase but real income will not. The growth of labor productivity is critically dependent on technology, and the same is true for capital productivity. At least conceptually, the only time capital productivity can grow is when the efficiency of new capital goods (plant and equipment) grows faster than the prices of these goods, and this can happen only when the economic value of resource-saving technological innovations embodied in new capital goods exceeds the cost of innovations. For 20 years following the Second World War the United States maintained about the same rate of labor productivity growth as the average of the preceding 80 years: 2.4 to 2.5 percent per year. Between 1965 and 1971, however, the growth rate slipped to about one-half of this long term average. From 1965 through 1973, the growth rate averaged 1.7 percent per year, or 30 percent less then the preceding long term average. The decline in the growth of labor productivity was paralleled by a dramatic decline in the growth of capital productivity. Most economists argue that the decline is strictly cyclical. They assert that the long-term rate will resume once the growth in total output resumes its “normal” path. The slowdown, however, contains a substantial long-term element, one that is not automatically reversible. The most persuasive prima facie observation favouring such irreversibility is the fact that no previous slowdown in the growth of labour productivity in United States history has been greater than 20 percent of the long-term average. Further, the United States gained economic pre-eminence around 1950 largely because its labour productivity growth in the preceding 80 years was 0.09 percent higher than the average- a broad continuation of essentially the same rate between 1950 and 1965, however, produced a decline in the position of the United States in relation to other countries because the other countries more than tripled their rates of productivity growth. These trends have tremendous implications for the country’s future growth its relative economic and political position in the world, and its reaction to future inflationary pressures. The decline in capital productivity implies that the growing shortages of investable funds and the continuing rise in interest rates are not short-term phenomena. Rather, they are the result of long-term forces at work in the economy, the principal one of which is the decline in technological advance relative to both past performance in the United States and current performance in other countries. The only way to reverse these trends is to reverse the decline in the rate of technological advance. Question: Which of the following best states the author’s opinion of the future of labour and capital productivity growth in the United States?
    • A. 

      They will remain competitive with current trends in productivity in European countries

    • B. 

      They will eventually return to the same growth rate that existed in the United States between 1865 and 1945

    • C. 

      They will continue to increase as long as sufficient natural resources are available for manufacturing

    • D. 

      They will continue to decline until the rate of technological advance in the Unites States begins to increase

  • 7. 
    Passage: The importance of a decline in productivity growth of both labor and capital derives from the fact that they are practically the only sources of growth in a country’s material well-being. Without growth in productivity, money income may increase but real income will not. The growth of labor productivity is critically dependent on technology, and the same is true for capital productivity. At least conceptually, the only time capital productivity can grow is when the efficiency of new capital goods (plant and equipment) grows faster than the prices of these goods, and this can happen only when the economic value of resource-saving technological innovations embodied in new capital goods exceeds the cost of innovations. For 20 years following the Second World War the United States maintained about the same rate of labor productivity growth as the average of the preceding 80 years: 2.4 to 2.5 percent per year. Between 1965 and 1971, however, the growth rate slipped to about one-half of this long term average. From 1965 through 1973, the growth rate averaged 1.7 percent per year, or 30 percent less then the preceding long term average. The decline in the growth of labor productivity was paralleled by a dramatic decline in the growth of capital productivity. Most economists argue that the decline is strictly cyclical. They assert that the long-term rate will resume once the growth in total output resumes its “normal” path. The slowdown, however, contains a substantial long-term element, one that is not automatically reversible. The most persuasive prima facie observation favouring such irreversibility is the fact that no previous slowdown in the growth of labour productivity in United States history has been greater than 20 percent of the long-term average. Further, the United States gained economic pre-eminence around 1950 largely because its labour productivity growth in the preceding 80 years was 0.09 percent higher than the average- a broad continuation of essentially the same rate between 1950 and 1965, however, produced a decline in the position of the United States in relation to other countries because the other countries more than tripled their rates of productivity growth. These trends have tremendous implications for the country’s future growth its relative economic and political position in the world, and its reaction to future inflationary pressures. The decline in capital productivity implies that the growing shortages of investable funds and the continuing rise in interest rates are not short-term phenomena. Rather, they are the result of long-term forces at work in the economy, the principal one of which is the decline in technological advance relative to both past performance in the United States and current performance in other countries. The only way to reverse these trends is to reverse the decline in the rate of technological advance. Question: It can be inferred that between 1950 and 1965 the relative economic position of the United States with respect to European countries declined even though
    • A. 

      There was no change in the growth rate of labour productivity in European countries

    • B. 

      There was no change in the growth rate of labour productivity in the Unites States

    • C. 

      The rate of growth of labour productivity in the Unites States changed substantially

    • D. 

      Relative capital requirements continued to rise

  • 8. 
    Passage: The importance of a decline in productivity growth of both labor and capital derives from the fact that they are practically the only sources of growth in a country’s material well-being. Without growth in productivity, money income may increase but real income will not. The growth of labor productivity is critically dependent on technology, and the same is true for capital productivity. At least conceptually, the only time capital productivity can grow is when the efficiency of new capital goods (plant and equipment) grows faster than the prices of these goods, and this can happen only when the economic value of resource-saving technological innovations embodied in new capital goods exceeds the cost of innovations. For 20 years following the Second World War the United States maintained about the same rate of labor productivity growth as the average of the preceding 80 years: 2.4 to 2.5 percent per year. Between 1965 and 1971, however, the growth rate slipped to about one-half of this long term average. From 1965 through 1973, the growth rate averaged 1.7 percent per year, or 30 percent less then the preceding long term average. The decline in the growth of labor productivity was paralleled by a dramatic decline in the growth of capital productivity. Most economists argue that the decline is strictly cyclical. They assert that the long-term rate will resume once the growth in total output resumes its “normal” path. The slowdown, however, contains a substantial long-term element, one that is not automatically reversible. The most persuasive prima facie observation favouring such irreversibility is the fact that no previous slowdown in the growth of labour productivity in United States history has been greater than 20 percent of the long-term average. Further, the United States gained economic pre-eminence around 1950 largely because its labour productivity growth in the preceding 80 years was 0.09 percent higher than the average- a broad continuation of essentially the same rate between 1950 and 1965, however, produced a decline in the position of the United States in relation to other countries because the other countries more than tripled their rates of productivity growth. These trends have tremendous implications for the country’s future growth its relative economic and political position in the world, and its reaction to future inflationary pressures. The decline in capital productivity implies that the growing shortages of investable funds and the continuing rise in interest rates are not short-term phenomena. Rather, they are the result of long-term forces at work in the economy, the principal one of which is the decline in technological advance relative to both past performance in the United States and current performance in other countries. The only way to reverse these trends is to reverse the decline in the rate of technological advance. Question: Which of the following best describes the author’s approach to his topic
    • A. 

      He describes a theory and explains how it was derived

    • B. 

      He presents a problem and discusses possible solutions for it

    • C. 

      He provides facts from which readers can draw their own conclusions

    • D. 

      He describes current trends and explains why he deplores them

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