Question 1

Developed countries that direct their investment towards physical capital rather than research and development can expect to

Accepted Answer

A) have a higher level of output in the short run and a higher long-run growth rate 
B) have a lower level of output in the short run and lower long-run growth rate 
C) have a lower level of output in the short run but a higher long-run growth rate 
D) have a higher level of output in the short run but a lower long-run growth rate 
E) achieve A but only if the level of investment exceeds 1/3 of GDP 
A) have a higher level of output in the short run and a higher long-run growth rate 
B) have a lower level of output in the short run and lower long-run growth rate 
C) have a lower level of output in the short run but a higher long-run growth rate 
D) have a higher level of output in the short run but a lower long-run growth rate 
E) achieve A but only if the level of investment exceeds 1/3 of GDP

Question 2

The "Asian Tigers" achieved high economic growth from 1966 to 1990 in part because they

Accepted Answer

A) had very high savings rates 
B) successfully controlled their population growth 
C) devoted many resources to education 
D) both B and C 
E) both A and C 
A) had very high savings rates 
B) successfully controlled their population growth 
C) devoted many resources to education 
D) both B and C 
E) both A and C

Question 3

The neoclassical growth model predicts absolute convergence for countries with the

Accepted Answer

A) same technology, savings rate, and population growth 
B) same technology and savings rate, but different rates of population growth 
C) same technology and population growth, but different savings rates 
D) same population growth and savings rate, but different levels of technology 
E) same population growth, but different levels of technology or savings rates 
A) same technology, savings rate, and population growth 
B) same technology and savings rate, but different rates of population growth 
C) same technology and population growth, but different savings rates 
D) same population growth and savings rate, but different levels of technology 
E) same population growth, but different levels of technology or savings rates

Question 4

Assume an endogenous growth model with labor augmenting technology.The production function is Y = F(K,AN), with A = 2(K/N) such that y = 2k.If the savings rate is s = 0.08, the rate of population growth is n = 0.03, and the rate of depreciation is d = 0.04, what is the growth rate of output per capita?

Accepted Answer

A) 1% 
B) 3% 
C) 4% 
D) 7% 
E) 9% 
A) 1% 
B) 3% 
C) 4% 
D) 7% 
E) 9%

Question 5

The assumption of constant returns to capital alone implies that larger firms should be more efficient than smaller firms.The reason this doesn't necessarily imply a tendency toward monopolization is that

Accepted Answer

A) most industries are perfectly competitive in nature 
B) firms have more inputs than just capital 
C) constant returns to capital alone still implies decreasing returns to all factors of production taken together 
D) if one firms increases its use of capital, other firms can also capture some of the production benefits of the new capital through spillover effects 
E) none of the above 
A) most industries are perfectly competitive in nature 
B) firms have more inputs than just capital 
C) constant returns to capital alone still implies decreasing returns to all factors of production taken together 
D) if one firms increases its use of capital, other firms can also capture some of the production benefits of the new capital through spillover effects 
E) none of the above

Question 6

In a growth model with endogenous population growth and an investment requirement that rises slowly at first then rises sharply and eventually flattens out, we can get

Accepted Answer

A) three steady-state equilibria, only one of which is stable 
B) three steady-state equilibria, only two of which are stable 
C) three steady-state equilibria, all of which are stable 
D) one stable steady-state equilibrium, but only if the savings rate is high enough 
E) both B and D are possible 
A) three steady-state equilibria, only one of which is stable 
B) three steady-state equilibria, only two of which are stable 
C) three steady-state equilibria, all of which are stable 
D) one stable steady-state equilibrium, but only if the savings rate is high enough 
E) both B and D are possible

Question 7

Which of the following countries had the HIGHEST average annual growth rate of GDP per capita between 1988 and 2010?

Accepted Answer

A) China 
B) India 
C) Mexico 
D) South Korea 
E) United States 
A) China 
B) India 
C) Mexico 
D) South Korea 
E) United States

Question 8

Assume a production function with only two inputs, capital and labor.In this case, the concept of a diminishing marginal product of capital implies that

Accepted Answer

A) as less capital is being used, more and more labor has to be employed to increase output 
B) as both labor and capital inputs are increased, output increases but at a decreasing rate 
C) as the amount of capital is increased and the amount of labor remains fixed, output increases but at a decreasing rate 
D) as the amount of capital increases and the amount of labor remains fixed, output cannot increase 
E) labor inputs have a bigger impact on increasing output than capital inputs 
A) as less capital is being used, more and more labor has to be employed to increase output 
B) as both labor and capital inputs are increased, output increases but at a decreasing rate 
C) as the amount of capital is increased and the amount of labor remains fixed, output increases but at a decreasing rate 
D) as the amount of capital increases and the amount of labor remains fixed, output cannot increase 
E) labor inputs have a bigger impact on increasing output than capital inputs

Question 9

The notion of conditional convergence states that two countries that have the same population growth and access to the same level of technology will reach a steady-state equilibrium at

Accepted Answer

A) different levels of output but the same growth rate, if their savings rates are different 
B) different levels of output and different economic growth rates if their savings rates are different 
C) the same level of output and the same economic growth rate, even if their savings rates are different 
D) the same level of output but different economic growth rates if their savings rates are different 
E) the same level of output and the same economic growth rate if their savings rates are the same but their rates of depreciation differ 
A) different levels of output but the same growth rate, if their savings rates are different 
B) different levels of output and different economic growth rates if their savings rates are different 
C) the same level of output and the same economic growth rate, even if their savings rates are different 
D) the same level of output but different economic growth rates if their savings rates are different 
E) the same level of output and the same economic growth rate if their savings rates are the same but their rates of depreciation differ

Question 10

If two countries have the same share of investment to GDP, the one that experiences a faster growth rate is most likely the one that

Accepted Answer

A) emphasizes free market policies and encourages foreign trade 
B) protects domestic industry from foreign competition with trade barriers 
C) invests less in government infrastructure 
D) has a higher share of government spending to GDP 
E) has more government regulations and spends more funds to protect the environment 
A) emphasizes free market policies and encourages foreign trade 
B) protects domestic industry from foreign competition with trade barriers 
C) invests less in government infrastructure 
D) has a higher share of government spending to GDP 
E) has more government regulations and spends more funds to protect the environment

Developed countries that direct their investment towards physical capital rather than research and development can expect to

The "Asian Tigers" achieved high economic growth from 1966 to 1990 in part because they

The neoclassical growth model predicts absolute convergence for countries with the

The assumption of constant returns to capital alone implies that larger firms should be more efficient than smaller firms.The reason this doesn't necessarily imply a tendency toward monopolization is that

In a growth model with endogenous population growth and an investment requirement that rises slowly at first then rises sharply and eventually flattens out, we can get

Which of the following countries had the HIGHEST average annual growth rate of GDP per capita between 1988 and 2010?

Assume a production function with only two inputs, capital and labor.In this case, the concept of a diminishing marginal product of capital implies that

The notion of conditional convergence states that two countries that have the same population growth and access to the same level of technology will reach a steady-state equilibrium at

If two countries have the same share of investment to GDP, the one that experiences a faster growth rate is most likely the one that

Introduction

National income accounting

Growth and accumulation

Aggregate supply and demand

Aggregate supply and the phillips curve

Unemployment

Inflation

Policy preview

Income and spending

Money, interest, and income

Monetary and fiscal policy

International linkages

Consumption and saving

Investment spending

The demand for money

The fed, money, and credit

Policy

Financial markets and asset prices

The national debt

Recession and depression

Inflation and hyperinflation

International adjustment and interdependence

Advanced topics

Filters

Exam 4: Growth and policy

Developed countries that direct their investment towards physical capital rather than research and development can expect to

The "Asian Tigers" achieved high economic growth from 1966 to 1990 in part because they

The neoclassical growth model predicts absolute convergence for countries with the

The assumption of constant returns to capital alone implies that larger firms should be more efficient than smaller firms.The reason this doesn't necessarily imply a tendency toward monopolization is that

In a growth model with endogenous population growth and an investment requirement that rises slowly at first then rises sharply and eventually flattens out, we can get

Which of the following countries had the HIGHEST average annual growth rate of GDP per capita between 1988 and 2010?

Assume a production function with only two inputs, capital and labor.In this case, the concept of a diminishing marginal product of capital implies that

The notion of conditional convergence states that two countries that have the same population growth and access to the same level of technology will reach a steady-state equilibrium at

If two countries have the same share of investment to GDP, the one that experiences a faster growth rate is most likely the one that

Introduction

National income accounting

Growth and accumulation

Aggregate supply and demand

Aggregate supply and the phillips curve

Unemployment

Inflation

Policy preview

Income and spending

Money, interest, and income

Monetary and fiscal policy

International linkages

Consumption and saving

Investment spending

The demand for money

The fed, money, and credit

Policy

Financial markets and asset prices

The national debt

Recession and depression

Inflation and hyperinflation

International adjustment and interdependence

Advanced topics

Filters