Question 1

The purpose of the growth accounting formula is to

Accepted Answer

A) explain why economies stop growing. 
B) determine the role of government in affecting growth. 
C) measure the rate at which GDP grows. 
D) identify the limits to growth. 
E) determine how much productivity growth is due to changes in the capital stock and how much is due to changes in technology. 
A) explain why economies stop growing. 
B) determine the role of government in affecting growth. 
C) measure the rate at which GDP grows. 
D) identify the limits to growth. 
E) determine how much productivity growth is due to changes in the capital stock and how much is due to changes in technology.

Question 2

The growth accounting formula is useful for determining the sources of productivity growth.

Accepted Answer

The answer of The growth accounting formula is useful for...

Question 3

The coefficient on capital growth is really not known with precision. According to the text, what is the range of possible values for this coefficient? If the coefficient is not known with precision, then why is the growth-accounting formula useful for policymakers?

Accepted Answer

According to the text, the coefficient o

Question 4

When capital is included in the production function,

Accepted Answer

A) less output is produced with the same amount of labor. 
B) more output is produced with the same amount of labor. 
C) diminishing returns to labor are eliminated. 
D) the production function exhibits increasing returns to labor. 
E) the production function exhibits constant returns to labor. 
A) less output is produced with the same amount of labor. 
B) more output is produced with the same amount of labor. 
C) diminishing returns to labor are eliminated. 
D) the production function exhibits increasing returns to labor. 
E) the production function exhibits constant returns to labor.

Question 5

Approximately one-third of aggregate income is used to compensate the owners of capital.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true about the production function Y =F(L,K)?

Accepted Answer

A) Output increases only when both labor and capital increase. 
B) An increase in labor causes output to increase but an increase in capital will not cause output to increase unless it is accompanied by an increase in labor. 
C) An increase in capital causes output to increase but an increase in labor will not cause output to increase unless it is accompanied by an increase in capital. 
D) An increase in capital causes an increase in capital. 
E) It is possible for output to increase if capital increases, even if there is no change in the labor input. 
A) Output increases only when both labor and capital increase. 
B) An increase in labor causes output to increase but an increase in capital will not cause output to increase unless it is accompanied by an increase in labor. 
C) An increase in capital causes output to increase but an increase in labor will not cause output to increase unless it is accompanied by an increase in capital. 
D) An increase in capital causes an increase in capital. 
E) It is possible for output to increase if capital increases, even if there is no change in the labor input.

Question 7

Human capital is an input into technology production.

Accepted Answer

A) True 
 B)False

Question 8

Because technology exhibits nonrivalry and nonexcludability, there will likely be

Accepted Answer

A) learning by doing. 
B) an underproduction of technology. 
C) specialization. 
D) an overproduction of technology. 
E) human capital development. 
A) learning by doing. 
B) an underproduction of technology. 
C) specialization. 
D) an overproduction of technology. 
E) human capital development.

Question 9

Which of the following statements best explains why the productivity function might shift up?

Accepted Answer

A) The capital stock has increased by a greater percentage than the labor force. 
B) There has been an increase in productivity. 
C) There has been an increase in the capital stock. 
D) There has been a decline in the labor force. 
E) There has been a technological improvement. 
A) The capital stock has increased by a greater percentage than the labor force. 
B) There has been an increase in productivity. 
C) There has been an increase in the capital stock. 
D) There has been a decline in the labor force. 
E) There has been a technological improvement.

Question 10

The growth rate of a variable is measured by

Accepted Answer

A) the amount the variable changes. 
B) the change in the variable divided by the variable's new level. 
C) the variable's new level divided by its initial level. 
D) the change in the variable divided by the variable's initial level. 
E) the variable's initial level divided by its new level. 
A) the amount the variable changes. 
B) the change in the variable divided by the variable's new level. 
C) the variable's new level divided by its initial level. 
D) the change in the variable divided by the variable's initial level. 
E) the variable's initial level divided by its new level.

Question 11

When wages increase, there are likely to be more labor-saving technological changes.

Accepted Answer

A) True 
 B)False

Question 12

A theory without capital or technology

Accepted Answer

A) is of limited use because there have always been capital and technology. 
B) is useful for illustrating production and economic conditions in the time before the Industrial Revolution. 
C) None of these 
D) is useful for illustrating the importance of population growth in improving the standard of living. 
E) is capable of explaining productivity growth. 
A) is of limited use because there have always been capital and technology. 
B) is useful for illustrating production and economic conditions in the time before the Industrial Revolution. 
C) None of these 
D) is useful for illustrating the importance of population growth in improving the standard of living. 
E) is capable of explaining productivity growth.

Question 13

The late 1700s and early 1800s represent a period in which productivity grew significantly, and they are thus known by historians as the Industrial Revolution.

Accepted Answer

A) True 
 B)False

Question 14

Technology can best be thought of as

Accepted Answer

A) any type of capital equipment. 
B) recipes that show how to combine inputs. 
C) scientific process. 
D) what inventors produce. 
E) physical equipment. 
A) any type of capital equipment. 
B) recipes that show how to combine inputs. 
C) scientific process. 
D) what inventors produce. 
E) physical equipment.

Question 15

Disembodied technological change pertains to technological development not associated with new capital equipment.

Accepted Answer

A) True 
 B)False

Question 16

Why is learning by doing a type of technical progress?

Accepted Answer

As some tasks are repeated, pr

Question 17

According to economist Daron Acemoglu, well-functioning institutions are a fundamental cause of economic growth.

Accepted Answer

A) True 
 B)False

Question 18

The productivity curve shifts upward as a result of

Accepted Answer

A) less technology. 
B) more technology. 
C) less capital. 
D) more capital. 
E) a higher population. 
A) less technology. 
B) more technology. 
C) less capital. 
D) more capital. 
E) a higher population.

Question 19

The government should formulate a technology policy because

Accepted Answer

A) private incentives for technology production may outweigh the social benefits of such production. 
B) research on technology can be kept secret. 
C) the technology being produced is highly excludable. 
D) the incentives are too low without government intervention. 
E) the incentives to produce the technology are too high. 
A) private incentives for technology production may outweigh the social benefits of such production. 
B) research on technology can be kept secret. 
C) the technology being produced is highly excludable. 
D) the incentives are too low without government intervention. 
E) the incentives to produce the technology are too high.

Question 20

Some economists believe that productivity growth is important, but practically all are in agreement as to how this can be achieved.

Accepted Answer

A) True 
 B)False

Exam 21: Productivity and Economic Growth

The purpose of the growth accounting formula is to

The growth accounting formula is useful for determining the sources of productivity growth.

The coefficient on capital growth is really not known with precision. According to the text, what is the range of possible values for this coefficient? If the coefficient is not known with precision, then why is the growth-accounting formula useful for policymakers?

When capital is included in the production function,

Approximately one-third of aggregate income is used to compensate the owners of capital.

Which of the following statements is true about the production function Y =F(L,K)?

Human capital is an input into technology production.

Because technology exhibits nonrivalry and nonexcludability, there will likely be

Which of the following statements best explains why the productivity function might shift up?

The growth rate of a variable is measured by

When wages increase, there are likely to be more labor-saving technological changes.

A theory without capital or technology

The late 1700s and early 1800s represent a period in which productivity grew significantly, and they are thus known by historians as the Industrial Revolution.

Technology can best be thought of as

Disembodied technological change pertains to technological development not associated with new capital equipment.

Why is learning by doing a type of technical progress?

According to economist Daron Acemoglu, well-functioning institutions are a fundamental cause of economic growth.

The productivity curve shifts upward as a result of

The government should formulate a technology policy because

Some economists believe that productivity growth is important, but practically all are in agreement as to how this can be achieved.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

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